It is just instinctively, that brought to justice. Success stories - some true, many false positives - people becoming millionaires overnight, are obliged to allure anyone. But the fact is that the stock market is not just money, Stock market not every cup of tea.

This is our hard-earned savings, which is at stake. So let's be very specific about it.

Do you have adequate capital?

It is just common sense that a diversified portfolio of 18-20 stocks is less risky than a portfolio with only a small 3-4 stocks.

However, for retail investors, capital is usually limited. In this small money supply would not be likely to properly diversify its portfolio. In this condition, mutual funds to extend the alternatives to be part of a well-diversified portfolio, even with a small capital as $ 100.

Naturally, the small portfolio can give super natural returned, but on the other hand, the risk is very high. This high-risk, high-reward scheme would not be suitable for an absolute majority of retail investors. It just suited to choose a couple of expert investors who have a lot of money to put on the market.

In addition, with moderate capital is difficult to buy pricey shares, as Google, Infosys disks, etc. This is our low price of purchase of shares. Generally speaking high prices stocks will be good stocks and low stock prices might not be that good stocks. Thus, with limited capital you would eventually yield to the portfolio.


Given that moderate capital may mean small and worse portfolio, mutual funds are perhaps the more preferred route for those who can not attract enough money to invest

Do you have the relevant knowledge and experience?

OK, let's be really honest and frank here.

Do you have a broader knowledge about the companies, economy, market trends, etc., than qualified and experienced professional investment company?

Can you interpret a balance sheet and annual reports as easily as investment company and make the right conclusions?

Can you identify future growth sectors? Or those who may encounter downswing in the near future?

In short, you are more knowledgeable than the investment company?

In 99% of cases, the answer is "No".

So why is the general retail investors, impose tough terrain securities industry, when you have a chance to allow people to have a task to do for you?

Do you have enough time and resources?

Let us assume that you have big bucks to invest, as well as a very clear understanding of stock markets. But if you have three important criteria, "Time and resources"?

There are many listed companies. Some are booming, some of them have been booming, and some will be booming. You need to buy shares, which will be prosperous, you need to break those whose flowering stage is going to stop, and you must adhere to those who are still at the stage of success. Timing is very decisive for the fate of stock markets.

Now this list holds varying quite often, and this requires constant research to keep themselves updated. Thus, many retailers will not be investors who can afford to devote time to examine thousands of annual reports and track the performance of companies. In addition, annual reports, not all that is needed to research company. How many of us can travel at the premises of the company, contact their management and speak on their plans, earning expectations, etc.? Can you personally talk to industry experts? Even if you can do all this, it can be done on a regular basis - every day every year?

So who is best person to make a sound research - Mutual fund with his team of experienced research or you who are too busy our own business / job?

In contrast to all this, opt for mutual funds is a relatively easier task. In addition, he is not asking for careful monitoring. Thus it becomes the best option for retail investors to enjoy a yield of the stock market without being forced to commit much time and effort.