Stock investors often go around touting their superior investment choices. They may even say mutual funds are for "beginners" only.  Quite the contrary... 

Here are a couple of myths that you may have heard:

1) Stocks make more money

• Stock investors will only tell you about their positive ventures. You aren't going to hear about their recent 50% loss in a tech stock. There is definitely a correlation between willingness to talk about returns and how positive they have done recently. 


• There are plenty of mutual funds that offer risky high returns. Take ProFunds, for example. They offer a fund that doubles the OTC performance.

2) Smarter Investors Use Stocks Only

• Imagine you are a wealthy investor like Bill Gates or Warren Buffet. Do you really think wealthy investors invest strictly in one or two stocks? No way! They diversify amongst hundreds of different stocks. This is exactly the purpose of a mutual fund.
  
  Less wealthy investors can purchase shares of a mutual fund or mutual funds to obtain a well-diversified portfolio consisting of hundreds of stocks. Any basic investment course will spend much time proving the advantages of diversification. By diversifying between different stocks and even bonds, you can take advantage of reducing risk and stabilizing returns.

• When you purchase a fund, you are hiring a professional manager who is highly experienced, watches the market constantly, and has access to information most stock investors cannot afford.
  

Other advantages to mutual funds include liquidity, lower trading fees, transaction ease and more benchmarks to measure performance.  If you are looking for a good investment "story", buy a stock.  If you are looking for a smart investment, buy mutual funds.