Stocks Or Mutual Funds – The Debate Lives On

By Author: Vamsi Krishna
Total Articles: 27
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So you’re watching the Indian share market live on television and the urge to invest grab holds of you. How do you go about doing it? Do you take a plunge directly into stocks or indirectly through mutual funds? The Indian share market today is a volatile place, and the wrong decision may be costly. Here’s what you need to know about stocks and mutual funds.

A mutual fund is generally the best bet for the lay investor. You don’t have to ponder about what shares to buy today, keeping a constant watch on online share prices. A professional fund manager could be in a much better position to buy and sell stocks than you will ever be. Another advantage of a mutual fund is that for the same price, you can get a basket of shares instead of putting all your investing eggs in one high-priced stock, and spread your risk.

However, there are some detractors as far as mutual funds are concerned. Robert T. Kiyosaki of Rich Dad, Poor Dad fame, is a strong opponent of mutual funds, and once claimed that they were for `losers’. But that may be an extreme view.

Certainly, there are advantages ...
... in investing in stocks. But remember that this is for those who are seriously interested in stocks, keeping a constant watch on the happenings in the Indian share market live and so on. The Indian share market today is quite volatile, and certainly there are risks in going it on your own.

But if you are able to find good shares to buy today, go ahead and do it. One major advantage of investing on your own is that you don’t have to pay fees to the mutual fund. The diversification that reduces the risk of mutual funds also acts as a dampener when times are good, so you’re not able to take advantage of upward movements of an individual stock.

What’s more, investing on your own gives you a sense of control over your money. With a mutual fund, you don’t know exactly where your money is going, and how the money is being managed.

There are pros and cons in investing in mutual funds and directly in stocks. You have to take the approach that suits your style. If you don’t enjoy keeping a constant watch on stocks, go in for a mutual fund. If you’re an avid stock watcher, and can’t take your eyes off online share prices, it’s better you do it on your own.

Author Bio :

Ritish Kumar is a finance enthusiast and a keen observer of the Indian share market. In this series of articles, he talks about investing in stock market and staying profitable. mutual fund