Active and Passive Investing

There are 2 types of Investing.

Passive Investing and Active Investing. One requires frequent time and effort in seeking opportunity, while the other requires less frequent time and effort.

Passive Investing could be thought of as a stock account that pays high interest (dividends). You add the stock, and passively it grows. Hopefully, You can look back in 10 years and find that constant addition made you a nice growing wealth. However, it can be very disheartening, instead of growing wealth, you are staring at diminishing wealth and made you feel poorer.

Passive investor can be thought as a farmer planting Winter crops and waiting for Spring to come, and when crops are ripe, he may harvest them. However, even the corps are ripe, he may feel that the crops can grow further.

Active Investing can be thought of as something that needs your attention. More attention, the more likely the interest (nett profit and dividends) you receive. Yes a high yielding stock account needs your attention when adding stock, so require more time and effort from you. Maybe more mental and emotional stress.

Active investor can be thought as a farmer planting crops round the seasons, sometime the harvest come really quick and good, at times, he may accidentally plant a Winter crop, and too bad he will have to wait for Spring, and hopefully Robins will come. The biggest advantage is that he don't need to wait for 10 years to realize he is going to be poorer and farming is not his cup of tea, when the seeds are gone. He may next try be a fisherman and become Kelong owner. Life of a Kelong owner is simple, he just need to be very patient, indeed lots of patience, and wait for high tide; and hopefully the fish will come.

Active investor is often mistaken as trader. Trader is not a farmer, he is a hunter. He will shoot any weak animal that crosses his path, and he will run quickly when pounded by a Tiger.