| It seems a little odd to compare stocks to mutual | | | | money in the morning if you are short on cash, and |
| funds. Actually, mutual funds are largely composed of | | | | by the time the market closes you may have a |
| stocks. It is important to make the distinction | | | | check waiting for you. Stocks, on the other hand, are |
| between the two as there are some very real | | | | much more difficult. It all depends upon what you |
| advantages to using mutual funds. | | | | have invested in. CDs are not at all liquid and bonds |
| It is fun to invest in individual stocks because each | | | | are difficult as well. |
| company has its own story to tell. However, you | | | | If you are new to investing then mutual funds may |
| want to focus on making money! Investing is not a | | | | be the way to go. You can invest small increments |
| game and should not be taken lightly. | | | | of money at regular intervals and not have to pay a |
| When you invest in mutual funds, you are able to | | | | trading cost. If you invest in stocks, you will find that |
| diversify and reduce your risk of losing money. Do | | | | they carry high transaction fees. This makes it quite |
| you think that those wealthy investors out there just | | | | difficult for the small investor to realize a profit. |
| put their money in a couple of stocks? No! Either | | | | If you are a wealthy stock investor, then you have it |
| they are investing in mutual funds or are buying large | | | | made because you get preferential treatment from |
| numbers of stocks. | | | | the brokers. Wealthy bank account holders usually |
| When you purchase mutual funds, you are hiring a | | | | get the red carpet treatment from the banks. |
| professional manager at a relatively inexpensive price. | | | | However, mutual funds do not discriminate. Whether |
| It would be a little off the wall to think that you | | | | you only have a paltry $50 or a huge sum of |
| have more knowledge than a mutual fund manager! | | | | $500,000, you all get the same manager, the same |
| Most managers have been around the track a | | | | investment and the same account access. |
| number of times and have the academic credentials | | | | Generally speaking, mutual funds have a much lower |
| to back up their knowledge. | | | | risk than stocks. This is largely to diversification which |
| Mutual fund companies have the advantage of | | | | was mentioned earlier. With stocks, there is always |
| capitalizing on economies of scale because they pool | | | | the worry that the company you are investing in will |
| investors' monies together. Since these companies | | | | go belly up! With mutual funds, that is next to |
| have large amounts of money to invest, they usually | | | | impossible. |
| have personal contacts at many brokerage firms and | | | | As you can see, there are many advantages in |
| often trade commission-free. | | | | investing in mutual funds over stocks. It is not to be |
| Mutual funds are easy to take care of. The | | | | said that you should never invest in stocks, but if |
| bookkeeper is much more challenged when there are | | | | you are just getting your feet wet with investing it |
| hundreds of stocks to keep track of! | | | | would be best to go with mutual funds! |
| Mutual funds are very liquid. Put in your order for | | | | |