Know Why Equity Mutual Funds Investing is Better Than Buying Stocks


sdBENGALURU: Mutual funds in India have seen a big dip in recent years as individual investors are buying more number of stocks. Only about 3 percent of the total market cap in India is held through equity Mutual Funds, whereas direct holding by individuals is nearly 22 percent of the market which is 7 times more, according to scripbox.com.

Mutual Fund Investment Seems More Easy And Convenient:

With stocks, you have to open a DEMAT account. Do complex analysis on companies and sectors to understand which stock to buy, know when to sell stocks, pay commission on each trade you make. When a Mutual Fund is managed, a custodian will handle all settlements and safety of assets. It is the job of the custodian to ensure settlements happen safely and investor assets are secured. It’s also a tightly regulated industry.

Instant Diversification of Your Portfolio:

In order to have a well balanced portfolio, you need to have a 25-30 stocks in your portfolio. This can lead to a good mix of performance and stability. Such a basket approach can be achieved if you have a large enough corpus. As an individual, you may not have sufficient funds or mental bandwidth to create a sufficiently diversified portfolio of stocks.

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