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Why do people invest in mutual fund rather than directly buying shares?
How on earth can you possibly know what is going on in individual company X?  The sole exception is if it is your own company. The stock markets of the world are in fact a nest of sharks.  The big sharks essentially make money out of the little sharks.  Some little sharks manage not to be eaten, and grow bigger.  Good luck with that. "Insider trading" is, when found out, a crime these days.  But "insider knowledge", "insider hints", "knowledge of market sentiment" and indeed just rumours about a given company are the kinds of things you won't particularly get to hear of in the fog of disinformation, and don't particularly want to waste your time with for a very uncertain loss or gain at the end of the year. The thing I find annoying about mutual funds is that they can be very stupid, and I speculate that it may be the consequence of the marketing on the one hand, and the commission structure on the other.  I started cashing in my funds in late 2007, following the collapse of Northern Rock here in the UK.  The "2008" crisis was in fact the slowest economic car crash in history. But very very few mutual funds saw, or seemed to see, the way the wind was blowing, and switch massively to cash. If the punters had the courage to hang on, of course, mostly stocks bounced back in 2009 and 2010.  Moral: remember you can cash your stuff in any time you want.