Mutual Fund vs Direct Stock
Compare diversification, effort, and return potential of mutual funds vs picking individual stocks.
| Factor | Mutual Fund SIP | Direct Stock |
|---|---|---|
| Diversification | Instant across 30–50 stocks | Depends on portfolio size |
| Time required | Low — fund manager | High — research & tracking |
| Costs | Expense ratio 0.5–2% | Brokerage + demat |
| Risk for beginners | Moderate, spread risk | Concentration risk |
Verdict: Most investors should core with index or diversified equity MF SIPs and add direct stocks only with surplus skill and capital.
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