Question

Why do some people consider mutual funds a more convenient investment than stocks or bonds?

Answer 1

Because they do not have to personally handle their investments

In mutual funds, a group of investors decided to hire a third party to handle all of their investments in their behalf. In return, the third party would receive small percentage from the capital gains made by the investors.

For investors who do not want to constantly manage their investments, mutual fund is a very convenient option of investment since they can diversify their investments without having to conduct a market research by themselves.

Answer 2

Some people consider mutual funds a more convenient investment than stocks or bonds because owning an individual stock would carry more risk than a mutual fund. The type of risk is unsystematic. Unsystematic risk means that by owning just one stock, you would be carrying company risk that may not apply to other companies in the same sector of the market.