What is the difference between Mutual Funds and Stocks? It’s Easy

There are many types of investments that you can try to open up more opportunities for profit, for example, investing in stocks and mutual funds. Both are quite similar because there is one type of product mutual funds stocks that are often mistaken for stocks. Before investing, of course, you need to know the difference between mutual funds and stocks in order to increase profits.

Investors are certainly obliged to consider the choice of the type of investment to be chosen because the profit will be commensurate with the risk that will be accepted. In short, if an investment product has a high profit, the risk of loss will also be as high. There are several things that mark the difference between mutual funds and stocks, which are explained as follows:

1. The type of investment the product has

The first marker of the difference between mutual funds and stocks is that each product has a different type of investment. There is only one type of stock product, but there are three types of mutual fund products, namely stock, bond, and money market mutual funds. Each product in mutual funds also has a different company and investment manager.

2. Fund Management

For stocks, investors can freely manage their funds and it would be better if they have a consulting team who are experts in their fields. On the other hand, mutual fund investment fund management has expert staff on duty so investors cannot fully interfere in the process. The staff on duty are referred to as investment managers who pass on the purchases to the companies involved.

3. Risks to Face

Then there are risks that must be faced regarding losses in investment. For stocks with very high risk, it is recommended for beginners to try stocks right away because they are very volatile. In contrast to mutual fund investments, which have a lower risk. However, compared to similar products, there are stock mutual funds with the greatest risk.

4. Profit Results Given

In accordance with the risks that must be faced, stock investors can get profits that are many times even more than the given capital. In contrast to stock, bond, or money mutual funds, which have fewer returns. In addition, usually the profits in mutual fund products will not exceed the investment capital provided.

5. Disbursement of Funds

Furthermore, the process of disbursing funds is also different because mutual funds have an investment manager, a holding account, and a custodian account. This of course makes the mutual fund disbursement process take longer, maybe 7 to 14 working days. On the other hand, shares that do not directly go through a third party will be disbursed faster and go directly to the account.

6. Minimum Investment in Purchase

In stock products there is a minimum investment amount that must be submitted in the purchase and depends on each company’s policy. In addition, some companies may not receive investment fees if they are not open to the public so choose carefully. In contrast to mutual funds that can be purchased starting from only 10 thousand rupiah.

7. Calculation of Taxpayers to be Paid

Stock investment is of course required to pay a number of taxes to the state because it includes assets owned by 0.1 percent when selling shares. There is also an additional 10 percent tax that must be paid if you make a profit. However, this is certainly different from mutual funds which are not required to report profits as part of the tax.

That is a brief explanation of what the difference between mutual funds and stocks is that you should know, so you can match it to your portfolio and capabilities. In addition, it would be better if you try the two products directly so you can feel the difference clearly. That’s the explanation this time about the difference between mutual funds and stocks, and it is hoped that it will be useful.

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