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What is the difference between active and passive investing?
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The primary difference between active and passive investing is the involvement of the investor. In active investing, the investor plays an active role in deciding what investments to make and how to maximize returns. They will typically research and analyze individual stocks to determine which ones to invest in. In passive investing, the investor does not make active stock selection decisions. Instead, they will generally invest in a portfolio that follows a pre-defined index or set of criteria and the returns will follow the market.