Mutual Fund or Direct Equity - Which one is for you?

Are you confused while deciding which one to choose – mutual fund or direct equity? Read on the article to know what an expert mutual fund broker is saying about which one is best for you.

There are two ways of investing. You can either invest in mutual funds or you can buy direct equity. If you are planning to invest with a goal of long term return, direct equity is a good choice for you. As the price of the company share rises, it reflects on the investors' account. This is how investors increase their wealth.

However, in the case of direct investment, things may go wrong if the company does not do well. Since the company losses start to accumulate, investors face a loss as well.

In case of a mutual fund, you, as an investor, delegate the responsibility to a mutual fund broker. The broker can either be a person or a company. So, the question is which one is better for you – mutual fund or direct equity?

Are you aware of business basics?

If you are planning to buy equity shares, you better get a clear idea about the underlying company. The first thing that you should emphasize on is to know whether the company will be able to offer profit while selling its product. Every company needs to take debt while trying to grow its market presence. However, the question that you should ask is how much debt the company is taking. Ask as many questions as you can to get things clear.

I will ask you to try and get the financial statement of the company along with the balance sheets, the declaration of profit and loss. The idea here is to know whether the company is financially sound.

Now, when you are investing in mutual funds with the help of a mutual fund advisor, you do not have to worry about these things. The advisor goes through the statements. The company that works like a mutual fund broker in Kolkata analyzes whether your future earnings will be impacted by the way the market reflects in the future.

Most of these questions are very technical and it is perfectly fine if you do not understand these. That is why it is better to invest in a mutual fund with the help of the mutual fund advisor Kolkata.

Diversification and time:

Some of you may know about the industry or the company the share of which you are planning to buy quite well. However, even if you have a clear idea about the profit and loss statement and how the company works, it is not wise enough to buy the direct shares of that single company only. The best measure that you can take is to invest in different types of shares of different companies. However, when it comes to investing in mutual funds, you can actually take professional help. Mutual fund advisor can guide you in making your investment decisions.

On the other hand, in the case of direct shares, it is not enough to know how a company works. You have to keep a tab of what changes the company is going through as well. Again, it is one hectic task for you.

In my opinion, if you are just starting with investment or if you are not sure about investing in direct shares, it is best for you to choose mutual funds. You can control the exposure of your equity investment through mutual fund investments. It is much simpler than buying the direct equity shares and you will get help from the mutual fund advisor as well.