Stock And Profit Investments ? The Better Choice: Mutual Funds or ...

Article by Trevor Price

The Better Choice: Mutual Funds or Individual Stocks? ? Investment ? Stocks and Bonds

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While comparing stocks and mutual funds may seem odd at first, this exercise is key to learning their differences. Understanding the pros and cons of both stocks and mutual funds enables you to make better, more prudent financial decisions.Mutual FundsWhen you get the itch to start investing in the stock market, mutual funds are a great place to begin. Fees for buying, selling, and transferring mutual funds are frequently less than for stocks. Additionally, mutual funds are also easier to invest in small steps ? some can be purchased on a routine basis for as little as $ 100 per month. Mutual funds are long term stocks, that grown over time. Instead of being tied to the growth on just one specific stock, mutual funds are linked to many different stocks.Moreover, mutual funds are less risky than the average stocks. Instead of concentrating all funds in one sector or company, your investments are spread out over many sectors and companies. Diversifying investments is key to preventing loss of profits and maximizing your gains over the years. Therefore, for example, the losses of one stock can be mitigated by the rise in others that make up part of the mutual fund. Moreover since many investors contribute to a mutual fund, the loss is felt less by the individual investor. Shared Wealth and RiskSince mutual funds are funded my many people there is a strong sense of community, commonality, and shared risk among investors. Mutual funds also allow investors to spread the risk much better than when simply buying stocks. The mutual fund?s ?fund manager? will be on diligent lookout for profitability opportunities. When investing in stock the only person looking out for profits are the investors themselves. So a fund manager provides another level of protection for the investor?s money.Ease of UseMutual Funds are easier to buy, sell and trade when compared to the average stock. Most mutual funds can be purchased at banks, online, or through many companies? 401 (K) plans. Mutual funds are more easy to access than standard stocks.The bottom line when making a personal decision between buying stocks or mutual funds is to select whichever is better for your financial situation. As with any investment, it is vitally important to research your prospective mutual funds before investing. Doing proper research will insure the best growth potential and reduce the chance of losses.Given the many differences between stocks and mutual funds, investors may indeed find mutual funds to be the best choice. They offer more protection against fluctuation in the market, which is good as the market undergoes massive shifts. Mutual funds, on the whole, are less risky and provide a good growth potential.

About the Author

Trevor has been writing on a wide range of topics for several years. Not only does this author specialize in the stock market, but you can also check out his latest Elizabeth Arden makeup review website which reviews great makeup options at www.elizabethardenmakeupreview.com for your facial beauty needs.

Use and distribution of this article is subject to our Publisher Guidelines
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Trevor Price

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Trevor has been writing on a wide range of topics for several years. Not only does this author specialize in the stock market, but you can also check out his latest Elizabeth Arden makeup review website which reviews great makeup options at www.elizabethardenmakeupreview.com for your facial beauty needs.

Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author?s information and copyright must be included.

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