In this article, you will find web resources on passive investing particularly tailored towards individuals who invest over a long period of years, particularly in low-cost index funds that are promoted by the likes of Warren Buffett, who invest in the stock market, and Tony Robbins, author of two financial books called Unshakeable and Money Master The Game, where he advises on investing in the stock market.
If you are an individual who likes to invest long-term or wants to start investing in the stock market or indexes, passive investing may be the way forward.
The term “passive investing” means that you put your money in stocks, and you invest in the long-term prosperity of a company.
You do not buy stock and immediately sell it the moment the company’s value increases on the stock market.
The goal of a passive investor is to invest in an index fund or a company and watch the value of the company compound over the years.
Blogleheads is a community dedicated to investing in index funds and investments focused on the long-term goal of success by holding assets for years and not trying to beat the market.
Put simply, a passive investor does hold their investment even when the market is facing a downturn or a bear market.
A passive investor just holds their stocks for years. Passive investors invest in index funds like the S&P 500 index because index funds tend to return a 10% increase in investment year on year.
This is in contrast to mutual funds over riskier investments.
Using low-cost index funds, you are almost guaranteed a return of your original investment year on year, unlike mutual funds when you could receive a 20% return in one year and then a downturn in the preceding years.
With indexes, you are almost guaranteed a return of 10% year on year.
If you are interested in index funds, I strongly recommend reading Tony Robinson’s unshakeable and following the advice of Warren Buffett.
Mr. Buffett has made arrangements for when he dies to place his fortune in low-cost index funds due to them being much safer and more reliable than other kinds of investments.
Investing in index funds does not require the same effort as trying to find the next Apple or General Motors.
The Arithmetic of Active Management
The web article is by William Sharp, who explains why active investing can never truly be successful. I would disagree with this to a small extent because short-term investing can be successful primarily in the short term because of the fluctuation in the stock market prices.
But ultimately, index funds and spraying out your investments is a wiser and safer strategy.
The Vanguard Group- American Registered Investment Advisor
The Vanguard Group, Inc. is an American registered investment advisor based in Malvern, Pennsylvania, with about $7 trillion in global assets under management, as of January 13, 2021.
It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds worldwide after BlackRock’s iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, variable and fixed annuities, educational account services, financial planning, asset management, and trust services.
Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management.
Along with BlackRock and State Street, Vanguard is considered one of the Big Three index fund managers that dominate corporate America.