2. Difference between dollar-cost averaging for mutual funds and dollar-cost averaging for stocks

2. Differences between Regular Investment in Investment Trusts and Regular Investment in Stocks

Stock investment trusts are invested in a diversified range of targets from the start. However, since the management is entrusted to others, you must pay a certain trust fee, and at the time of redemption you may also face penalties such as a portion of the trust assets being withheld. Therefore, it is often necessary to read the prospectus and management reports at the time of purchase before buying.

Moreover, trust fees tend to be higher for actively managed stock investment trusts.

Therefore, when the economy is rising, you may make profits, but when the economy is falling or when a global recession occurs, you may incur losses.

And there are products that distribute profits at the time of settlement and those that do not distribute.

Also, because the management is entirely delegated, there are drawbacks such as inflexibility.

If you have actually learned about stock investing, you would not like this kind of management style.

As for stock investing, if you have actually learned about it, I would recommend regular investments in stocks.

Now there is a tax-exempt system called NISA, so profits from stock investments can be entirely yours. Therefore, although it is a profit-seeking investment through a single focus, the accumulation method of regular investing allows for risk reduction while making profits easier to achieve.

If you invest in stock investment trusts and do regular investments with diversified investments, the risk reduction becomes too great and profits become hard to realize. Also, a certain portion of the invested funds will inevitably decrease.

In that case, it may be better to take on a tolerable level of risk and pursue profits through a single-focus stock investment via regular investments.

If, at least, you must bear the responsibility for your investments yourself, I would choose regular stock investments over regular investments in stock investment trusts.

Which to choose is something you must decide for yourself.

And if the goal is to build assets, you should also earn profits from assets. However, with regular investments in stock investment trusts, there are cases where you may not gain any profit until you redeem.

Assets are things that generate money simply by possessing them. Therefore, I do not think regular investments in investment trusts can be considered true asset formation.

If true asset formation is the aim, the “regular investment in stocks” as a single method of asset formation should help you in building your assets.