Equity represents ownership, so when you buy stocks, you become a part in ownership of the company. You can choose the stocks of companies to invest in. This includes a higher risk than mutual funds, as mutual funds are pooled investment portfolios managed by professional fund managers in which your money is diversified into multiple assets, like bonds and stocks from different 30-50 companies. Diversification makes it less risky. Direct Investment in stocks is suitable for active investors, while Mutual funds are suitable for passive investors. Cost/brokerage is low in stocks in comparison to MFs, as they have a high expense ratio. Moreover, the stocks are more liquid compared to MFs (depending on fund type).
