Selasa, 14 Maret 2017

Active vs Passive Investing: Which to Choose?

Finally, I found an article that isn't so biased against actively managed funds. According to Kiplinger's Personal Finance, "The smart way to invest is to own both index funds and low-fee, actively managed funds." This is a theoretical question with which we regularly have good discussions here in the office (for example, have you ever asked, "Does passive management even exist?" Choosing an index to track, for example, is in and of itself an active step that a mutual fund or ETF provider must take). Our position is similar to the one in the article: We believe in active and passive management. "In fact, said Ben Johnson of Morningstar, that’s how most Americans invest their money." This adds an additional layer of diversification in terms of general method, adds another layer of manager theory and style diversification, and it helps manage volatility because active managers can employ strategies that help reduce the volatility that might be experienced with a purely passive investment strategy. For more on active vs passive investing, and to see which funds Kiplinger recommends, you can read more at richmond.com.

Article Source right here: Active vs Passive Investing: Which to Choose?

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