Higher quality names offer better liquidity and higher sale prices, but the market is more efficient in pricing them - so margins are tighter and returns are lower.
Cheaper domains (such as hand-registrations, unexplored niches and alternate extensions) will give you less stability and more risk, but there are bigger margins and greater inefficiencies in valuations.
I found it easier to start my investing journey with a focus towards the latter, as I had less money at the beginning and could compound faster.
But I quickly realised that I didn't want to pursue scale ... so I've been slowly moving capital (over the years) towards fewer, better names.
There's no single perfect way to play this game - every choice, every strategy, every domain - each has its own upsides and downsides. You've just got to find what works for you.