So, I guess you are looking to invest your money but are confused between the two share market and mutual funds .
No problem after reading this you will be able to get the exact difference between both of them and also which is best for you.
What is Share or Stock market
Simple Meaning : Companies list their names on their respected country stock exchange list so that they are able to raise money through large number of investores by giving their companies some share in exchange of per ser price.
Like if market price of x company = 20 $ and if you invest 100 $ you will get 5 shares of that company.
Which you can easily sell when you think is right time or when share price rise .
What is Mutual Fund
These are also companies like normal companies but they generally deals with the investments.
So what does mutual funds do is that according to the type of mutual fund they invest your money in variety of different sectors.
You have to just choose which mutual funds is suitable to you.
Choosing a mutual fund can depend upon variety of factors.
Difference between Mutual funds and Stocks
According to some of the successful investors you must invest in both of them.
Means you must own some shares and some sips in mutual funds.
When asked they said ‘ This is your hard earned money you can’t afford to lose it but also you must multiply it ‘.
Lets see the difference
Mutual Funds :
- They are simple and easy to handle and manage.
- They are best for long term.
- Money is safe and good returns are guaranteed in most of the case.
- No need to see status regularly.
- You cannot trade in them.
Share Market :
- They required proper understanding and knowledge.
- They are for both long term and short term.
- Goods return is only possible on the basis of your stock selection.
- Regular Status must be tracked.
- You can trade in them.
|Share Market||Mutual Funds|
|Invest in Single Company||Multiple companies / Sectors|
|You can Trade||You cannot Trade|
|For Long Term and Short Term||For Long Term|
|Returns are Not Fixed||Most of the time Fixed Return|
|Proper Knowledge Required||Simple Knowledge Required|