Unit trust is actually where the manager use the pool of investors' money to invest in STOCKS. So it actually comes back to stocks! The difference is - a UT manager can choose and buy a lot of stocks using the huge pool of investors' money whereas retail investors like us can't do that. We've got limited capital. Therefore, buying UT gives us great diversification which translates into lower risks (if some falls, others gains to cushion the fall) compared to retail investors buying a few stocks on their own (if 3 falls, the other 2 can't cover back).

HOWEVER, if the global markets, especially US and China (& perhaps Euro) falls, it will affect your UT as well coz, like I said, it comprises stocks as well, which are vulnerable to macroeconomic factors, though it won't fall as much as buying your own stocks (if you buy the bad ones).

Despite this advantage, buying UT is not good in the sense that the manager charges you a hefty sum of fees which eats into your yields. If you got a good manager who gives you very very high yields then maybe the fees is insignificant, but what if he's a bad manager? The fees was most of the time paid upfront and in the end you've got no yield and he can simply blame the global market!

That's why many people dislike UT coz it won't give you too high returns, perhaps even lower than putting into FD. If wanna get better returns than FD, stocks is the answer. As long as you do your homework, follow news and read books + magazines, maybe with a good mentor, then investing in stocks maybe isn't that bad after all.

Perhaps if you're worried, you can always go for the safe stocks first. I suggest REITs (that gives average 6% returns) and some other defensive stocks which I'm also trying to identify myself.

As for the books for beginner stock investors to read, check out my blog here: Books for Beginner Stock Investors

Hope this helps!