Think of mutual funds like a large ship which takes time to manoeuvre. After all most of them carry 50 to 100 stocks, if not more. The reasons for lesser returns are usually such over diversification, having to stick fo caps on how much cash to hold, how much exposure to have on a certain sector, a specific stock etc.
Whereas a single stock is like a jet ski sizzling across. The risk of falling is higher with a jet ski but if you know how to ride, or better use a speed boat with a good co pilot, then you may actually do well.
Mutual Funds are great for the long term, but over time if you can manage to ride the stock market well, then you would want to have a good distribution between the two.
