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