Stocks or Mutual Funds?

Question

I'm looking for a low-risk investment strategy that will consistently give decent returns. I plan on investing once per month in the same type of funds, but should I go with well-known stocks like Apple and Wal-Mart...or should I go with mutual funds? I am using an ING sharebuilder account and the mutual funds listed for me are "Class O" and are bizarre to me. Not a lot of yield information given and they seem downright obscure. Anyways, what do you think? Oh, and I am in this for the long haul.

Answer 1

low-risk, consistent returns, monthly investments, long-term investment.

well, you should definitely go with mutual funds which is, as you may already know, a portfolio of different stocks from various markets which makes it safe. mutual funds are controlled by professional brokers who will take a percentage of your income. lets say your stock portfolio makes 5% in a year, your broker will take 1% and now your mutual funds made 4%.

investing in stocks instead would yield the full return of 5% minus brokerage fees. unless you understand and follow the stock market, play it safe...invest in MUTUAL FUNDS ;D

Answer 2

Try ETF's, exchange traded funds.

Answer 3

By all means, buying mutual funds is a lower risk strategy than buying a single stock and can be expected to give more consistant returns although there will be times when you might not think so.

You do not have to buy mutual funds through your stock broker.  You can buy them directly from the mutual fund company such as Fidelity, T Rowe Price,  Vanguard to name just a few.  These companies sell what are termed "no load funds" because you do not have to pay a broker to buy them.  T Rowe Price has a special deal where you can automatically transfer a set amount monthly from your bank account to your T Rowe Price account and buy shares of their mutual fund automatically.  You can start with a very small initial investment.

http://www.troweprice.com/common/indexHt...

I believe the other mentioned companies might also have such a monthly investment plan.