There are many differences between shares and mutual funds. From the following discussion we can differ one from another:
Shares
Investing in shares gives
an individual the opportunity to invest in a specific company since a share is
a literal piece of a company. In a share purchase, an investor pays the stock
price of a company's stock as it has been set by the current stock market
conditions. An investor typically retains the shares until the stock price
rises to a level at which selling at a profit would benefit the investor. Some
investors repeat this process over and over, buying at a lower price and
selling at a higher price for a profit. Shares of stocks can be unreliable as a
consistent money maker since some company shares decrease in value and cause
investors to lose money until a rebound of the share price occurs.
Mutual Funds
A mutual fund is essentially a collection of investments. A mutual fund is comprised of investments in a variety of company stocks or in any combination of stocks, bonds, government funds and securities both at home and abroad. With mutual funds, an investor is offered the chance to invest in a number of carefully chosen opportunities to create an automatically diverse investment portfolio without spending the time researching and investing in individual stocks, bonds and certificates.