Active Investing: Active investing refers to taking a more proactive approach to the management of an investment portfolio. The goal is to outperform – or “beat” – the market
Passive Investing: Passive investing is often utilized by investors with a long-term horizon. The core tenets are that – over a multi-decade time interval – the market will be higher and will outperform the active investing strategy
Active Investing: More concentrated portfolio with fewer securities than broad market index
Passive Investing: All securities of market index held to match market performance
Active Investing: This involves a high turnover that is, it has more buying and selling activities
Passive Investing: This involves comparatively lower turnover as the changes occur usually when theres a change in the index composition
Active Investing: Offers higher returns but involves higher risk
Passive Investing: Offers lower risk but Involves a lower risk
Active Investing: Takes advantage of short-term price fluctuations
Passive Investing: Ignores short term fluctuations and focuses on long term investment goal