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 The difference between investing in stocks or mutual funds is largely a matter of specialization verses diversification. While stocks are purchased as shares of a single company, mutual funds can be seen as a diverse portfolio of stocks, bonds, or other securities which are purchased by a group of investors and managed by an investment company. Both stocks and mutual funds offer the investor the opportunity to make his own decisions, or place the decision-making in the hands of a professional. By their very nature, mutual funds offer a greater degree of diversification. If the value of one security in a mutual fund drops, the loss may be offset or cushioned by the stability of other securities in the portfolio. Stocks, on the other hand, can also be diversified by choosing a diverse selection of stocks which complement one another. Stock transactions are usually more complex than mutual funds transactions and tend to attract those who are comfortable using their own investment skills. Fund investors, on the other hand, are attracted by the convenience of leaving the decisions in the hands of a qualified fund manager. Disclaimer: Mutual funds are sold by prospectus which contains important information. Please carefully consider investment objectives, risks, charges and expenses before investing. For this and other information, please obtain a prospectus from your registered representative for the product you are considering and read it carefully before you invest. |
Investment Opportunities & Options • Investment Portfolio Diversification • Stock & Bond Alternatives • Mutual Funds • Mutual Funds vs. Stocks • Traditional IRAs and Roth IRAs Banking Opportunities & Other Savings Alternatives • Savings Alternatives |
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