What is the difference between active and passive investing?
Active investing involves frequent buying and selling of assets to outperform the market, while passive investing aims to match market returns by holding a diversified portfolio.
Which strategy is generally considered better for long-term investors?
Passive investing is often recommended for long-term investors due to lower fees and consistent market returns.
What are some risks associated with active investing?
Active investing carries risks such as higher fees, potential for underperformance, and reliance on the investor's skill and market timing.
Can you give examples of passive investment options?
Sure! Common passive investment options include index funds, exchange-traded funds (ETFs), and target-date funds.
How do fees compare between active and passive investing?
Active investing typically has higher fees due to management costs, while passive investing usually has lower fees, making it more cost-effective.
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