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Active Investing

Summary

Active investing is an investment strategy that involves ongoing buying and selling activities in an effort to outperform a specific benchmark or index.

Detailed Description

Active investing contrasts with passive investing, where investors buy and hold a diversified portfolio with little to no trading. Active investors utilize various strategies and techniques, such as market research and fundamental analysis, to identify opportunities and adjust their portfolios accordingly. The goal is to capitalize on short-term market fluctuations and dynamics, aiming for higher returns than a passive investment could provide. This can be applied across various asset categories, including equities, fixed income, and cryptocurrencies.

Category
Investment Strategies
Synonyms
Tactical Asset Allocation
Hands-On Investing
Active Management

Impact Details

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Hedge Fund Management

Hedge funds typically employ active investing strategies to seek higher returns for their investors by tactically adjusting their portfolios based on market conditions.

Industries:

Finance
Investment Banking

Platforms:

Bloomberg
FactSet
Day Trading

Day traders engage in active investing by making multiple trades within a single day in order to capitalize on short-term price movements.

Industries:

Finance
Investment

Platforms:

Interactive Brokers
E*TRADE
Growth Investing

Active investors may focus on companies expected to grow at an above-average rate compared to their industry or the overall market, often requiring frequent evaluation of their growth potential.

Industries:

Technology
Biotechnology

Platforms:

Charles Schwab
Robinhood

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