What is the main goal of investing actively in financial markets?

The primary goal of actively investing in financial markets is to outperform the market. Active investing involves making specific investment decisions based on research, analysis, and market conditions, with the objective of achieving returns that exceed the performance of a benchmark index, such as the S&P 500. Investors who adopt an active strategy believe that their insights, expertise, or timing can help them achieve greater returns compared to simply holding a diversified portfolio that tracks the market.

This approach often involves a variety of techniques, such as analyzing market trends, individual stock performance, or economic indicators to make strategic buy or sell decisions. Conversely, passive investing focuses on matching market returns rather than striving to exceed them. Therefore, outperforming the market is not just a target for active investors but is fundamental to their investment philosophy and ongoing decision-making process.