Passive Investing Vs Active Investing
Passive investing and active investing are considered as the two forms of investing with respect to the approach of the investor. Both investing strategies have advantages and disadvantages. One have to choose a form of investing based on many things like the time and money he/she have, his investing experience, self discipline, decision making ability and tolerance for risk.
Passive investing, is the investing to an asset through some one else. The classical example is the mutual funds. The investor invests his/her money to the market through mutual funds. Others include government bonds, savings accounts, etc. The advantages of passive investing are minimum need of time and attention, requires not much experience, exemption from taxes, and relative sure profit. The disadvantages are lesser control over your money and very small profits.
Active investing is the direct investing of your money to assets like stocks, options, futures or currencies to make long-term or short term profits. This form of investing requires extensive knowledge and experience with time. Active investing holds no space for emotions. The advantages include better control over money, higher profits, etc. The disadvantages of active investing are the need of investing knowledge and skill, higher chance of loss etc.
Passive investing, is the investing to an asset through some one else. The classical example is the mutual funds. The investor invests his/her money to the market through mutual funds. Others include government bonds, savings accounts, etc. The advantages of passive investing are minimum need of time and attention, requires not much experience, exemption from taxes, and relative sure profit. The disadvantages are lesser control over your money and very small profits.
Active investing is the direct investing of your money to assets like stocks, options, futures or currencies to make long-term or short term profits. This form of investing requires extensive knowledge and experience with time. Active investing holds no space for emotions. The advantages include better control over money, higher profits, etc. The disadvantages of active investing are the need of investing knowledge and skill, higher chance of loss etc.
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