Mutual Fund Vs Share

1. Risk Level-In Mutual Fund your money is managed by professional fund managers but in Shares the money is managed by you thus there is high risk in direct equity as compare to mutual fund.

2. Time required-In Mutual Fund there is no needed to watch again and again in market you need to review your portfolios 3-4 times in a year.But in share there is need of daily or weekly review your portfolio.

3. Knowledge Needed-In Mutual Fund there is only basic knowledge needed while for investment in shares there is need of knowledge of financial statement i,e profit and loss ,Balance sheet etc.

4. Return Potential-In Mutual Fund the return potential is stable and also return depends on types of mutual fund you choose i,e equity ,hybrid etc.,in share the return and risk potential is high.

5. Suitability for salaried professional-The mutual fund is highly suitable for salaried professional as there is no need for daily research but in share market you need daily research and if missed share update there may be huge loss.

Mutual Funds vs Shares: Risk vs Reward

1. The Mutual fund is having low volatility as it invest in many companies and does not impact for fall in 1 company share price on the other hand the share are of high volatility as price can rise or fall suddenly also a single bad news about a company can cause sudden price swings.There is more fluctuate in share price in a single day.

2. During sharp market corrections there is no requirement of emotional discipline in mutual funds but in share market the emotional discipline required a lots as 1 company share price can falls high.

SIP IN MUTUAL FUND VS LUMPSUM INVESTMENT IN SHARES

• SIP allows investors to invest fixed amount regularly every month.

• SIP help building financial discipline for salaried class people in india.

• SIP benefits rupees cost averaging ,which reduces the risk of market volatility.

• Lumpsum investment in shares required large amount at one time buying stocks.

• Returns depends upon correct stock selection and market timing.

• If the market falls significantly the portfolio values may drop significantly.