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Passive Investing

Passive Investing is an investment strategy where an investor uses index funds vs. specifically selected assets. A passive investor believes that one cannot beat “the market” via Active Investing, the opposite of Passive Investing. Strategic Asset Allocation uses passive management to reduce Un-systemic Risk.

My Take

Reputable research suggests that after fees, costs, and taxes are accounted for, it’s very hard to beat an index—meaning any extra value a portfolio manager brings to the equation is offset by those costs.

References

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Asset Allocation

Asset Allocation

Active Investing