Blog #10- Individual Stocks Or Mutual Funds?

Feb. 23, 2019 8:02 PM ET13 Comments
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Contributor Since 2010

Over thirty years experience with the stock market and investing. Enjoy actively managing several portfolios. Looking for diversification in portfolios. Research and homework on stocks are enjoyable: BS Ed./MS- Thirty years of coaching HS Varsity Football- Proud husband to my beautiful wife - Dad to five amazing children- Keeper of two stunning Bengal cats and a handsome Cavapoo. Trying to glorify God and lead by example.


  • Are Investors better off with Mutual Funds or Individual Stock in their portfolios?
  • Let's be clear on what an Investor is compared to a Speculator.
  • How do my Individual Stock choices compare to my Mutual Fund selection.

So you want to invest in stocks. Good for you. Will you invest your money in Individual Stocks? Will you invest you money in Mutual Funds? Will you invest you money in Index Funds? So many choices to make. Let's take a look at what you might expect when it comes to investing your hard-earned money.

To be very clear, I have two portfolios. One has nothing but Individual Stocks, while the other portfolio has both Individual Stocks and several Mutual Funds in it. I will share with you the returns of both selected Individual Stocks and the returns of the Mutual Funds. I have no Index Funds in either portfolio, but do have a Vanguard account that holds The Total Stock Market Index.

Before looking at my returns, I want to be clear to all that I am an Investor not a Speculator. I invest for long-term returns and the daily ups and downs of Individual Stocks really do not interest me. Speculators are day-traders and look short-term as opposed to long-term. Which are you?

I have significant shares of Fidelity's ContraFund in one portfolio and shares of Fidelity's Select Biotechnology Fund in the same portfolio. My returns to date are: ContraFund- 96.63% and BioTech Fund- 14.13%  

In the same portfolio, several Individual Stocks, with their returns, are: Apple- 78.79%, Boeing- 231.74%, Exelixis- 176.37%, Cronos Group- 183.17%, and Disney- 78.64%. Some of the less impressive Individual Stocks in that portfolio are Berkshire Hathaway B shares- -1.15%, North European Oil Royalty Trust- -17.45%, and Sirius XM Holdings- -6.12%. When looking at Individual Stock returns vs. Mutual Fund returns, I see that I have several Individual Stock performing well above the returns of my Mutual Funds, but I do have several stocks performing well below the same returns. Would I be better off getting out of either Indvidual Stocks or Mutual Funds and investing exclusively in one or the other? I like the mix that I have in this portfolio and will not be making that move yet. When I do get to that point, I believe that I will get out of Individual Stocks and put all of my investment money in Mutual Funds or Index Funds.

In portfolio number 2, I have nothing but Individual Stocks and my leaders are SkyWest- 274.88% and Vericel Corporation- 249.69%. Some of lesser returners are Barclays- -1.63% and Martin Midstream Partners- 1.55%. In looking at this portfolio, I am thinking that I will be selecting a mutual fund to include in the mix.

Both portfolios are diversified and I have consistently looked to add dividend payers to both over the years. This is something that I would highly recommend to any investor.

So, Individual Stocks or Mutual Funds? If you are investing for yourself, I would suggest that you consider the time that it should take you to research and monitor your Individual Stocks. Mutual Funds certainly require less time on your part, although you should be monitoring them to make sure that you are achieving what you intended when you bought shares or these Funds.

I will continue to hold both Individual Stocks and Mutual Funds in my portfolios. 

If you have any questions, please feel free to leave a comment or direct message me.

Happy Investing to you!

Disclosure: I am/we are long AAPL, BA, EXEl, CRon, DIS BRK.b, SIRI, NRT, SKYW, VCEL.

Additional disclosure: I am long all stocks and mutual funds mentioned above.

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