Understanding The Difference Between Active And Passive Investing 1

Understanding The Difference Between Active And Passive Investing 1

December 23, 2022

You may have heard discussions about active or passive investing. Investors tend to align themselves with one strategy or the other, often finding themselves at opposing ends of the investment spectrum.

So, what’s the difference, and why is it so contentious? Let’s dive in.

Passive investing has gained popularity due to its low-cost simplicity. This strategy involves replicating the performance of a broader market index, such as the S&P 500. Active investing requires a hands-on approach, typically involving a portfolio manager who aims to outperform specific benchmarks, such as the S&P 500.

Both strategies have their merits, and it’s essential to delve deeper into their nuances. By doing so, you can better understand the advantages and drawbacks associated with each approach. This knowledge will empower you to make informed investment decisions aligned with your goals.

If you would like to learn more about active and passive investing, I would be happy to provide additional information. Feel free to reach out to me at your convenience.

J. P. Hamlett, Sr., CEO
(213) 765-0899
Retirement Choices of California
Bridging Your Retirement Gap