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Which Is Better: Stocks or Mutual Funds?

Which Is Better: Stocks or Mutual Funds?

I receive a lot of queries about this questions, especially from the newbies. While both are advisable vehicles of investments, choosing which one to invest can be challenging. To help you decide which one suits you, let me show some comparisons between the two.

mutual-funds-or-stocks

Mutual fund is the most basic investment anyone can get. It requires:

LESS MONEY (Php 5K initial investment)
LESS KNOWLEDGE (the fund manager will do the investing, just invest money)
LESS RISK (compare to stocks as the fund manager knows investing very well)
LESS ATTENTION (just invest and forget)

As for stocks, this is a higher investment grade than mutual funds. It requires:

LESS MONEY (Php 5K initial investment)
MORE KNOWLEDGE (you need to choose which stocks to buy)
MORE RISK (since you are a newbie, more prone to risk)
MORE ATTENTION (you need to monitor your stocks progress and you need to buy and sell your own stocks)

 

Both comes with a risk. However, risk can be minimize by knowing what you are doing. Learn first before investing. Knowledge is the best protection you can have in managing your money. You cannot just rely on someone for the information. While this is a good option, you must take charge for whatever decision you made, without blaming anyone for it.

In terms of growth, mutual fund in the past 3 years have more than 30% growth. If you will do stocks, it could be higher than that. Check my previous post on how my wife invest in stocks and her current gains. Click Here.

Remember, the higher the risk, the higher the gains you can get. Take note, there is no guarantee both will perform well. You can only refer to their previous performances for additional information.

For detailed information about mutual funds, read my previous article here.

P.S. A year ago, I do not know anything about investment. Then I joined Truly Rich Club by Bo Sanchez. It was the best decision I ever made in my life. Brother Bo is a spiritual preacher and at the same time, financial literacy advocate whose purpose is to help people become rich in order to serve the LORD with the money that they have. He guided me along the way, explaining how I can manage my money and make it work hard for me. Now I’m investing in stocks and mutual funds and have a clear path for my future. Soon I’ll open UITF account as well. All are made possible by his guidance and teachings on every steps to become an investor. Being OFW isn’t forever, this is my EXIT PLAN. It’s amazing how his teachings change my life. I’m inviting you to join the club too, JOIN TRULY RICH CLUB. If you have any question, feel free to leave your comment below. CLICK HERE TO JOIN

About Richard Macalintal

Hi my name is Richard. I am a Registered Financial Services Consultant in Singapore. If you have any queries or you need help on your insurance policies and investment linked products, feel free to message me :-) We can have a cup of coffee while I do financial review and give advice with regards to your finances :-) Contact me thru email rlmacalintal(at)yahoo.com or SMS me +65 82235186. Disclosure: I am a Financial Consultant of AIA. The statements or opinions expressed on this site are my own and do not necessarily represent those of AIA.

5 comments

  1. Yeah, it’s really hard to compare the two. They’re similar, but actually two different things.

    And personally, they can complement each other. I have an equity UITF (same as mutual fund) and I’m more ready to invest in stocks, because I’m already diversified.

  2. Hi Ricahrd,

    btw, I had something to ask you. Could you email me at personalfinanceapprentice@gmail.com?Thanks!

  3. Hi!

    I’m interested in stocks but I don’t have time to attend seminars. Are you a broker?

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