passive investing

Summary List Placement

If you can’t beat ’em, join ’em. 

That, in a nutshell, is the mantra of passive investing. This popular investment strategy doesn’t try to outperform or “time” the stock market with a constant stream of trades, as other strategies do. Instead, passive investing believes the secret to boosting returns is by doing as little buying and selling as possible. 

Passive investing, also known as passive management, may be laissez-faire, but it’s not lazy. Its thoughtful, time-honored philosophy holds that, while the stock market does experience drops and bumps, it inevitably rises over the long hauls. 

So, rather than try to outsmart it, the best course is to mirror the market in your portfolio — usually with investments based on indexes of stocks — and then sit back and enjoy the ride. 

Simple to understand and easy to execute, passive investing has become the go-to approach for many investors. Here’s how to join them.

What is passive investing?

The essence of passive investing is a buy-and-hold strategy, a long-term approach in which investors don’t trade much. Instead, they purchase and then hang onto a diversified portfolio of assets — usually based on a broad, market-weighted index, like the S&P 500 or the …read more


Source:: Businessinsider – Finance

      

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