Stocks vs Mutual Funds: Which Will Make You a Crorepati

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08 min read

You can become a crorepati if you regularly invest in the right stocks and stay invested for the long term. It would help if you were a savvy investor with the ability to select fundamentally strong stocks. However, you will have to stick with your stocks irrespective of the market conditions and add to your portfolio on a stock market correction.

You may become a crorepati faster through stock investments than equity funds, provided you select stocks of fundamentally strong companies. You will have to look out for stocks of companies with an economic moat. It is a distinct advantage that a company enjoys over its competitors, helping it build market share. However, you must have a thorough understanding of the stock market and the ability to pick the right stocks to become a crorepati.

You can also become a crorepati if you regularly invest in equity mutual funds. It puts the bulk of the corpus in stocks. You have different equity funds that put money only in stocks of large, medium or small companies according to the mutual fund’s type and investment objectives. Moreover, you also have equity funds that invest in stocks of companies across market capitalisation. 

Your investment in stocks may be subject to extreme market volatility where you bear a higher risk for a greater return. You could invest in equity diversified mutual funds, which spread your investments across different sectors and industries. You enjoy the benefit of diversification that protects your investment from the volatility of the stock market. Moreover, you must always invest in stocks or equity funds based on your financial goals and risk appetite. 

Stocks vs Mutual Funds: Which will make you a crorepati faster?

You can invest in stocks or equity funds to become a crorepati. However, you may choose to put money in equity funds compared to stocks if you are a beginner in the stock market. You may invest in equity funds through the systematic investment plan or SIP instead of putting a lump sum amount.

It is a way of investing a fixed amount regularly in a mutual fund scheme of your choice. It inculcates a disciplined approach, and you enjoy the power of compounding, which is returns earned on your return from the investment. 

Let us understand how investing in equity funds through SIP can make you a crorepati. Suppose, you start a monthly SIP of Rs 5,000, Rs 10,000, Rs 20,000, Rs 30,000 and Rs 40,000 in equity mutual fund schemes. Let’s calculate the number of years it takes to become a crorepati with an expected return of 10%, 12% and 15%?

Rateof Return (%)


Monthly Investment (Rs)

10%

12%

15%

5,000

29

26

22

10,000

23

20

18

20,000

17

15

13

30,000

14

13

11

40,000

12

11

10

You may become a crorepati faster if you invest in stocks compared to equity mutual funds over the long term. It would help if you were a savvy investor who understands the stock market. You can become a crorepati even if you invest in equity funds through SIP. It may take longer as compared to stocks. However, it may be a safer approach for beginners in the stock market.

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