GLOSSARY TERM
Active Investing
Active investing means trying to beat the market by choosing specific investments or timing when to buy and sell.
What does this mean in practice?
An active investor may pick individual stocks, sectors or funds based on research, opinions or market views. This approach usually involves more decisions, more effort and often higher costs than passive investing. It also depends more on being right, both about what to buy and when to act.
Example
Instead of buying a broad world index fund, you choose a small group of companies that you believe will perform better than the market. You may also decide to buy or sell based on your own view of where markets are going next.
Why it matters
It helps beginners understand the difference between a simple long-term strategy and a more demanding approach. Active investing is not impossible, but it usually requires more time, more skill and more discipline and it can be harder to repeat consistently over many years.
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