Active and passive investing describe two different approaches to managing investments.
Understanding the difference helps clarify how investment strategies vary.
Active investing involves:
selecting investments with the aim of outperforming the market
higher involvement by fund managers
Passive investing typically:
tracks a market index
aims to match market performance
often involves lower costs
This article explains the difference between active and passive investing, not which approach is better.
If investment approach feels unclear, some people find it useful to think things through before advice or action. Evoa exists for that purpose — before advice and before action.