Lets ask ourselves a question. Why should we invest our hard earned money in Mutual Funds? Why not directly into the Stock Markets by buying Shares? Well, to answer this question I would say that investing directly into the equity markets is a bit risky. You need to understand how the stock markets run. What affects the markets and how it reacts to certain news and reports by the media and the government. You need to know when to get in to a company and when to get out. Some people just get in to a stock and forgets to get out in a timely manner. Traders must know the get in and get out's of trading. On the other hand if you come to the stock market as an investor, then you got to have a very good knowledge of the company your are going to invest. Investing can be done for short term and long term. People have different goals in life. And for that purpose they come and invest.
Traders on the other hand do not come to the stock markets to invest for a very long term. They are very short term investors who look for opportunities to get in and get out quickly and make fast bucks. The game is very simple. Buy at a low price and sell at a high price. And you just made some bucks as profit. However, trading is always risky as the time frame of your investment is too short. Only the professional and experienced traders makes a lot of profit without having too many losses. New comers always get a big loss at some point of time. That is why you need to invest your money somewhere safe but market linked.
Investing in Mutual Funds can bring you a smile on your face. Unlike stocks, in mutual funds you do not buy shares directly. You invest your money into a Fund. Every Fund has a Fund Manager, who manages the activity of that Fund. A group of professionally skilled workers work under the Fund Managers. You get an yearly dividend from the fund.
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