2006-11-22 02:25:25 · 8 answers · asked by raymond t 1 in Business & Finance ➔ Investing
Your question is like asking "What is the difference between a bus and public transportation?"
A stock represents ownership in one company that is owned by one person.
A mutual fund is a portfolio of lots of investments (not just stocks) that is funded by lots of investors.
2006-11-22 08:07:52 · answer #1 · answered by Ranto 7 · 0⤊ 0⤋
A stock is a certificate of ownership in a particular company, for example Coca-Cola.
A mutual fund is a shared portfolio in which many different stocks are owned, and you by a portion of the overall basket. So I have a mutual fund and a third of it is in Coca-Cola stock, and a third is in Exxon, and the remaining third is a bunch of smaller companies. The fund owns the individual stocks and is valued based on how they do overall. The fund managers make decisions about when to buy and sell stocks in order to best increase the value of the fund while keeping the risk where the fund participants wnat it to be.
2006-11-22 10:30:16 · answer #2 · answered by snowgoose8 2 · 1⤊ 0⤋
Mutual funds also involve more costs. This is bc the fund managers and employees all have to get paid. This makes them less attractive, so they pay advisers to recommend them, all of this cuts into your earnings. There are a lot of tools, even online, to help you learn about the stock market and how to find a good company. I'd say do your own research to find good companies and buy stocks, it cuts out the middleman. It may mean you've got higher risk, but if you do the research it's diminished or eliminated. Warren Buffett said, "risk comes from not knowing what you're doing", so learn more about the market and buy stocks. You're portfolio will grow faster.
2006-11-22 16:32:58 · answer #3 · answered by STEPHEN J 4 · 0⤊ 0⤋
Mutual funds can be used to meet your investment objectives, stocks are investments in single companies. Stocks are riskier if you hold only a few. Mutual funds offer diversity and you can pick one that meets your investment objectives, but you pay a fee for them. If you want to invest in oil, real estate, water, small growing companies, large stable companies, China, Europe, the medical field, gold, water, bonds, you name it, there is a mutual fund that can accommodate you. I saw one the other day called the "Vice Fund' which invests in socially irresponsible activities: cigarettes, alcohol, casinos, etc. Typically the more specialized the mutual fund, the higher the fees. Vanguard offers low fee mutual funds and NEVER EVER EVER buy a mutual fund with a front-end load.
2006-11-22 10:38:28 · answer #4 · answered by Mr Chris 4 · 0⤊ 0⤋
A mutual fund is a pool of money from numerous investors who wish to save or make money just like you. Investing in a mutual fund can be a lot easier than buying and selling individual stocks and bonds on your own. Investors can sell their units when they want.
2006-11-22 12:15:39 · answer #5 · answered by NirmalJain 2 · 0⤊ 0⤋
Stock is investment in one company, Mutual Funds are investment in multiple companies.
2006-11-22 10:27:59 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Here's a page for finding a good good mutual fund to invest in:
http://www.best-stock-trading-systems.com/mutual_fund_ratings.html
2006-11-23 03:15:06 · answer #7 · answered by Anonymous · 0⤊ 0⤋
same as having food at home & hotel
2006-11-24 02:02:14 · answer #8 · answered by dinu_pawar 5 · 0⤊ 0⤋