What investment offers a better payout faster? Mutual funds or common stock?

Question

For someone who wants to get into investing and wants a gain without much risk and to get the gain fast would one suggest mutual funds or just straight out stock?

Answer 1

individual stocks are riskier than mutual funds--because you are one bad news story or one innovation from a competitor or one industry-wide slump away from going far down.

A share of a Mutual fund is essentially a fractional share in dozens (or even hundreds) of different stocks. So your risk is lower.

HOWEVER (and for the same reasons), an individual stock has the potential to make gains much faster.

You have to balance the risk and reward.

Answer 2

There is no such investment that gives you no risk and higher return. If you want to get slow gain, go with mutual funds. If you want to get a fast gain in return, go with stocks. But let me remind you, there are risks for buying a straight out stock because if you make a bad choice on investing in a stock, you will lose your money. With mutual funds, you or your broker will diversify your porfolios, meaning that you will buy a various of stocks to reduce the risk of losing (and give up a change of winning) all at once. So take that into your consideration as well.

Answer 3

The gains in any one stock will outperform mutual funds IF...IF... IF you pick the right one! Mutual funds spread your investment into a number of different stocks, so that the " risk" of losing money is reduced...if that one stock you picked has a bad day, or week, or month!!...there are others that balance your losses with a few gains......that's why they don't return as much. there are almost always some losers in with the winners... but still a "safer" way to approach the business of making money.
If you want " to get into investing" but you don't want " much risk" but still want "fast gains".... you could maybe look into ETF's. They are like mutual funds because they invest in a number of companies (in certain sectors or areas) but the " buy- in" is less than mutual funds and you can spread YOUR money into different ETF's ..and create more diversification (safer)...something like: a few shares of an ETF in " energy" or "mining and materials" and a few shares of another in "Latin America or "Emerging Markets" and a few more in one in "REALTY"
Another approach would be to buy into a "balanced " mutual fund with about 85% of your cash and trade one or two stocks at a time with what's left...
Some ETF info here: http://best-of-etfs.com/family.asp?fam=EXTRADED
Pick up fairly decent stock info on Fast Money ( CNBC, nights)
four guys who know diff areas of the mkts.

Answer 4

Well, you kind of answered your own question. You can't get a substantial gain without taking a larger risk for a quick profit. Unless you were a psychic and could predict an IPO (initial public offering) of a stock that would have a low buy in price and double profits in a day, then be quick enough to get out.

Answer 5

Individual stocks have the most potential for short term return, but you have to be a player and do your research. Mutual funds offer a more steady rate of return over a longer period and are safer as far as loss potential since they are diversified.

Answer 6

if well tracked stock r better

even try index commmodity future