Confused where to invest Mutual funds or Stocks?

23 Aug 2018

Do you know that most of the individuals waste their precious time on wondering whether making an investment is necessary or it's just a matter of choice? Even if they decide to invest, they get stuck in between two options – mutual funds or stocks, which one will be more secure. Yes, we believe it's hard to find the appropriate answer but finding it ASAP is quite essential.

Well, we have figured out your issue and have decided to talk about it for your own sake. Are you interested? Guys, let's see how to save money fast and make a huge profit in the future.

Let us clear this out first that making an investment is not a choice but a need that every individual should make. Now the question is which will be the more fruitful investment tool? And surprisingly, it is always the mutual fund that wins the match between mutual fund vs stocks. It is considered to be the best investment solution with better returns in lieu of minor risks. To be more precise, let's check out the top 4 reasons that make mutual funds more satisfying.

1.Return on Investments (ROI): Have you ever heard anyone making investments without asking about its returns? However, it's the nature of every individual to ask for the earnings or benefits before investing their time or effort. Then why not while making investments on mutual funds or shares? As an investor, you may initially be worried about its volatile phase. But you can't also overlook that it offers higher and better returns than any other traditional investment plan. While investing in shares may give you high returns but the risk associated with shares is more in proportion. Therefore, we guess this is the unique way to save money as well as the safest mode that comes along with high returns

2.Diversification issues: Investing in stock works on a single portfolio. While in mutual funds you are allowed to diversify your funds and invest across a wide variety of stocks. This adds an advantage when one of the stocks faces any risk, you are shielded by the performance of other stocks. Thus it is always recommended not to invest your money in a single mutual fund category. Instead, you should diversify it across different stocks to lessen your risk. So, in this mutual funds vs stocks performance game, mutual funds take the trophy again.

3.Smart Managers: An intensive research on different companies and industries is required before investing in stocks. Do you think, there will be at least one who has both knowledge and time to spend on his own investments? However, mutual fund house offers smart and professional managers along with a team of analysts. They are not only termed as expert advisors whose aim is to guide you to find the right partner or present you with different options based on your risk appetite. They also track and manage all your investments and make improvements when necessary. It is factually not possible to monitor the performance of every stock in the portfolio for every investor and these smart managers do this on your behalf.

4.Cost of Investments: Yet cost of investments is another reason – why the mutual fund has to be the answer for 'how to save money fast on a low income'. A mutual fund do charge an administration fee in the form of an expense ratio, but annually. However, while making investments in stocks you are likely to pay for the stock trading for every single transaction you do. Isn't it enough to conclude that mutual fund is more beneficial investment mode?

Equially Important, we have another primary reason left to discuss.

5.Tax Benefits: Mutual fund can also bless you with tax benefit and savings under Section 80(C) via the Equity Linked Savings Scheme(ELSS). This scheme leverages you with tax savings of up to Rs 1,50,000/- while no such benefits are equipped with stock investments. Apart from this, you may enjoy another tax benefit in the form of no capital gains tax on stocks sold by the fund manager. This means if you hold your investments on mutual funds for one year, regardless of the fact that your fund manager buys or sells stocks for less than a year, then you will be exempted of any capital gains tax. Whereas, if you look through the direct stock investment, you will have to pay 15% capital gain tax if you sell any stocks within one year of buying it

To offset the impact of poor performers, to get a high return on investments, to get tax benefits, and to get friendly and practical advice, Mutual fund turns out to be the icing on the cake for every low-income investors. What say? Moreover, in this digital era, it is the best way to invest online in the mutual fund, rather than opting for traditional modes. It's time to energize yourself and research online for the best investing partner on mutual funds. Invest your present and save your future.

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ASSOCIATION OF MUTUAL FUNDS OF INDIA
REGISTERED MUTUAL FUND DISTRIBUTOR
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