7 Reasons why Stock Investing gives higher returns than Mutual Funds

What is the fuss?

At some point in your career, you will rely on investing to generate wealth and plan for retirement. Typically, the majority of us start with mutual funds, which are a safe and easy way to start investing.

And all of us, at some point, try our hand at stock picking, which means direct investing in the stock market.

Many of us who try stock picking burn our hands. We lose money or book profits too early to make a satisfactory return.

Investors often compare returns from stock picking with mutual funds. We see that returns from mutual funds are better. Then, we refrain from stock investing or keep stock picking as a hobby, allocating a small percentage of our total investment.

What if I told you that, if done right, individual stock investing can give higher returns than mutual funds in the long term?

The important part here is “done right” and “long term”.

You need experience, basic financial knowledge, and emotional control. Combine these three ingredients, and you get the recipe of a seasoned investor who knows his stock market plays.

Long-term is important as the stock market rewards patience, letting compounding work…