IN THIS LESSON

Choosing Your Investment Path: Active vs. Passive

Choosing Your Investment Path: Active vs. Passive

This video explores the two main investment philosophies: active investing and passive investing.

  • Active Investors: Aim to outperform the market by picking individual stocks and timing their trades. They believe the market is inefficient, with stock prices not always reflecting a company's true value. Active investors research companies and analyze financials to find undervalued stocks with growth potential.

  • Passive Investors: Believe the market is efficient and reflects all available information. They aim to grow their wealth at the market's pace through index funds. These funds hold a basket of stocks that mirror a specific market index, like the S&P 500 (which tracks 500 large U.S. companies).

The video emphasizes that both strategies are valid. The best choice depends on your goals and risk tolerance.