Darla SandyKnowledge Contributor
Do you prefer active or passive investing, and why?
Do you prefer active or passive investing, and why?
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Active Investing:
– Involves frequent buying and selling of securities in an attempt to outperform the market.
– Requires research, analysis, and potentially higher fees for active management.
– May offer the potential for higher returns if successful, but also carries higher risk and requires time and expertise.
– Appeals to investors who are confident in their ability to select winning investments and are willing to actively manage their portfolios.
Passive Investing:
– Involves investing in broad market indices or exchange-traded funds (ETFs) to track the performance of the overall market.
– Typically has lower fees and requires less time and effort compared to active management.
– Aims to match the market’s performance rather than beat it, offering diversification and stability over the long term.
– Appeals to investors who prefer a hands-off approach, prioritize low costs and simplicity, and believe in the efficiency of markets.