Funds offer lower costs, but also fewer profit opportunities

In passive investing, investors aim to follow the market's performance and benefit from it. One major advantage is the lower cost, as passive funds are not actively managed and therefore cheaper.

Lower risk, but also less flexibility

Funds usually spread the risk by investing in a wide range of companies, which reduces overall risk. These investments are transparent, avoiding unpleasant surprises, and offer solid long-term returns. However, there is less flexibility during market fluctuations, and extraordinary profits, such as those offered by cryptocurrencies, are left out with this strategy.

Active investing requires knowledge but offers higher chances

With active investing, the investor takes control and attempts to outperform the market through strategic buying or selling. This, however, requires extensive knowledge of the markets and investment strategies. While there are more chances for profit, there are also higher risks and potentially higher fees due to fund managers. Active investing is best suited for experienced investors with specific goals.

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