Stocks beat funds on cost over a long time period since stocks have a one time only cost and funds costs are every year. The down side is risk of course as you have money in one company instead of spreading it over several(funds) companies. On the other hand IF you pick the right company you get more gains then with stock.

If you want to try your hand at buying stocks why not start off with a direct stock plan like Southern Co.(SO). A util. that is not going broke anytime soon and has a NO cost stock plan with many options. You can buy more shares with cash when ever you feel like it or set it up on direct debit from your bank account with as little as $25 a month and have dividends direct deposited into your bank account or reinvested for more shares! I have been buying off and on since 1966 and have it set up now to direct deposit my dividends, but have a direct debit set up also each month. I call it my self raising annuity as my dividends grow each quarter with shares bought with monthly purchases. Every three or four months I will take all my monthly statements and add them to my total to keep a "cost per share basic". SO is a good income stock with very little growth so do not expect it to double in value evey year! With stocks most of time you know how much income you can expect every quarter, but not with funds as they are always buying and selling different stocks with different yields. SO has been paying a dividend every year since 1955 and most years increasing it as they have for this year starting with the June dividend.

Hope this helps.

Copie

If you use a discount brokerage, your cost to own individual stocks will be lower than a mutual fund over the long term as someone else has mentioned.  And there are direct purchase programs as someone else has pointed out, also.  But keeping up with developments in individual stocks can require more effort on your part than keeping up with mutual funds.

Someone else also mentioned international stocks - mutual funds are a great way to invest internationally.  Unless you know the language of the country and have access to economic/market/stock data of that country, mutual funds are the best way for most of us to invest outside the US.

Buying individual stocks gives you much better control over the prices that you accept. You can set limit orders when buying and selling. You can choose which particular company that you wish to sell. I refer to this process as price discipline.

I estimate that you can add 1% or 2% to your long term annualized return by using price discipline. Be sure to buy only when your stock is in the lower third of its 52 week range. Sell when necessary, preferably when it is in the top of its 52 week range.

Have fun.

John Walter Russell 

"Am I missing opportunities by not investing in individual stocks?  What are some reasons favoring stocks over funds? "

Re: IMO> It all depends.. w

1. Do you have your Reitrement Planning all fully funded and have some extra $ to "play with?"

2. I started playing with Individual stocks yrs ago, but they were " The Big Boys", like WalGreens,Walmart, then When Berk B shares came out,  and then, after getting some nice Windfall $? I took 20% of it adn tried my hand at Buying " From the Top 5 Stocks" my M.Fnds owned. (why should have to do all the research when they have already proven they do a good job of it ), throw in a couple of Other Guidelines such as:

Reduce/Sell when they do and Add/buy more when they do

Add some Calls for back up ins. ( even some Options/Puts )

Buy some "On Margin" , thus can get more Bang for Less Bucks..

And If for the short term? Set a realistic PPS when to dump them & maybe in 25% increments or all at once.

EG: