Active vs Passive Investing: What’s Better for You?
🚀 Quick Answer
For most everyday investors, passive investing is usually the better choice. It offers low fees, broad diversification, and long-term performance that often beats most actively managed funds.
Explanation
Active investing tries to beat the market by buying and selling based on research, predictions, or timing. While it can occasionally outperform, it often comes with higher fees, more risk, and inconsistent returns.
Passive investing, on the other hand, involves buying low-cost index funds or ETFs that track the market. Over the long run, passive strategies tend to outperform most active managers — especially after fees are factored in.
For amateur investors without the time or expertise to actively manage their portfolio, a passive approach is simpler, more predictable, and statistically more effective.
Related Reading
- Read our Investing in Canada Beginner’s Guide
- Explore our article on choosing between ETFs and mutual funds
