Passive Investments are the meal. Active Investments are the condiment.
“Is all active investment the wrong way to invest?”
No, not wrong, just not necessary to build meaningful wealth. Its a worthwhile and ongoing debate.
Passive investing has built fortunes. To be fair and realistic, so has active investing, but active management requires more frequent trading, sometimes very often, too often, and it also necessarily increases the risk profile of a portfolio.
The trading activity often becomes an end unto itself when the real focus should be sure, steady wealth building instead of trying to beat or outsmart the market to capture gains.
However, there are times when active trades meet the objective, for instance a position in a special opportunity stock where the story and outlook are so compelling that a small piece of the portfolio–a condiment, if you will–can be taken. As with all investments, its “proceed with care and caution,” know what you are looking for from that special opportunity, and done only with realistic expectations, in the context of an objectives-based allocation plan.
Pass the ketchup, please!