Which is better investment in mutual fund or direct investment in stock market?



  There is always a question in the mind of the investor that where should he invest his money. Looking at the increasing inflation nowadays, stocks or mutual funds are emerging as a good option. Retail investors are also putting their money in this. But who is the best, this question remains in everyone's mind. Today in this blog we will try to know the same. Both the methods of investment are risky but get higher returns.

stock marketmutual funds
If you want to invest in the stock market, then you should have enough knowledge that you can invest your money directly and manage it. This knowledge comes only with time. For this we can take the help of experts. It is very important that you have time for all this. Mutual Fund You just need to know which fund you want to choose. After that all the work is done by the fund manager. Fund selection depends on your financial goals. If money is needed after a long time, then you can go to equity funds. Debt funds are good for short term. 
In share investment, you can buy or sell stock according to your SIP or lumpsum. You can take stock of any sector as per your wish. 
Investing in mutual funds can also be done in SIP or lumpsum, but the SIP amount will be debited from your account only on a fixed date of the month. The selection of stocks is also done by the fund manager according to the fund.
You do not get any kind of income tax benefit in stock market investment. Here you have to pay profit long term and short capital gain tax. You can avail tax benefits by investing in ELSS funds. ELSS funds come with a lock in of 3 years. If you are putting money in lump sum, then you can withdraw money after 3 years. This time is more in SIP.
Brokerage charges have to be paid to the stock broker while buying and selling shares. Which has become very less after the arrival of discount broker. Most brokers are working at 20 per order. Full time brokers still charge more. Full time brokers charge 10 paise to 50 paise per Rs 100. The facilities of a full time broker are more than that of a discount broker. They have a complete network of sub-brokers and branches. Which is convenient for investors. Discount Brokers – Zerodha, 5paisa, Up Stocks, Groww, Stox Kart, Samco. Full Time Broker – Motilal oswal, SMC, Icici securities, Hdfc securities.Mutual fund we give expense ratio which depends on AMC to AMC. Expense ratio is less in direct plan and it is charged more in funds taken from Mutual Fund distributor or any broker. Direct plan can be taken online.
Investing in shares requires a lot of research. Through this one gets to learn and develop a skill.Fund manager does all the work in Mutual Fund.
The stocks you buy give you some dividend every year. The condition is that the company chosen by you should be fundamentally strong and should be in profit year after year. ITC, VEDANTA, BPCL, INDUS TOWER, ORACLE FINANCE are some of the stocks which give good dividend to the investor every year. Dividend paying funds are different in Mutual Fund. Not all funds pay dividends. Sundaram dividend yield fund, Icici prudential dividend yield fund, Aditya Birla sun life dividend yield fund are some of the dividend paying funds. 
If you make a portfolio of 5 to 10 stocks, then the returns of your portfolio will depend on these stocks only. If there is a mistake in the stock selection, then it can be risky and the chances of loss are high. By investing in Mutual Fund, you invest in 25 to 30 stocks simultaneously or even more and all this is done by fund management. A whole team works in this which manages your money. Chances of loss are less provided your investment time is for a longer period of time.

Post a Comment

Post a Comment (0)

#buttons=(Accept !) #days=(20)

Our website uses cookies to enhance your experience. Learn More
Accept !
To Top