Mutual fund and share market, they both are the scheme where shares or stocks are purchased. But in the case of the share market, the user himself purchases the shares, and in the case of a mutual fund,…..
…. fund manager purchases the shares on behalf of you, you just only invest your money in a particular fund and then leave everything up to the fund manager.
Hello Friends, In this blog post we are going to let you know about the difference between a mutual fund and a share market or stock market.
Inside this blog post, we will go through Which is better mutual fund or shares? What is the difference between mutual funds and stocks? Are mutual funds affected by the stock market?…….
… Is it better to invest in mutual funds when the market is down? Can you lose money in a mutual fund? Why mutual funds are bad?
If you are in the business of share market part-time or full time or planning to enter into the business of share market then this blog would be a great help to understand the difference between share market and mutual fund.
If I am not wrong you would have seen the advertisement for a mutual fund several times while watching the television, isn’t it?
Or if you are are active online then you would have received the call regarding the trading at least once in your life?
But because of the unawareness of the share market or stock market and mutual fund peoples rarely take interest in the scheme of the share market.
And sometimes most of the users find this share market business very complicated as they don’t understand the share market terminology easily.
But this is also one fact that with the increasing use of internet the share market users have been increased rapidly. And as the whole trading process has been online and all the stuff you can perform by sitting at your home…
… so now the peoples are taking interest in the share market and investing their money into the share market, mutual fund, and other financial schemes.
So here in this blog, we will discuss the basics of the share market and we will also see the key difference between a mutual fund and a share market.
In the share market user, himself does the analysis and research work before purchasing the shares, and once he found the profitable shares then he buys them as per his requirement.
In the share market, the user keeps the ownership for his purchased shares and he can hold his shares or sell them to get a profit.
In share market user has full control over his shares and all the activity related to the shares or stocks.
Whereas in the mutual fund user just only invest in either of the funds and then he is out of the game. later all the responsibilities are handled by the fund manager.
The fund manager manages all the stuff like analysis and research work to purchase the best profitable shares. And the fund manager has full control to buy and sell the shares.
As you have invested in the real estate fund then your money will be used to buy the shares of real estate only but the fund manager will decide which real estate company shares should be purchased. And fund manager will buy the shares as per his personal analysis.
So in the share market, you regulate all the process from buying to selling the shares, and in the mutual fund you just finish your work at the first step where you select the best mutual fund company to invest and you just invest your money in that, later fund manager sees all the work ahead.
Which is better mutual fund or shares?
If we talk in general then both are good and you can invest your money in either of them. But in a mutual fund, you get management security and proper handling by the reputed financial mutual fund company and all the work is handled by the fund manager.
And in the shares or stocks trading, you have to handle each and everything with your mind so if you are enough sound then it will be ok else sometimes the situation may be out of your hand and profit may turn into a loss.
So if you are not much aware of the share market and have a better idea of it then it is always good to go with a mutual funds as most of the peoples invested with you and you are not alone there and you do not have to manage anything to get profit.
But if you are sound enough in trading then you can go either of them without any problem.
What is the difference between mutual funds and stocks?
A mutual fund is a place or a company where the fund the raised through several investors and then this fund is been utilized by the company to purchase the share or stocks.
Stocks or shares are the ownership or partial ownership of a company that you buy by investing your money in that particular share or stock.
Are mutual funds affected by the stock market?
Yes, this is obvious because a mutual fund is the indirect investment of the users or investors in shares and stocks so if the stocks will fluctuate then all the mutual fund which have invested in that share will also affect accordingly wither in loss or profit.
Is it better to invest in mutual funds when the market is down?
This is the fact that there is no perfect time to invest in the mutual fund as you can not predict the market transition anytime. The market is a dynamic thing which can be up and down at any time, this market value fluctuate every minute, but usually market do not get sudden low and high
This sudden rise and down may be dependent on various factors. So you can invest your money at any time in the mutual fund. Even most of the experience peoples suggest investing the money in mutual fund and shares when the market is low as in the case of market rise this will provide you amazing profit.
Can you lose money in a mutual fund?
Actually, this is the tag line in the mutual fund and you would have listened to it most of the time while watching the advertisement or reading the papers that ‘The investment in a mutual fund can be subjected to the market risk’. But this is just a formal warning and we can not deny the mutual fund just because of this. Each and everything in our life can be risky so that does not mean that we stop everything.
As in a mutual fund, all the trading work is performed by the fund manager so they also take the best care of your money. They manage to invest your money in various shares and in the worst case you may get lost either in one or two but most of the funds will be safe. So you do not have to be much worry about this much.
Why mutual funds are bad?
There is nothing like this, nowadays lakhs of users are investing their money in a mutual fund and earning handsome money through it. If you will start seeing only the negative factors while choosing the mutual fund for your money investment then you will always find it bad.
As one can think that in a mutual fund there is some expense which is charged yearly for managing your trading activity this is not much, only 2% of what you will invest.
There are some hidden charges like front end and backend hidden charges. And the most important thing is that you can not make any decision while buying and selling the shares of stock using your money.
But this is just the mentality of few users else most of the peoples are making a good income or money through investing in a mutual fund.
What is SIP in a mutual fund?
SIP stands for a systematic investment plan, as per this plan you can invest small sums of money every month over a period of time. This plan is best suitable for small and medium investors who looks for small investment or investment in installments on monthly basis. Here users can deposit the money in a proper manner without any difficulties.
You can also go through the below extensive blog post related to the share market in hindi:
So within this blog, we have learned the difference between a mutual fund and a share market. A mutual fund is an investment in a fund of any particular company which later purchases the stocks or shares from your money. And in the share market, you only perform each and everything from buying to selling the shares.
Within this blog post we have gone through, Which is better mutual fund or shares, What is the difference between mutual funds and stocks, Are mutual funds affected by the stock market, Is it better to invest in mutual funds when the market is down, Can you lose money in a mutual fund, Why mutual funds are bad.
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