Most new investors face this dilemma of whether they should buy the stocks directly or they should let the professionals handle the stock picking process. There is no definitive answer to this and it varies from person to person. Read on to make an intelligent decision regarding the investing platform.

Mutual funds are basically asset management companies which collect money from a lot of investors and then make sure that they employ stock market experts who try and generate returns on the money that you have invested. Now these asset management companies charge money to manage the funds and that is known as the entry or the exit load.

Mutual finds are better suited for people who have less capital and yet want to play big in the market. They can easily buy the units of the mutual funds of the good asset management companies and that will in general help them to invest in good companies via proxy route.

Mutual funds in general are for those also who do not have time to check the stock prices every day. It is suited for people who want to invest but do not have the time to invest in the market. Mutual find companies have schemes whereby you can open up a systematic investment plan and each month a specified amount will be invested in the units of the mutual fund scheme that you designated. This is the best style of mutual fund investing as you can very easily get the benefit of the dollar cost averaging.

On the contrary if you are a big stock market players then it is better to invest yourself in the stock market. The simple reason being that you can save a large amount of money by avoiding the exit and the entry loads. Also then you can easily define your stock picking strategy as opposed to relying on the stock picking strategy of the portfolio manger. You have direct control over investments. The only challenge in this is that you will have to devote huge amount of time managing your stock portfolio.

Well you can choose a middle path where you invest in stocks directly as well as scan the mutual fund industry for schemes that you think are very good and can easily give better returns than the index. This way you get the best of both the worlds and you can also diversify your risk considerably.