Question

• Which one you invest in Stocks or Mutual Funds?

• What stock,mutual fund,ETFs do you suggest for investing if you have $50,000 in short term and long term？

Answer 1

1. Investments depends on the risk profile of the investor, investment duration and the return he/she desires.

• Assuming that the investor is risk taker and investment is for short-term, investment in stock is preferred. It is the quickest way to make huge profits corresponding to the investment made. However due to volatility and uncertainty in the stock market, the return can vary that's where the risk comes.
• If the investor is willing to take moderate risk, and investment is for medium-term, investment in mutual fund is recommended. The investment in Mutual Funds will help in diversifying the risk attached to certain class of investment(s) as these are the pool of different investment avenues.
• If the investor is not willing to take any risk and investment is for long-term, investment in risk-averse or risk-neutral assets like gilts, government bonds is recommended. This is generally for senior citizens.

2.

• Investment amount = $50,000. Period of Investment is Short Term. Investment in Stock. These kind of investments is preferred to make quick bucks with no certainty. That means "the risk is high so does the return."
• Investment amount = $50,000. Period of Investment is Long Term.
  • For risk takers, investment in stocks or equity linked mutual funds. The investment will yield a high return.
  • For moderate risk investors, investment in Hybrid Mutual Funds. This investment will yield in moderate return.
  • For risk-averse investors, investment in Exchange Traded Funds. The return will be low, but the liquidity of such funds are high so as to meet any uncertainty of the investor.