Stocks vs mutual funds?

[dnmccoy]

As someone just getting started, is there any advantage to investing in single stocks vs mutual funds? I have my portfolio setup similar to the 3 fund portfolio idea proposed by Jack Bogle, but I keep hearing people talking about dividends they get and reinvest.

[dougules]

Not generally unless you're wanting to vote on how the company is governed.  Mutual funds allow you to own a broad array of companies so it doesn't affect you much if any one doesn't do well.  You do lose a little of your returns in mutual funds to management of the fund, though, so you need to pay attention to the expense ratio. 

[MustacheAndaHalf]

Mutual funds allow reinvested dividends - you can still do that.

When you buy "Vanguard Total Stock Market", you're buying a slice of ~3500 companies at once.  If any one or two companies fail, you'll be fine.  If someone buys stock in 5 companies, one company failure could mean a -20% loss.  That's called "single company risk", and is a good reason to diversify by buying mutual funds.  Especially index funds.