Mutual funds are considered safer than individual stocks, as they provide diversification by pooling money from several investors and investing in a range of securities. They invest in anywhere between 20 to 90 stocks or more. This diversification helps reduce the risk associated with investing in single stocks. However, the safety of a mutual fund depends on the type of fund you choose. For example, equity funds tend to have higher risk and higher returns, while debt funds are relatively safer but offer lower returns and hybrid funds are moderate risk and offer moderate returns. Always assess the time horizon of your goals and the risk tolerance before choosing a mutual fund.
