Matching VS Outperforming the Market · Wealth Creation Academy

Matching VS Outperforming the Market

Active investing involves buying and selling assets to outperform the market, typically through frequent trading based on market trends, research, and analysis. Active investors aim to beat the market by selecting specific stocks or other securities.

Passive investing, on the other hand, seeks to match market performance by investing in index funds or ETFs that track a market index. This strategy involves minimal buying and selling, aiming for long-term growth with lower fees and less risk than active investing.

Outperforming the market means achieving investment returns that are higher than the overall market average, typically measured by a market index like the S&P 500. Active investors and fund managers aim to outperform the market by selecting specific investments they believe will do better than the average stock or sector.

Matching the market refers to achieving returns that are in line with the overall market performance. This is the goal of passive investing, where investors put their money into index funds or ETFs that replicate the performance of a market index. The idea is to mirror the market's returns, rather than trying to exceed them. This approach usually involves less risk and lower fees compared to trying to outperform the market.

What type of investor are you?

Active investor

Passive investor

A little bit of both

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