Active investing is an investment strategy where individuals or fund managers make specific investment decisions to outperform a benchmark index, such as the S&P 500. This approach involves frequent buying and selling of assets based on research, market trends, and economic indicators. Active investors aim to capitalize on short-term price movements and market inefficiencies. In contrast to passive investing, which involves holding a diversified portfolio for the long term, active investing requires ongoing analysis and adjustments. This strategy can lead to higher potential returns but also comes with increased risks and costs, such as management fees and transaction costs.