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Strategy vs Mutual Fund/Stock

Lets Discuss the difference between a Mutual Fund, Stock Investment and Strategy. Lets look one by one...

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  • Investment Period: Strategy is Implemented for fixed period i.e. only 1 month as we are following monthly expiry. Your profit/loss are calculated based on 1 month only whereas in case of mutual fund or stock investment its long term

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  • Liquidity: Suppose you have invested the said amount in Mutual Fund or Stocks then obviously liquidity is there but If it is in negative then what you will do... ? HOLD !! Right !!! and you will think that, when it will come in profit then i will book it. So when you are in need of your own money it may not be available for you. This is point where strategy rocks as T+2 is only the settlement if you close strategy

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  • Risk: Well there is risk involved in all of three but question is how much ? Now see Mutual fund can go down up to 40%, stock also can go down up to 50% but Strategy cant go below 0.5-1% p.m...

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  • Profit: Well coming to Profit, If you observe CAGR (Compound Annual Growth Rate) of your portfolio then it will not be more than 12-17% even for TOP performing Mutual Fund. For Stock investments it will be 12-20% but CAGR of Strategy is about 22-30% Constantly as Risk is Limited. 

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Source: https://www.moneycontrol.com/mutual-funds/find-fund/find-top-fund

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  • Direction: Stock Investments and Mutual Fund Investments are growing only if market is going UP, when it will come down you will be in loss but its not in case of Strategy. You can earn both sides

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  • SIP: SIP is not possible with strategy but it is possible for Mutual Fund and Stock Investment. But it can be used as Collateral to run Strategy

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  • Time Spending: For Mutual Fund you are just transferring amount to AMC and they are deciding stocks to invest so you are spending almost zero time. For Stock Investments you are doing research and then investing so small time spending. For Strategy you have to spend little more time than Stock Investment.

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One may conclude as per their own convenience. We have presented all Pros and Cons of Mutual Fund, Stock Investments & Strategy

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