Sunday, February 08, 2009

Investment - Stocks or Mutual Funds?

Many a times, you may have this question - should I buy Mutual Funds or Stocks? Well, the answer depends upon what kind of person you are. If you are a trader who keeps track of the stock, the company, the board, the products/solutions/services etc., & if you are ready to take unprecedented amount of risks, you are free to invest in stocks. But, if you are lazy to keep track of these nitty gritty details on a day2day basis, you should consider Mutual Funds.

Playing with stocks is like flying on a jet. It can go UP really fast & it can come DOWN really fast. However, investing in Mutual funds is like driving a car within speed limits. It will be slow (when compared to the jet). But, the risks are minimal.

Have you heard the story of Lehman Brothers? Think about the people who invested their life savings on Lehman stocks. Note: Mutual Funds are not immune to the UPs/DOWNs of the stock market. However, the ride is not rugged. You should practise the same amount of discipline, and thoroughness when investing in Mutual funds also. If you are investing for the long term/retirement, you should definitely consider investing in Mutual Funds.