“Active investing can make sense when there is a need to manage a very specific risk, challenge, or opportunity,” he explains. Index funds, such as low-cost ETFs or passively managed mutual funds, are affordable investment vehicles with lower management fees and reduced trading activity. Moreover, passive funds tend to be cheaper since they don’t require nearly as much maintenance or research as active funds do. While many retail brokers offer free trades these days, there are still costs to consider. For example, day traders need to meet the FINRA minimums for account collateral. And, of course, each profitable trade is a taxable event, which can add up.