When you buy shares in the fund, you become a shareholder. When you give your money to the fund, you are giving your money to the expert money manager of the mutual fund. Mutual funds give you diversification and expert money management which allows you to sit back and relax. Your choice of whether to pick a stock or mutual fund, is based on comparing their risk, return, and their expenses. You should also look at the pros and cons of both mutual funds and stocks.
Mutual funds carry a low amount of risk.
If you are a low risk taker, mutual funds may be for you. If you can't stand watching your money going up and down every day by large amounts, then invest in mutual funds. Because they diversify. They give your money a little taste of everything. The fund will invest your money in a number of different stocks in different industries.