Kavan Choksi Explores Investing Styles: Active Vs Passive

Before diving into the world of stock market investments, Kavan Choksi emphasizes the importance of acquiring a fundamental understanding of the correct approach. There's no universal solution, as each individual's investing journey is unique. 

It's crucial to identify an investing style that resonates with you and aligns with your financial goals and risk tolerance. Remember, taking the time to explore various strategies and finding what suits your preferences can significantly impact your investment success in the long run.

Your style

There are two major camps when it comes to investing money: active investing and passive investing. Both can be excellent ways to build wealth as long as you aren't just looking for short-term gains. But your budget, risk tolerance, lifestyle, and interests might help determine your preference.

Active investing

Active investing means taking time to research assets and constructing your portfolio on your own. In simple terms, if you plan to actively trade individual stocks through an online broker, you prefer active investing. To be a successful active investor, you'll need three things: time, knowledge, and desire.

It's also essential to understand what we don't mean by active investing. Kavan Choksi says active investing doesn't mean day trading, buying and selling stocks frequently, or buying stocks you think will go parabolic over the next few weeks.

Passive investing

On the other hand, passive investing is like an airplane on autopilot, explains Kavan Choksi. Your portfolio will be profitable in the long run, and it requires far less effort.

In a nutshell, passive investing means putting your money to work in investment vehicles where someone else does the hard work. Mutual and exchange-traded fund investing is a good example of this strategy. Or you can use a hybrid approach. For instance, you can hire an investment advisor to build and implement an investment strategy on your behalf, adds Kavan Choksi.