Part 6/8:
Investors have two primary strategies: active and passive. Passive investing involves buying and holding a diversified portfolio of index funds, such as those tracking the S&P 500, allowing investors exposure to broad segments of the economy without needing to manage individual stocks.
Conversely, active investing requires more time and research. Investors analyze economic shifts and trends, looking for opportunities to buy stocks at discounted prices during market downturns. While this approach can offer greater potential returns, it also bears higher risks and demands diligent research to avoid costly missteps.