Active versus passive investing. Which one is good for you, and why it suits you?
Today, we're going to talk about active versus passive investing.
This is a presentation that I put together a few months ago for a course that I wanted to teach. Unfortunately, plans kind of fell through for that course, but I didn't want to put all of the hard work that I had for this particular presentation to waste. So I figured I'd upload it here for all of you with a little bit of commentary, and hopefully, you learn something at the end of this, because this isn't just like a basic lecture that doesn't have any data or real-world examples, et cetera.
It's going to show you a little bit of the data that goes behind the active versus passive investing argument along with of course definitions. If you're not familiar with what that argument is in the first place. So before we get started here, let's very quickly define active investing and very quickly define passive investing.
Active investing is where you go out into the world and try to pick individual stocks that you believe are going to outperform the market.
The market is defined as an index or a basket of stocks that are representative of the entire economy. So S&P 500 is an example of a market index. The Dow Jones is an example of a market index. The footsie 100 is an example of a market index. So basically what you're looking at here is active investing is where investors put a lot of time into researching stocks and researching stock sectors to try to identify outliers that are going to generate a higher return for them relative to the risk that they take.
Passive investors. On the other hand, believe that there is no way for you to beat the market.
And as a result of that, they simply invest in the market itself. So they buy the S&P 500. They buy the Dow Jones, they buy the footsie 100, so on and so forth. So there's your basic explanation of the difference versus active versus passive.
Now we're going to go into more detail.
So there are six major questions that any passive investor has to answer. And I've kind of broken this down in a way that I think should be simple enough for anybody to understand.
Step number one is figuring out what the time horizon is for your portfolio.
In other words, how long do you intend on holding the stocks or assets that you're holding in that portfolio?
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Step number two is identifying your asset class balance, which is how do you want to split the portfolio between stocks, bonds, real estate, and other asset classes.
Then you want to look at regional allocation, which is how you want to between domestic securities and foreign securities, what index that you want to use that will match the goals that you set in these previous steps, what broker you want to use. And then lastly, the investment vehicle of choice. So mainly that's coming down to whether or not you want to invest in a mutual fund or an exchange-traded fund, also known as an ETF.
So let's show an example here with Larry and how he decided all the various decisions that I just talked about.
So Larry decides that he wants to hold his portfolio for at least 10 years. I believe this is a goal that everybody's should set. Of course, this depends on your life circumstance. It mainly depends on your age for a lot of people, but I believe every person should be setting the goal of holding your portfolio for at least 10 years because you're going to see the best results. The longer that you hold your portfolio. You're also going to see a lot less volatility in return. The longer that you hold your portfolio for the second decision he decides to split between 80% stocks and 20% bonds.
So your asset allocation, which is a whole video in of itself, if we wanted to go into that topic, but very briefly the idea behind how you're going to split this up is going to be again, based on your age and your time horizon. So this is why you choose the time horizon first, because the time horizon is going to give you an idea of whether or not it's better to invest in riskier assets like stocks that can generate higher returns, but also higher losses or a less risky asset, like bonds that give lower returns, but have lower risks, the shorter your time horizon, the more you're going to want to invest in low-risk assets and the longer your time horizon, the more you want to invest, obviously in higher-risk assets for regional allocation, we're just going to keep things simple, a hundred percent in the real world.
Of course, you can split this, however, you like to, but I have found that in a lot of cases when you say that it's a hundred percent, US-based what that means is you're buying stocks off of the New York stock exchange, for example, and the companies that exist there, you know, they're getting 30 to 50% of their revenue overseas.
So you're never 100% US-based unless you 100% only buy stocks that get revenue from the US and that's very hard to do. You're going to struggle to even find enough companies to fill a portfolio that is of that nature. At least if you're investing in large-cap companies. So for the index choice, two very popular options, the S&P 500, we've mentioned this several times at this point, and then the Barclays U S aggregate, which is representative of bonds.
And then for an investment vehicle, ETFs are far simpler and usually have fewer rules in place than mutual funds. I think there are a lot easier to understand, and they're just a lot easier to get started with. So I believe that ETFs are far superior to mutual funds. Therefore, in this presentation, Larry prefers ETFs over mutual funds. Of course, if you want to use mutual funds, that's perfectly fine.
Okay. So here's, Larry's very basic investment cycle.
There are three main steps that he has one, he starts with opening an account and he deposits whatever his starting amount. In this case, we decided $10,000, but it could be any amount that you decide is good for you.
The second step is to purchase securities that are equal in the asset balance that he set in that previous screen.
So he wanted 80% stocks and 20% bonds. So in this case is going to buy $8,000 worth of an S&P 500 ETF. In this case, we're using the spider S&P 500, but there are tons of different S&P 500 ETFs, probably the best one is the ticker V O O tends to have the lowest expense ratio of all of them. This is the Vanguard ETF, but basically, any S&P 500 ETF will do the job. And then there's also Barclay's aggregate ETF, which is representative of bonds, which I know a lot of people don't like bond ETFs, but for the sake of this example, just kind of follow along with us.
And then in the third step here, any additional money that he has is going to be invested in such a way that keeps the portfolio in that 80 20% balance.
So let's say for example, that Larry here gets, another $5,000, six months later, but six months later, the stock has greatly outperformed the bonds. If that's the case, he's not going to buy 80% stock with the $5,000 and 20% bonds with the $5,000. He's going to invest in such a way that the total, the $15,000 that he has invested total works out to be 80, 20, uh, after profit. So you always want to try to keep this portfolio as balanced as possible towards the original asset allocation goal that you set in the previous screen.
So usually I don't encourage rebalancing, but if you don't have any additional investment money in a long period, then you might have to rebalance after say a year where you switch over to long-term gains, and it becomes easier to do that sort of rebalancing. But generally, I try to avoid rebalancing with existing money. You usually try to do that with new money. And so with two very simple trades, Larry here has a very diversified portfolio that is represented by over 500 stocks and over 10,000 bonds, two trades to achieve that effect.
This is the power of passive investing.
Once Larry has fully invested in these two different ETFs, he doesn't have to do anything anymore, literally nothing he can just watch as the portfolio grows in value over time. And he's done.
Now, here's some key differences that I wanted to note between an active and passive investor. So most active investors are going to have higher portfolio turnover, then a passive investor.
What a high portfolio turnover means is that they are buying and selling stocks within the portfolio fairly often.
And the reason that they're doing that is that they're trying to sell securities, that they have found became overpriced, which is what they want to have happened, right?
Your goal as an active investor is to buy securities that are under-priced and then sell them when they're overpriced, right buy low, sell high. That's the ideal. So what most active investors are going to do is they're going to try and achieve that goal with all of the securities in their portfolio or most of them. And that usually means a high asset turnover. Of course, there are different circumstances where active investors also, of course, sell at a loss when the circumstances behind why they may have invested in a company change, active investors are always trying to beat the market by allocating more capital to securities, they believe will outperform and less to those that they suspect won't.
This is sort of like to gambling. I want to be careful of course, of saying that, because this is different from gambling, fundamentally as research goes into this, a lot of discipline goes into this and a lot of time goes into this.
So it's not quite like gambling in the sense that, you know, it's carefree, but it is similar to gambling in the sense that you're trying to bet big when you think you can win and bet small when you don't think you can win, right?
That's what active investors are trying to do.
On the other hand, acknowledged the idea that it's not going to be possible to consistently beat the market. So because that's not possible or not consistently possible, they're going to focus on trying to always match the market. And of course, you can do that with a hundred percent success by just buying the market active investors believe that they can time the market.
In other words, they're going to maximize their exposure during the good times and minimize during the bad times, that's sort of what I just mentioned in terms of gambling. They're going to bet big when things look good to them, and they're going to bet small when things look bad to them. On the other hand, passive investors are always going to fully expose themselves to whatever the market is doing, because they don't believe that they can time the market. So that's a very key distinction between those two types of investors. So let's start looking at kind of the difference in terms of the number of assets that are invested in active versus passive.
For the first time in history, we've seen passive funds exceed active funds, and you can see that in this chart, on the right here.
You can see that the number of funds that were in passive ETFs and passive mutual funds, it was very small relative to active, active, completely dominated the market with over 80% market share. And now we're looking at roughly 50 50, there was a lot of criticism when we first saw that a mutual fund. But over time, people have accepted that average returns tend to be above average when compared to passive investing.
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So let's go ahead and explore that in a little bit more detail. This is looking at the asset-weighted 10 year annualized returns of active versus passive funds. So long story short here, just think of this as returns. And you can see across the board except for small growth, passive returns have exceeded active returns in every single category of stocks. So this is based on size right now. So we're looking at large stocks, middle-sized stocks, and small size stocks based on market cap. And we're also looking at different categories of stocks, different types of stocks, whether they appeal to value, which value stocks tend to be. They tend to be a little bit more stable. Although when we look at small value stocks, they're not the most stable companies in the world, we, if you look at a large value stock, usually have a fairly steady revenue trend. That's in the single-digit percents. Usually, you're not seeing huge fluctuations in margins. It's usually a company that has somewhat stagnated and because it has stagnated, it is not as exciting to investors anymore, which pushes its valuation down. On the other hand are stocks that are a lot more exciting to investors, right?
So like Netflix, for example, Tesla, these are companies that people discuss quite frequently. They have huge growth in revenue. They have huge growth in earnings. Most of the time, although usually, their profit margin is quite small or negative. In some cases, these are companies that are fundamentally different from value stocks. So that's why we kind of separate them into different categories. And then you have a blend, which is a combination of a value in a growth stock. Imagine it like a spectrum, you have the left, which would be growth stocks. You have the right, which would be value stocks, and right in the middle there, that would be a blend, right? And you can see across every single category, passive returns have beaten active returns.
Now, this is a nice little a geographic or a, you can, you can look at every country in the world. If you go to the link that I put down in the description, this is a report that was done by the standard. And Poor's, these are the guys that make the S&P 500. They found that almost across the board. If you compare large-cap mutual funds, these are actively managed mutual funds to indices that standard.
And Poor's have put together in this case, the S&P 500, they have underperformed across all periods, and it gets worse the further into time that you go. So for one year, you can see that 70% of actively managed mutual funds have underperformed the S&P 570%, again, underperformed over three years. But over a five year period that has gone up to 78.5%. In other words, only 21.5% of funds have outperformed the S&P 500 over five years. If you were looking at those compounded returns, so that should put some perspective there for you that when you go out and purchase an actively managed mutual fund, that is where you have professional managers trying to identify stocks that are undervalued and generate a return for you that is higher than the S&P 500. You're taking a one in five chance that you're successful. Those are not good odds, and it gets a little worse than that. So what this particular chart is showing you is that even the funds that are successful.
So let's say that, you know, you have a one in five chance of being successful, but let's say you believe that the mutual fund you want to invest in that is actively managed as a skillful manager, there, somebody that can identify stocks very quickly, that are undervalued, and they know when to sell them. And they're just, they're skilled. So even though they may be part of a 20% group, they're consistently in that 20% group, therefore for you, the chance of success is much higher. Well, as it turns out, that's not true. This here is called or it's data pulled from a scorecard that the S&P have put together standard reports has put together called the persistence scorecard. And what they have found is that the funds that outperform at any given time do not continue to outperform in subsequent years.
So what we're looking at here is these are the percentage of funds that were in the top half of performance in September of 2015. So that first bar shows one year later, what percentage of them remained in the top half? So approximately like 40 to 45% of funds that were in the top half during September 2015, we're still in the top half in September 2016, the next bar, after that represents September 2017, did they remain in the top half? And that goes down to now 20 to 25%. And you can see that each year as we move forward, the success rate goes down and down. And by the time we get to the bottom there, we're looking at roughly, I would say around 8% of funds that were in the top half in September 2015, remained in the top half, four years later in September 2019. So that goes against the argument that there is skill involved with active managers.
They're not able to consistently perform well, even the ones that are in the upper bracket.
So let's look at why active managers underperform.
There's one primary reason, and that is fees. It costs money to hire stock analysts. Portfolio managers promote the fund. This is called the 12 one B feed, a hire accountants purchases, requisite tools, for example, Bloomberg costs like $25,000 a year for a terminal or quote-unquote, 20,000 a year discounted. And that's probably gone up. That was a quoted price from like five years ago. So hopefully that puts into perspective here. These guys are dealing with a lot of additional fees that passive investors don't have to deal with because they're not out there trying to pick the best stocks. They don't have to do all this crazy research that you might see, like for example, a hedge fund does over time, we have seen the expense ratio, which has all of these costs combined. We've seen that go down for both active and passive investing. However, the spread between the two of them has remained quite large.
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So we're talking roughly like 0.5 to 0.7% difference between the two of them. And that may not sound like a lot, but if you compound that over several years, it becomes massive. Another thing that's worth noting is that again, we mentioned before that you might think, okay, there are skilled managers out there that kind of get past these statistics. What we found is that there is zero correlation between the managers that charge higher fees in higher gross return. So like, for example, if you're taking fees out of the equation altogether, what you'll find is that the managers that are charging a higher price for being part of their fund are not outperforming. Even if there are no fees involved.
They're not doing better, even though you're paying more for them. So don't think that just because a fund has a higher fee, that that means it's like a premium fund with more skilled investors than say another cheaper fund. That's not actually how it works based on the statistics. So what I wanted to go into, and this was like the main reason that I put this PowerPoint together is up until this point, I've given you every reason that passive investing is superior, but I wanted to give people that are active investors, a little bit of hope, because full disclosure here, I'm an active investor. So let's go into this in a little bit more detail.
Why am I an active investor, despite all this research that goes against, uh, it goes against it. So what you're looking at here is a comparison between index return net return and gross return or all those different categories that I explained earlier, the net return is factoring in the return of active funds after fees, the gross return is the return of those active funds without fees involved. And what you can see is across almost all of these categories here, the gross return is beating the index return.
What does this imply? This implies that there is some skill involved in active managers. They can outperform in a lot of cases. If you take fees out of the equation, however, you can't just ignore fees because fees are a huge reason why a lot of different investment strategies don't work. For example, you'll find that backtesting where backtesting is just where you take historical price data from the stock market and try to find strategies that worked historically. And what you'll find is that there's a lot of strategies that work until fees get involved, right?
There's a lot of trading. There's a lot of taxes that you would incur factors that, uh, you know, there's liquidity problems, et cetera. So you can't just ignore fees. But what the important takeaway is here is that active managers don't just suck at their jobs. They're getting hit by real-life things, such fees. So let's go into even more detail here. You can find that this is looking at risk-return, okay. Or return volatility ratio. So this is not just looking at absolute return any more. We're also factoring in risk. And what you can see is that yet again, if you include fees, we're underperforming the S&P 500, but if you don't include fees, active managers are beating the S&P 500 on a risk-adjusted basis as well. So not just raw return, but also risk if fees are not involved.
Another thing that was interesting that a lot of people posit is that because of this risk factor, active managers are supposed to be better during bear markets, right?
Like in other words, they're not going to perform well in bull markets because they're more hesitant than the market is because the market is always going to be market-weighted. And that sounds ridiculous, or that sounds very redundant, but it's true. So like the S&P 500, for example, is a market-weighted index, meaning that the higher, the value of a particular stock in the index, the higher, the percentage it is of the index. And it's not adjusting those downward when the value goes up, it's not trying to keep the percentages consistent.
So what that means is that during a bull market, certain sectors of the stock market are going to become very overpriced. For example, during the.com bubble, you saw technology stocks get extremely overvalued, and that would result in the S&P 500 being very skewed, right, or technology, in general, would be very skewed. So that would be an argument for active managers being able to avoid risk because they'd be able to see this and allocate less into those sectors, but that's not what happens. And as you can see here across time, this dotted line here represents the percentage of active funds or active managers that outperformed, uh, the S&P 500.
And you can see across the board here that it's kind of iffy in a lot of cases. They're underperforming, especially during bull markets back in the eighties and nineties, but they're also underperforming during bear markets, roughly half of the bear markets, they have underperformed.
So really this outperformance during bear markets is a myth. It only happened back in the 1980s, and we haven't seen it happen since the 1990s. And, a lot of the managers during let's say the.com bubble and the 2008 great recession, they didn't do well at all. Right. You can see them down at like the 40% and 30% region, uh, outperforming the S&P 500 way below the 50% Mark. So there's not a whole lot to suggest that active managers outperform during either bull or bear markets. There's no like they're avoiding risk. One thing I will say, though, is that there might be certain managers that avoid risk more than others, and this graph might be skewed by the fact that it's looking at averages. I will note that in there. This is another interesting little data that kind of looks the performance of active managers afterthe.com bubble.
So we're looking at the top quintile, that is the top 20% of actively managed funds and how they did from the.com bubble to the great recession. This is kind of going into that argument that I just mentioned a moment ago, which is that some managers have to be avoiding risk more often than others. So let's look at the top performers from the previous bear market going into the next bear market. In theory, if those managers were avoiding risk well during the.com bubble, they probably would avoid risk well during the great recession, right? Well, as you can see here, that's not the case. Only 23% of those funds remained in the top 20%. And you can see it's fairly well distributed between the second quintile to the third quintile, the fourth quintile, the fifth quintile, and liquidating.
It was just as likely for you to be in the first quintile. That is the top 20% as it was for you to be in the bottom 20%, going from the.com bubble to the great recession. So in other words, these managers that perform well during the.com bubble, they were not a safe bet during the great recession. And this is yet again, another thing that kind of suggests that skill is not necessarily a factor in a lot of cases. It's just luck for active managers to perform well during any given time horizon. And if you look at them over a long time horizon, they almost always fall under the average of passively investing. So this is looking at, uh, this was kind of looking at what I mentioned before in terms of whether or not managers that charge a higher fee are going to generate higher returns.
I'm trying to explain here that just because a manager charges more for their mutual fund, you're not going to necessarily get a higher gross return.
So in other words, these guys that charge more are not more skilled than the people that charge less. There's no correlation at all here.
However, as fees decrease, you can see a very positive correlation with net alpha here is just when you factor in fees. However, net alpha always remains negative. Meaning that when you invest in these actively managed funds when you're looking at fees, you're always going to have a negative alpha or be underperforming on a risk-adjusted basis. The main thing is you just need to focus on if you don't know what alpha is, you're underperforming gross. Alpha is still positive, though. I will note that across all of these different Quintiles, except for the third quintile for a grossed alpha, it's always a positive, alpha, not by much, but it is positive. Meaning it's outperforming passive investing. So with all this in mind, can retail investors beat the market?
Well, we've kind of highlighted throughout this video, the effect of fees. And you can look at this here to kind of see that if you think about returns as being normally distributed around an average, you basically would have half of the people outperforming. And half of the people underperforming, or in this case, funds half would be underperforming. Half would be outperforming, but because of fees, the normal distribution gets shifted to the left here, but the market return doesn't because it doesn't have fees. It's not, you don't have to pay any fees at all to invest in the market. It's very, very low, very close to 0%. And as a result of that, a larger than 50% of funds are underperforming the market. All right? So fees are a huge deal to make this very clear. However, there's one advantage that retail investors have over actively managed funds. And let's go over that right here. So when you compare a retail investor versus a professional investor, and a professional investor is defined as like a mutual fund manager, an institutional investor that has a lot of funds, a pension fund manager, et cetera, the guys that are working in these huge, huge portfolios, they don't have the liquidity that you do. So in other words, they can't just randomly say, okay, we're going to sell out of all of our Microsoft, because if they randomly just do a massive block trade selling out of Microsoft, number one, that could move the stock price. But Microsoft is huge. So let's say they can't, it still sends a signal to the market, right?
So it's very like they have to split their trades over several days. So if like some massive news headline comes out, retail investors tend to be able to move a lot quicker because you can sell or buy an entire position without moving or effecting or singling the market. So you have more liquidity as a retail investor, but the big thing here is that you don't have the fees that are involved with professional investors. I mentioned earlier that the biggest reason that professional investors have fees is that they have to be paid salaries. And these salaries is something you don't have to deal with. You don't have to pay yourself a salary for investing or doing research on stocks. Now, the trade-off here is that retail investors tend to be far less disciplined than professional investors. Usually, they're buying popular niche stocks, that they really haven't done that much research on, and they just kind of go with the flow.
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You know, they, they invest in marijuana stocks just because that's interesting, or they just invest in Tesla because it's interesting, you know, back when Facebook was popular, they invest in Facebook because it was the trend at the time, right? A lot of trend investing happens with retail investors and they usually end up hurting themselves by buying at the wrong times and selling at the wrong times. The other thing that hurts retail investors is that they tend not to have the same amount of knowledge that professional investors have. And what I mean by this as simply education and understanding of how the stock market works, uh, and also just experience most retail investors have not had as much exposure to what the market does daily that you might see a professional investor have. And also professional investors are surrounded by people who have been working in the field for 30, 40 years that can share their knowledge with the newer people.
Retail investors don't have that, right. Uh, they, they discuss among each other and maybe discuss on like Reddit or discord or, you know, various platforms that are less professional, but it's a lot of people discussing that don't know what they're talking about in a lot of cases, right? So usually on average, and that's what I want to know here. On average retail investors tend to be less knowledgeable than professional investors and the last disadvantage, and this is a pretty big one that retail investors have is tools.
There's a lot of great tools that are available online, but none of them compare to Bloomberg Fact Set, uh, icon, et cetera. So you have a huge advantage or a huge disadvantage in information for a retail investor. But the two main things are that you kill professional investors on fees and liquidity. And the really big thing is the fees. So revisiting this idea, can retail investors beat the market?
Well, what's kind of interesting about this is that we've shown research up until this point that active managers can outperform the market when fees are not involved. So if you look at a retail investor, if they had the same level of knowledge as a standard active manager, if they had access to similar tools and had similar discipline, in theory, a small subset of retail investors can outperform the market with skill. And the fun part about this, and this is the part I love is that we cannot reliably study retail investors empirically, especially knowledgeable retail investors due to a lack of data.
I love the fact that it's hard to study this stuff empirically because what that says is that you have to come to your conclusion. And of course, in a lot of cases, that means you're going to come to the conclusion that's convenient for you. And that's kind of what I've done here. I believe that there is a small subset of retail investors that can beat the market. And those small subsets of retail investors is discipline.
They have a lot of education and they have access to tools that maybe other retail investors just don't, or they've put in the time, at least to find some things on the internet that may be a lot of people haven't found that is useful for them. That's a tool advantage that they have over other retail investors that kind of closes the gap between what we use with like Yahoo finance versus Bloomberg. So in my opinion, yes, a very small subset of retail investors can beat the market, but it is very small. It is an extremely small subset. And the main reason that they can outperform is that they don't have fees to deal with.
So concluding this here, let's go over the pros and cons of passive versus active investing, or more I should say, well, let's look at the pros of both because by doing that, you'll understand the cons of the other one.
So passive investing always matches the market return, which has been very generous since the great recession. And even if you look at over the long run, the market return is very generous. It's also very simple. Passive investing can be done by literally anybody you could not have even graduated from high school, have no idea how anything in finance works and you would be able to do passive investing. It's very simple to do you just set up an account, throw your money into the account by the S&P 500 boom did, right? That's passive investing.
And there's also a lot of empirical studies to show that passive returns exceed active returns, which is well a great reason to go with passive overactive. On the other hand, active,can make people feel very comfortable compared to passive into some massive fluctuations, right?
Particularly back earlier in 2020, we had several days in a row where the market would go down eight to 10%, right?
These huge movements in the market, if you're just blindly investing in the market, that can make you feel very uncomfortable because you don't know when that rollercoaster ride is going to end.
And passive investing says, you always have to stay on that roller coaster. There's no reason to ever get off of it and then get back onto it. You can't do that. That's part of the rules of passive investing that can feel very uncomfortable. So it's basically, you have a lot more control over the portfolio, which is the point number two here, which then gives you comfort in a lot of cases.
And then, of course, the third thing here is that active investing has a lot of potentials.
Obviously, passive investors can never exceed market returns because they always get market returns, active investors can exceed the market returns, but they can also underperform, which makes it more exciting, but also of course makes it riskier.
And on average, based on empirical studies, you're usually going to end up on the lower end of that spectrum than the upper end of that spectrum. In other words, usually going to underperform, not outperform. So that's a huge reason not to actively invest, to conclude this all out. Investing is a mental battlefield. I mentioned earlier in this video that I'm an active investor, but I always suggest to any new investors and anybody that I talk to that they should passively invest. Because as I mentioned is very simple, it is empirically better, and it's, it's really easy to follow it can be uncomfortable to passively invest. That is like the biggest downside of it though.
So if you're unable to deal with the discomfort that you get from passive investing, an active investing suits you, you better just make sure that you minimize your risk when active investing, the biggest pitfall that most people fall into is they just simply do not manage risk.
Well, when they actively invest and they end up with having 30, 40% of their portfolio be in a stock like cannabis growth, which should be a long bet stock that should not be a stock that represents 30 to 40% of your portfolio most of the time. I would say almost all of the time, that should be the case of active investing.
Doesn't give you an excuse to take on extremely large risk, because, at that point, you're moving over into the world of gambling.
So try to note what works best for you and what controls your risk, the best and controls your mental state, the best, and that method of investing is going to be best for you.
I hope it was educational. I hope that you found some new information from it and you deem some insight that is valuable for you. And I will see you next time.