“shares” refers to a the ownership certificates of a particular company. This is a unit of account for various financial instruments including stocks, mutual funds and limited partnerships. A share is a unit of ownership of a company that is issued by the company to raise finance to enable it to extend its scope or fund other growth related initiatives. If you buy a share, you are a co-owner of a company. A shareholder is a part owner of the company who can influence decisions related to new business venture and the like and also receives a share of the profits generated known as dividends. If the company gets more valuable, your share will usually get more valuable. If the company makes profits, like any owner, you should get share of that profit, called a dividend.
A mutual fund is made of of many investors who buy shares of the fund.
Mutual funds are a long term investment for retirement, 401k plan, etc. They give you diversification which means less risk but in the long term also means less reward.
A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, and/or other securities.These are investment opportunities offered by a finance institution which may be in the form of shares, bonds and other forms of securities.The investor buys hundreds of shares and other investments. You can participate and own a fraction of those investments. If the funds investments do well, you do well. The investor gets paid from fees, usually about 0.5 - 2% of the money invested.
Different funds specialise in differnt types of stocks. A fund manager picks those stocks and buys and sells them in order to increase the value of the fund.
The essential difference between the two is that a share has the advantage of the holder discerning market trends with respect to the specific company while in a mutual fund the investor often cannot determine the exact channels of return on investment which is the domain of the portfolio manager in charge of the mutual fund
