This guide introduces you to the concept of active and passive investing. Both approaches offer value to investors. However, they generate intense debates among their supporters. The main argument is whether active funds produce the long-term returns required to justify the additional risk and higher costs.
It is generally accepted that asset allocation has the biggest impact on the variability of returns within an investment portfolio. However, even after establishing your asset allocation, an important decision remains. Which investment style should you adopt when investing in each asset class? You can choose between two styles: active and passive.
- The components of risk
- What is passive investing
- What is active investing
- The efficient market hypothesis
- Choosing the right style