Are mutual funds better than stocks?
Investing directly in stocks is relatively riskier than investing through Mutual Funds From where do you get the vegetables for dinner? Do you grow them in your backyard, or purchase them from the nearest mandi/supermarket depending on what you need? Growing your own veggies is a great way of eating healthy food, but effort is spent on seed selection, manuring, watering, pest control, etc. The latter option allows you to choose from a wide variety without the hard work.
Similarly, you can create wealth by either investing directly in shares of good companies or investing in them through Mutual Funds. Though wealth can be created when we buy company stocks which use our money to grow their business, direct investment in shares carries a relatively higher risk element. You need to pick stocks by researching the company and sector. It’s a humongous task to choose a few companies from hundreds of them listed on the stock exchange. Once invested, you need to keep a track of every stock's performance for purchase and sell transactions.
In Mutual Funds, all the market research and stock picking is done by expert fund managers. All you need to do to keep track is to follow the performance of the fund rather than following individual stocks within the fund. Unlike stocks, Mutual funds also allow investment flexibility with growth/dividend options, top-ups, systematic withdrawals/transfer, etc. besides helping to ride over market volatility by investing smaller amounts regularly through Systematic Investment Plans.