Investing: Active vs Passive

Active Process

Monitor price of position by researching or analysis

Out-performing benchmarks/Alpha Return

Passive Process

Little to no research

Diversifying/Mimic Benchmark

Inefficient Market

Higher Fees

Lower fees

Efficient Market Hypothesis

Buy as soon as they have the money too

Index Funds

Mirror the Market

Get a decent portfolio

Mutual Funds

Long Track Record

Outperform the market/SMP500

International

International Companies

Global Fund

Growth and Income

Large Capitalization Fund/Blue Chip

Most stable/boring/large campanies/ goes slow

Growth

Miidcap fund/SMP500/does what the market wants

Aggressive Growth

Small Cap/crazier mix/moves fast/merging market

Works better than International funds