Confused about whether you should be investing in stocks or mutual funds? Read
whether individual stocks or mutual funds are the better investment. Depending on your risk tolerance, you may want to build a portfolio of equities, mutual funds, or both
||Usually purchased in a round lot, or 100 shares of stock.
||Usually investors purchase fund at its minimum initial investment level, which can range from $250 to $10,000.
||You can control when to realize capital gains or losses, depending on when you decide to sell.
||Investors can’t control timing of capital gains distributions or taxes on those distributions.
||Run by professional money manager.
||No additional costs after purchase.
||Funds can be either load-which requires a payment of an up-front fee-or no-load. Operational expenses, including marketing and management fees, range from 0.1% to 4.5%.
||Risk is concentrated to the number of individual stocks held in your portfolio.
||Diversification reduces risk.
||Possibility of huge annual returns. In recent market, more than 300 stocks have had returns of 200% or more.
||In many cases, consistent returns. Only one fund has had a return of 200% or more.