I had recently a very nice conversation with one of my friend. Since 70% of my wealth is in Mutual Fund, I am more inclined towards the Mutual Fund whereas my friend is having 100% of his investment is in direct stocks. Now he was telling about how his direct stocks investment is better than the mutual fund anyday.
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He started with the expense ratio. Some of the great mutual funds who have given around 15% or more are having a expense ratio of around 0.6 to 1%. Now if you are getting around the same percentage then you are already saving that 1% which will be a huge profit in the future. Again if you have a normal knowledge about the stocks then you can easily get around 15% or more.
I know it's not everyone cups of tea to get this much return and that's where the mutual fund comes into picture. A lot of people will nit have time to do stock investment and for them saving time as well as giv8jg 1% extra is worth it. In the long run Mutual Fund will eventually able to creare a good amount of wealth of you are consistent.
I know it's all about priorities. For some keeping it themselves better whereas for some keeping it simple is better. Someone loves to play with charts and invest whereas someone delegates the job to the expert by giving some extra amount. So yeah whetever you choose, the ultimate goal will be fulfilled I.e to create the wealth in the future. My friend is easily getting around 15 to 16% returns whereas year and he is working from home, so he can spend time on charts and invest. Whereas I have to go office every 4 days in a week and for me I don't get time to do stock trading and for me MF is better. And that's how you can actually find out which is better for you and which is not.
