The difference between active vs. passive investment management

Active investment managers typically buy stocks for a portfolio and continually buy and sell stocks for that portfolio based on information they believe makes certain investments or market sectors exploitable. Given the level of work involved, active managers tend to charge a higher expense ratio

On the other hand, passive investment managers believe that the market is generally efficient and not exploitable. These investment managers buy investments that correspond to a market index and let them grow long-term. Passive managers are not constantly re-evaluating their fund portfolios so they may charge a lower expense ratio. 

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