Mutual Fund Vs Stock: Investing in Equity Mutual Funds is preferred for the long term as compared to other investment instruments like Public Provident Fund (PPF), Post Office and other small savings schemes as it easily beats the growth of inflation. However, if one is looking for multibagger returns on one’s money over the long term, then choosing a mutual fund may jeopardize his investment goal. For such investors, it becomes extremely difficult whether they should go straight for the stock market or should they continue investing in mutual funds as the asset managers of one’s AMC are more efficient in picking the value than the investor himself. .
Investment advisor Manish Goel on his website manishgoelstocks.com writes about which is the better investment tool between mutual funds and stocks – “Mutual funds have no history of giving multibagger returns in four years. Considering the high inflation in India However, the real returns are just 5 percent to 10 percent per annum by mutual funds.The biggest wealth in India over the next 5 years (2023-2027) will be created through quality long term equity investment, Manish Goyal further wrote that only money is not important. One should also have time to enjoy that money and hence he advised investors to invest in the stock market as it gives higher returns than mutual funds.
However, every time you invest in a stock and hold it for a long time, the return does not exceed the yield of the mutual fund. for that, you need something Investment strategy.
On choosing quality mutual funds that will give higher yields than equity in the long term, Manish Goyal writes, “Always invest as per the fair value of a stock. Always find out what is the fair value of the stock and then if the stock is fair If the stock is trading below fair value, buy it and if the stock is trading above fair value, sell it.”
On how to determine the fair value of a stock, Sandeep Pandey, Director, Basava Capital, said, “The fair value of a stock is determined on five basic parameters – Intrinsic Value, Price to Book Ratio, Price to Book. earnings Ratio, Dividend Yield and PEG Ratio. If a stock does well on these five parameters, then one can assume that the fair value of the stock is lower than its current market price (CMP) and is suitable to add to one’s portfolio.
Buying in Manish Goyal’s stock
On how an unknown stock can end your search for a value pick, Manish Goyal wrote on his Facebook wall, “Analysis of global education Result – In 9 months of FY 2022-23, Global turns profitable 12.75 crores… extrapolated annually 17 crores… Net worth the company 31.03.2022 was 47 crores…. So, the Return on Equity (ROE) this year becomes 36%!!! This is very good and better ROE than Infosys, Reliance and HDFC Bank. The icing on the cake is that the cash flow position in the December 2022 quarter… Further 2-3 new subsidiaries are formed and profits from those subsidiaries will come in the following quarters.”
See Manish Goyal’s Facebook screenshot below:
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Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.
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