One of the questions we get asked a lot here is “Is Swell a fund?” Nope! Not even a little bit.
First up, the basics
A stock portfolio is a collection of stocks. A stock is a piece of a company’s equity. When you own a stock, you own a piece of a company and are therefore entitled to a share of their profits.
When you invest with Swell, you are investing in the group of companies listed in the different portfolios.
A mutual fund is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and similar assets.
When you invest in a mutual fund, your money might go towards some stocks, but not totally – each one is different.
Stocks and funds are separate, but equally awesome, parts of a successful investing strategy.
Which is best for you?
Not every investing tool is best for every investor, and that’s ok. When it comes to choosing between mutual funds and stock portfolios, the good news is that you don’t have to. They both have a place in your financial life. But, if you’re trying to decide which one to start right now, that’s another story. Ask yourself this question: Do you want to ride with a car service or on the subway?
Managed stock portfolios, like Swell, offer you the financial equivalent to car service. They offer pro navigation that can be set up to match your goals and values. In essence, you get to decide when you get on and off, where you’d like to go, and you are able to change course along the way.
Mutual funds are great if you prefer the subway. You get on and off with everyone else and just go along for the ride. For a “hands off” investor or someone who is just dipping their toe into the investing water, this is certainly an option. However, there is typically no wiggle room in a mutual fund. If you see a holding that doesn’t align with your values or that you’d rather not support, there’s nothing you can do about it.
For each investor there’s a product that fits their needs. Look around, keep an eye on the details and fees – you’ll find what’s right for you!