Hello everybody, investing is a very broad topic. Investing is a great way to save up for those big things in life like your kids, education, the house of your dreams, and of course your retirement. There is an extensive range of markets to invest in such as stock market or crypto market. There are two main ways for you to invest - active investing and passive investing. This is a crucial thing to decide when it comes to your portfolio strategy is whether you want to be an active investor or a passive investor. Today I would like to compare these two types of investing. In both cases, I will refer to the crypto market.

Passive Investing

This is the type of investing where you choose to buy and hold. As a passive investor don’t want to be spending all your time doing regular trading
because you have other things to do and investing is just a hobby for you. You are not going to be looking at the daily price analysis as a passive investor, you only look at the chart from time to time. You just buy crypto hold it for a long period of time and then you sell after few years for example. You are only concerned about the fundamentals of your crypto investment. The disadvantage of passive investing is that you have a small potential return on investment compared to active investing. Sometimes your passive investment strategy might do better than active investing because it depends on how you select your investments, but in general, you have a smaller potential here. It is worth mentioning that passive investing is much safer than active investing.

Active Investing

If you are an active investor, you naturally want to make returns that are better than the market average, otherwise what is the point of investing actively? This type of investing requires the investor to constantly manage and research cryptocurrency and its performance in order to determine when to buy and when to sell. You have to actively analyze and look at the crypto market to determine which cryptocurrencies are doing or not doing well. One of the benefits of active cryptocurrency investing is that it takes advantage of the fluctuation in the crypto market. Active investing has very many disadvantages. Yes, you can make money doing this, but it is not reliable for everyone. To be a day trader and make consistent profits you need to have a great proven strategy. And on top of that, you are spending on every trade you make, so there is a secondary way you are losing capital. Active investing requires you to do a lot of research and it is way more riskier, but as we all know, the bigger the risk is, the bigger the reward you can get.

Which Is Better?

If you are an average investor, who does not have time to analyze crypto every day and has a normal job and overall you treat investing as a hobby,
the best thing for you is to invest passively. However, if you have a lot of time and you found a great strategy that you have tested and had a lot of patience, then there is a good chance that you stumble across some very great investments that net you a huge return over time. The returns will be far greater, but remember that it goes with higher risk.

And what type of investor are you?. Let me know in the comments below :)

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Hope you found today’s article helpful. If you want to learn more about trading follow me at @Fizz-on-my-Jayce. Have a nice day :)