---
title: Should I Invest in Stocks or in a Stock Mutual Fund?
description: Which is better, picking individual stocks or investing in a stock mutual fund? Here's what you need to know to help you make a decision.
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published: '2014-05-27T14:41:48.000Z'
modified: '2024-04-02T04:38:01.000Z'
section: Investing
tags:
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  - equities
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  - Investing
  - investment
  - mutual funds
  - stocks
canonical: https://money.com/collection-post/investing-stocks-or-mutual-fund/
type: Article
source: structured-blocks
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> **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/).

![Should I Invest in Stocks or in a Stock Mutual Fund?](https://money.com/img/logo-social.png)

Most investors should use funds rather than [individual stocks](https://money.com/collection-post/what-is-a-stock/).

Smart stock investing takes time and intensive research. It also requires a significant outlay of cash to build a well-diversified portfolio. An alternative, which is to hold a highly concentrated position in a handful of stocks, gives you a shot at huge gains (imagine if you bought Apple in 2002 for $7 a share) but also risks catastrophic losses (imagine you owned stock in Enron or Lehman Brothers, at any price.) A [mutual fund](https://money.com/collection-post/what-is-a-mutual-fund/) automatically spreads your bets among dozens or even hundreds of stocks.

That said, stock investing is intriguing and even fun for many people. If you want to wade into the [market](https://money.com/collection-post/how-does-the-stock-market-work/) on your own, you can use funds as the core of your portfolio and set aside a smaller dedicated account for your own picks.

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