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Investing: Passive Funds vs Active Stock Picking?
Core Conflict: Funds are stress-free and risk-managed but boring/average returns; Stocks offer high upside (and downside) and fun but require skill and nerves.
Decision Criteria
5
Expected Return
Market average vs. Alpha
5
Volatility
Max drawdown
5
Time & Effort
Set & Forget vs. Watching ticker
4
Knowledge Bar
Newbie friendly vs. Technical/Fundamental analysis
5
Psychology
HODL vs. FOMO/Panic selling
3
Fees
Management fees vs. Trading commissions
3
Liquidity
Settlement time
2
Ego
Passenger vs. Driver
2
Min. Investment
Low limits vs. Minimum lot size
4
Info Asymmetry
Disadvantage against institutions
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