6 Responses to “What is the difference between: Stocks and Mutual Funds?”

1. Dowjones Says:
   September 10th, 2010 at 3:13 am

   Buying stock is simply buying ownership in a company(shares). A mutual fund is a collection of investors funds pooled together. The money is used to purchase a portfolio of stocks and bonds (anywhere from 5 to 500). The manager of the fund then sells the shares to the public. They are usually less risky than investing in individual stocks because of the diversification.

   Different mutual funds contain different assets depending on the purpose of the fund. Some are designed to grow you money while others are more fore current income. I hope this helps. Email if you have more questions

2. llazyiest Says:
   September 10th, 2010 at 3:13 am

   An individual stock represents shares in 1 company.
   A mutual fund is like a container holding the stock of many companies.
   Instead of trying to pick 1 winning stock (risky), you are buying a fund that has many, therefore less volitile and risky.

3. Michael F Says:
   September 10th, 2010 at 3:13 am

   one is an individual company, the other is a group of all different types of companies..One may have less risk, the individual stock carries more risk, look up ENRON and see what i mean

4. Kiker Says:
   September 10th, 2010 at 3:13 am

   Stocks are an Equity Security. This means the shareholder has ownership in the underlying company; therein deserving rights. Mutual Funds are a collection of Stocks. There is a Fund Manager and a Management team that drafts an investing proposal, the prospectus, wherein they outline their objectives and investment strategies. Then, when people start dumping money into their Fund, they take that money and start buy different stocks from different companies in order to maintain their strategy.
   So when you have access to a Mutual Fund, you are obtaining multiple shares, usually between 100-500. Your actually ownership within these companies is fractional.

5. witz1960 Says:
   September 10th, 2010 at 3:13 am

   Stocks are risky investment in ONE company.

   Mutual Funds spread your risk by buying STOCK in multiple companies.

   on another note… mutual funds also invest in debt / bonds, gold, real estate etc. depending upon their stated goal.

6. Common Sense Says:
   September 10th, 2010 at 3:13 am

   A stock is a partial ownership (ie., share) of a company.

   A mutual fund may own many different stocks, there by giving you diversification (which usually gives you a better level of safety, still risky.. just less risky).

   Buy several books before you do any investing. It will save you tons of money over your lifetime.

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