My sis-in-law says investing in Mutual Funds or Investing in Stocks are the same thing. Can anyone tell me if this is true or give me a really simple explanation if it is not true? And if you've invested in Mutual Funds would you say you have invested in Stocks?

Mutual funds are investments in an assortment of stocks.

l am 90% sure.

So yes.

Stocks are part ownership of a company. As a company grows and is worth more, the likelihood that the stock price will increase as well. If it doesn't, a corporate raider will go in and try to buy out the company.

Mutual funds is giving your money to a business ''professional'' in hopes that the professional knows what he or she is doing. Most mutual funds are in stocks, but they can be in options, currencies, bonds, real estate and commodities.

Stocks, also known as shares, make u a part owner of a company. If u buy stocks, u r directly owning part of the company.

Mutual funds r big pools of money that different people put together. The fund manager then uses this to buy many different stocks. You should benefit from professional decision-making about which stocks to buy (although the quality of this varies), & reduced risk as you're spreading ur investment across many stocks.

So ultimately, mutual funds do (usually) invest in stocks. But l think if l said ''I've invested in stocks'' most people would assume I'd invested directly.

not exactly, but mutual funds can consist entirely of stocks.

Stocks r little bits of a company that u can buy off them.
You get part of the profits in return.


A mutual fund is where a whole pile of people agree to put their money together.

Then the fund manager goes & invests ur money & tries to make u all rich.Your SIL is partly right because one of the main things Mutual fund managers invest in is stocks. They buy the stocks with the funds money, & use the profits to increase the funds value.

In simple terms the stock market is where mutual funds r traded. The stock market is the whole financial trading world in a nutshell. Everything from stocks to bonds to mutual funds & more r traded on the stock market itself. A mutual fund is a collection of stocks in one fund. One would choose a mutual fund instead of a single stock to reduce the overall risk in their portfolio. That is not to say that all mutual funds r ''safe''. You can buy all types of mutual funds from low risk to high risk.
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