Share Market vs Mutual Fund – Which one should you invest in?

Share Market vs Mutual Fund
Share Market vs Mutual Fund | Source: paisabazaar

Share Market vs Mutual Fund – Which one should you invest in?

Share Market vs Mutual Fund
Share Market vs Mutual Fund | Source: paisabazaar

Difference between Share Market and Mutual Fund in Hindi, Mutual Funds vs Stocks in Hindi, Difference between Share Market and Mutual Fund

As a new investor, the question that definitely comes in your mind is that which one should you invest in stock market or mutual fund? Both the stock market and mutual funds are attractive and popular investment options.

1 Difference between Share Market and Mutual Funds
1.1 What are Stock Markets?
1.2 What is a Mutual Fund?
1.3 Difference Between Stock Market and Mutual Fund
1.3.1 1. Risk (Mutual Funds vs Stocks)
1.3.2 2. Potential Return
1.3.3 3. Cost of Investing
1.3.4 4. Time or Monitoring
1.3.5 5. Facility of SIP
1.3.6 7. Asset class restrictions or Diversification
1.3.7 8. Tax Saving
1.3.89. Time horizon of investment
1.3.9 10. Control on Investments
1.4 Mutual Fund and Stock Market difference – Brief
1.4.1 Conclusion -(My conclusion)
1.5 Share this Post:

But before investing your hard earned money anywhere, you must have the right information about the difference between Share Market and Mutual Fund. So that you can make the best use of your money.

Today we will understand the difference between Stock Market and Mutual Fund closely. At the end of this article, you will understand in which mutual fund or stock market you have to invest.

Difference between Share Market and Mutual Funds
Before understanding the difference between stock market and mutual fund, it is necessary to know their meaning in brief.

What are Stock Markets?

Investing in the stock market means investing directly in the stocks of a company. In the stock market, we buy companies listed on the stock exchange with the expectation that the company’s share price will increase and we will make profits.

A share of the company also gives us a proportionate share in the ownership of the company. Share means “a part” of the ownership of the company.

A company issues its shares to the public because it needs money. In this way investors buy shares by paying money to the company in exchange for the share price and make some ownership in the company.

What is Mutual Fund?

A mutual fund is a compound fund that is made up of deposits made by several investors. Due to the investment of many people at once, it is called mutual fund.

A mutual fund scheme is managed by a fund manager who is a professional expert. He invests investors’ money in stocks, bonds and securities.

The returns of these investors are decided on the basis of the market performance of all these securities. In return for his services, the fund manager charges investors a nominal expense ratio as fees.

Thus Mutual Funds are an indirect way of investing in the stock market in which you just have to invest your money and leave the rest of the work with the fund manager.

Difference between Stock Market and Mutual Fund

1. Risk (Mutual Funds vs Stocks)
Mutual funds diversify their investors in two ways. The portfolio of a mutual fund scheme consists of a mix of stocks and securities. Well it completely depends on your mutual fund scheme.

Bonds are considered much safer than stocks. If you have stocks and bonds in your Mutual Fund portfolio, then there will be less risk in it.

On the other hand, there is no bond in your mutual fund portfolio i.e. 100% is invested in stocks, even then there is not much risk in this situation.


Let’s say you have 50 stocks in your mutual fund portfolio and one of them goes down, then the entire portfolio will not be affected that much. (A mutual fund is made up of many stocks)

There is a lot of risk involved in investing in the same direct stocks. If Rajesh has ABC Ltd. The company has 1,000 shares. The same mutual fund has invested 2% of its portfolio in ABC Ltd.

If ABC Ltd. If he goes bankrupt, Rajesh will be the most affected in this situation and not the investor who has invested in mutual funds.

Therefore, mutual funds are less risky than stocks.


You should choose stocks or mutual funds according to your risk appetite. You can choose your preference according to the Risk to Reward ratio.
2. Potential Return
High returns can be obtained by investing in stocks through the stock market. If you want to earn more profit in the short term, then you can do this only through the stock market. But for this you need to do proper research and analysis. In the absence of proper research, the possibility of losses in the stock market increases tremendously.

You have to invest in Mutual Funds for a long period of time for good returns. Long-term returns can also be lower than stock market returns.

High returns can be obtained in a short period of time in the stock market but not in mutual funds.


If you can choose some good stocks for yourself by taking the time, then you should definitely invest in stocks. On the other hand, if you do not want to get into the hassle of stocks, then you can invest through mutual funds.
3. Cost of Investing
While investing in mutual funds, you have to pay expense ratios, exit loads, etc. These expense ratios are charged for managing your mutual funds.

If you invest in the same stock market, you have to pay Annual Fee (AMC) on your trading account. Apart from this, you have to pay brokerage, STT, stamp duty etc. on the deals done.

Despite all this, the cost of investing in stocks is less than the cost of investing in mutual funds. Expense ratios are charged from your mutual fund returns, which become high over the long term. Stocks appear more attractive based on their cost of investment.

4. Time or Monitoring

A mutual fund is handled by the fund manager. They keep on making changes in the Mutual Fund portfolio from time to time based on their experience and expertise.

Despite this, the investor has to give some time to stay updated with the information like any change in fund manager, post restructuring, returns etc.

In Mutual Funds the investor can choose Mutual Funds such as Active Funds, Index Funds, Debt Funds as per his risk appetite and goals. All of these require different monitoring. For example, there is no special need for monitoring in index funds and debt funds.

On the other hand, if you invest in stocks, then you have to give time to them regularly. In case of stocks, you will have to check financial data every quarter, keep track of the company’s profits as well as stay updated with every news of the company.

It is certain that stock investing demands time out from you, whereas mutual funds can be tracked for 6 months or even once in a year.

What is Share Market in Hindi (What is Share Market): In today’s topic we will take some basic information about share market. Who does not want to earn money in this world? Money is very important to fulfill the needs of every human being.

If we have money then only we can fulfill our dream and without money our dream will remain as a dream. That’s why today everyone in the world gives more importance to money because money is there, only then you have respect, wealth, home, relatives, friends, all these things.

There are many ways to earn money in the world

There are many ways to earn money in the world, some people earn money by doing jobs, some people earn money by doing business and there are some people who earn a lot of money by putting their money at stake.

But where do these people put their money at stake, what is the place where people still make profits even after putting their money at stake? That place is share market ie share market. Everyone must have heard about Share Bazar in Hindi but not everyone has the knowledge of what happens there. So today I am going to tell you about what is share market and basic knowledge of share market in Hindi.

Share Market and Stock Market is a market where shares of many companies are bought and sold. This is a place where some people either earn a lot of money or lose all their money. Buying a share of a company means becoming a shareholder in that company.

According to the amount of money you invest, you become the owner of some percentage of that company. Which means that if that company will make profit in future, then you will get double the money invested by you and if there is a loss then you will not get a single penny i.e. you will lose completely.

Just as it is easy to make money in the share market, in the same way it is equally easy to lose money here because there are ups and downs in the stock market.

When to buy shares in the stock market? Share Market vs Mutual Fund

You must have got a little idea of ​​what the stock market is. Let’s know how to invest in share market in Hindi? Before buying shares in the stock market, you should first gain experience in this line that how and when should you invest here. And in which company will you invest your money, then you will get profit.

Find out all these things, gather knowledge, only then go and invest in the share market. To find out which company’s share increased or fell in the share market, you can read newspapers like Economic Times or you can also watch NDTV Business News Channel from where you will get complete information about What is Share Market in Hindi.

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