Which is better: equities or mutual funds?
First, though we try to provide as much information as we can, we are not able to provide any specific investment or financial advice. A registered financial advisor can provide advice on the types of investments that are a good fit to your financial goals based on your specific financial circumstances, investment needs, objectives and risk tolerance. Investments generally fall into three categories: equities, fixed income and cash or equivalent investments. Equity investments are another word for investments in the stock market. Fixed income investments aim to pay regular income while protecting your principal, for example, different types of bonds and some GICs. Cash or equivalent investments include savings accounts, fixed-term deposits and highly liquid investments like money market funds.
A mutual fund is an investment that pools money from many people and generally invests in a mix of investments such as (equities) stocks and fixed income (bonds). As an investor, you own part of the mutual fund by buying units. There are many types of mutual funds, each with its own objectives and risks. A professional manager chooses investments that match the fund’s investment objective for risk and return. Learn more about how mutual funds work. Equities, also known as “stocks” are an investment in a specific company. When you buy stocks of a company, you’re basically buying a piece of that company. As an investor, this entitles you to your portion of the company’s profits, typically paid in the form of dividends or you stand to profit if the share stock price increases. Learn more about how stocks work.