Passive Investing is an investment strategy that involves holding a diversified portfolio of securities and seeking to match, rather than outperform, the market. Passive investors typically aim to achieve long-term returns by holding a broad basket of securities and minimizing trading costs, rather than trying to pick individual stocks or actively manage their portfolio.Passive investing is often contrasted with active investing, which involves trying to outperform the market by selecting individual securities or making trades based on the investor's view of the market. Passive investors, on the other hand, typically seek to achieve returns that are similar to the overall market by holding a diversified portfolio of securities that represents the market as a whole.There are several approaches to passive investing, including index investing and passive fund management. Index investing involves investing in a fund that tracks the performance of a particular market index, such as the S&P 500 or the Dow Jones Industrial Average. Passive fund management involves investing in a fund that is managed by a professional investment manager who follows a predetermined investment strategy, such as buying and holding a diversified portfolio of securities.Passive investing can be a suitable strategy for investors who are looking to achieve long-term returns and are willing to accept market risk. It can also be a less time-consuming and less expensive approach to investing compared to active investing, as it does not require the investor to constantly monitor and trade their portfolio.
