Article: Mutual Funds vs. Stocks - Which Are Better?

If you've been investing for a while, you have probably been exposed to both stocks and mutual funds. And you may have wondered if one of these investments is inherently better than the other. The answer: Both mutual funds and stocks offer distinct advantages.

Let's start by looking at mutual funds. The biggest benefit of owning mutual funds is probably the automatic diversification you achieve. Each mutual fund invests in dozens, or even hundreds, of individual investments - stocks, bonds, government securities, money market accounts and more. When you spread your money among an array of investments, you can lessen the effect of downturns in just one type of asset class.

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