Passive vs Active Management
Passive management in this sense generally refers to buying low cost index funds rather than paying a manager to make changes.
Part of the popularity that index funds have achieved is due to the thinking that active managers, in addition to imposing a management fee, have had difficulty out performing index funds even without the fee.
It seems reasonable that this would be true if you consider that at any given moment there are millions of eyes viewing every investment, billions of dollars that can be moved in or out, and tremendous access to the multitude of brilliant analysts who study these investments. Why would any individual no matter how bright or knowledgeable think that they could have any advantage?
Long Term Thinking — traders vs investors
Traders are those who believe they can profit by the timing of purchases and sales. The requirement is to “buy low sell high” or “buy high and sell higher” or “sell short and cover lower” etc. If you agree with the “millions of eyes and billions of dollars” argument, then you don’t want to be a trader.
The alternative is to be an investor. An investor buys with the intention of owning what they believe will be an investment that will generate good returns over a lengthy period of time.