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Mutual Funds vs. Stocks: Which Are Better Investments?

Leaving money in a stagnant bank account guarantees that inflation will gradually reduce your purchasing power. Most bank savings rates don’t keep up with inflation, and even if they do, the interest payments get taxed as ordinary income.

Investing in various assets can help investors beat inflation and reach their retirement goals sooner. Mutual funds and stocks are both useful starting points because they are very liquid and don’t require much capital. You can get started with as little as $1; by contrast, real estate properties often require hefty down payments.

Mutual funds and stocks each have their strengths and weaknesses as investments. This guide will explore some of the differences and help you determine which type of asset is right for you.

This post originally appeared at U.S. News & World Report.