This approach offers higher potential returns but also carries higher risk. Investors must conduct thorough research and analysis to identify promising stocks. Active management is crucial, as investors need to monitor their portfolio and make timely buy and sell decisions.

Exchange-traded funds (ETFs) are investment funds traded on stock exchanges. They pool money from investors to buy a basket of securities, such as stocks, bonds, or commodities. ETFs offer diversification, liquidity, and often lower costs than traditional mutual funds. They're designed to track a specific index or asset class, making them a popular choice for investors seeking a passive investment approach.  ETFs are suitable for investors seeking a passive investment approach and those who want to invest in a specific market segment or theme.