Active investing involves choosing individual stocks or assets with the goal of outperforming the market. For example, if you invest $10,000 in a mix of stocks and generate a return of 12%, your investment would grow to $11,200. However, active investing can come with higher costs due to management fees and requires more time and research. On the other hand, passive investing typically involves buying index funds or ETFs that track a market index. This means if you invest the same $10,000 in an S&P 500 index fund that tracks the market return of around 10%, after one year, it would grow to $11,000. While the returns may be lower than successful active strategies, passive investing tends to have lower fees and requires less hands-on management.

Active investing is a strategy where investors buy and sell assets with the hope of outperforming the market. It requires a hands-on approach and often incurs higher fees. Passive investing, conversely, is a strategy that aims to replicate the performance of a market index. It typically involves less trading, lower fees, and is generally considered to be a more straightforward and less risky approach.