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by Answers101 on March 15th, 2006

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What is the difference between stocks and mutual funds?

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  • by macdjug-Paxvobiscum on January 18th, 2008

    macdjug-Paxvobiscum

    Mutual funds are a combination of different stocks verses a single one. Funds are still traded through the stock market as shares also. The stock market is a separate entity.

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  • by Anonymous on January 18th, 2008

    Anonymous

    The simple answer is the stock market is where mutual funds are traded. The stock market is the whole financial trading world in a nutshell. Everything from stocks to bonds to mutual funds and more are traded on the stock market itself. A mutual fund is a collection of stocks in one fund. One would choose a mutual fund instead of a single stock to reduce the overall risk in their portfolio. That is not to say that all mutual funds are "safe". You can buy all types of mutual funds from low risk to high risk. Like I said this is the simple version I know a trader or broker will give you a technical description if you want. Hope it helps...

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  • by My Favourite Life on January 18th, 2008

    My Favourite Life

    A stock market is a market (place to buy and sell) stocks. There are several markets in several countries.

    A mutual fund is a bundle of investments (whether stocks, bonds, money, art, precious metals). These investments are managed professionally and shares of the mutual fund are sold to the public. This allows mutual fund holders to diversify among many companies (or whatever) instead of owning a single stock.

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  • by Jon Perryman on March 15th, 2006

    Jon Perryman

    A stock is an investment in a particular company. A mutual fund is run by an investment company that invests in a group of assets (e.g. stocks, bonds, money market instruments). Mutual funds allow you to easily diversify your investments but you give up control of specific investment.

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  • by RaymondMantas on October 21st, 2008

    RaymondMantas

    The differene is that stocks are individual securities that represent a company such as Sun Power at SPWR or you can do a gree mutual fund which is collect of stocks put together in order to reduce risk.

    Sources:

    http://www.amfi.com/types/green-mutual-funds
    http://en.wikipedia.org/wiki/Photovoltaic_module

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  • by spncr2 on March 20th, 2006

    spncr2

    Mutual funds mean a money manager other than yourself. And personally I dislike them. They manage your money and make things look complicated, convincing yourself that investing looks to hard and risky. THey are only their for the earnings of commisions, not always to make money. (now of course not all of them are like this, but from past experience, this is the conclusion i have drawn.)

    Mutual funds are a long term investment for retirement, 401k plan, etc. They give you diversification which means less risk but in the long term also means less reward.

    Stocks are from individual companies. A mutual fund is made up of a whole bunch of stocks. (hence the diversification).

    I trade ETF's quite often. Exchange Traded Funds (ETF's) give you a small amount of diversification meaning more risk, but also the possibility of larger returns. If you were to trade ETF's, they trade just like a stock on any exchange or through any broker. THey are a simple way to get a little diversification, and yet pull back with some rewards. Mutual funds on the other hand cannot be traded through any broker. Fidelity, Merril Lynch, etc. will be able to give you the option of trading mutual funds.

    Good luck with everyhitng!
    Take care.

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