WHICH IS BETTER FOR SAFE RETURNS, MUTUAL FUNDS OR SHARES?

 

If you're a first time investor in the stock market, you would have to decide choosing mutual funds or shares, well, investing in mutual funds and stocks will financially help you earn inflation-beating returns over time. But how to choose the best trading options that suits your financial requirements? No worries, Goodwill is here to guide you in choosing the best trading options.

If you're a beginner in the stock market, you should seek the guidance of market experts like Goodwill. Goodwill is one of the trusted brokerage firms in India that offers expert strategies to their valuable investors to choose the best-performing stocks at lowest brokerage charges. In this blog, Goodwill will help you to understand the pros and cons of mutual funds and stocks to achieve your financial goals.

BASICS OF STOCKS AND MUTUAL FUNDS:

Stocks are financial instruments issued by the companies to offer a part ownership to the investors. Investors choose to invest their funds in stocks mainly for capital appreciation and dividends which allows them to become a part of company's key decisions. Similarly, mutual funds are also financial instruments where funds from many investors are invested in different assets like equity, commodity, debts, etc. While investing in mutual funds, the fund manager will monitor your investment and invest your funds in the shares.

 

HOW TO PICK THE BEST INVESTMENT?

You can choose the best investment option that satisfies the key factor based on your financial goals:

1. PORTFOLIO DIVERSIFICATION:

Mutual funds allow the investor to diversify their investment portfolio to reduce the investment risk. A good investment portfolio consists of 50 stocks or more in their respective portfolio. This possesses a higher volatility in the portfolio, which will get tested when the market goes up and down. When you choose to invest a small amount in a mutual fund, you can expose to a large set of stocks across market capitalization.

 

2. PROFESSIONAL MANAGEMENT:

Mutual funds are professionally managed by a Fund Management team that conducts research and analysis to choose the best stocks in the market. In the stock market, you can always seek guidance from market experts and brokerage firms like Goodwill, who can offer you the perfect guidance to choose the best stocks in the market.

 

3. COST & TAX BENEFITS:

An investor can enjoy cost advantage in mutual funds on account of the huge transaction volumes involved in buying and selling the stocks. Similarly an investor would choose to invest in long-term stocks rather than investing in day trading stocks to gain higher returns. Although the taxation of the mutual funds and stocks are same,  under section 80C of Mutual Fund scheme, an investor is allowed to claim a deduction of Rs. 1.5 lakhs/year which is not allowed in the stock market.

 

4. VARIETY OF OPTIONS:

In mutual funds, you have a wide range of investment options that allow you to achieve your financial goals. An investor can choose the investment based on the investor's risk profile, tenure, risk-return expectations, market capitalization, sectors and goals. You can choose to invest in a wide range of options available in the mutual funds as it will allow you to diversify your investment with less risk exposure.

 

5. INVESTING DISCIPLINE:

Investing your funds in mutual funds will help you to follow a disciplined approach. SIPs or Systematic investment plans are the most popular way for mutual fund investment as it allows the investor to follow a regular investment. Similarly, when it comes to stocks, brokerage has adopted SIPs into stocks. However, you should be aware of the stock selection as the amount of SIP would vary based on the value of stocks in the portfolio.

 

PICK THE BEST INVESTMENT:

Investing in stocks or mutual funds will always help you improve your financial status. But you should always concerned these investment options to fetch better returns from the investment. If you're a seasoned investor who has time and expertise, then you can consider choosing your own stock portfolio. On the other hand, if you're fine with an expert to handle your funds in an investment portfolio, then choosing mutual funds will be the right option!

Considering the above criteria, you would require an expert whom you can trust in making your investment successful, no worries, become a valuable investor of Goodwill today and make your investment valuable. Goodwill is one of the best brokerage firms in India and offers exceptional strategies to its investors. If you're a beginner to the stock market, you can enrich your trading knowledge through Goodwill's demo trading platform and free training programs. Open your free DEMAT Account with Goodwill now, click here!

 

For more info, visit the official website of Goodwill or make a call on +91 80122 78000 to trade your stocks smartly and efficiently. Stay connected with Goodwill's Facebook Page and get instant live updates on your stocks.