The Knowledge Option

For investment purposes, what is better, mutual funds or stocks?
This depends upon the person. If someone is aware of the stock market and he can spend time on research, understand how the whole thing functions, including risk and if his investment grasp is very clear, then a person can invest directly. But if that is not the case, then invest through mutual funds. In a mutual fund your money is managed by a professional. It is similar to hiring an expert to handle your money for you. Start with a small amount for your investment purposes and invest regularly. And even the risk is less because of diversification.

This article was originally published on July 27, 2009.