Active and Passive Investments ! 


Table of Contents

* Active Investment
* Passive Investment
  • Graham, who is considered the founder of value investing, advised that investors know their investments. To make it clear, they made a clear difference between the different groups active in the stock market. Graham referred to active and passive investors as "entrepreneur investors" and "defensive investors".
You only have two real choices: 

The first choice is to make a serious commitment in time and energy to become a good investor who equals the quality and quantity of research of hands with the expected return.

If this is not your choice then be satisfied to get inactive (possibly less) returns, but with very little time and work.                                                                                                                                                                                                                                                                                                            Graham changed the academic notion of "risk = return" on his head, and instead made it "work = return". The more you do in your investment, the higher your return.


Active investment, as its name implies, takes hands-on approach and requires that someone be in the role of portfolio managers.

 The aim of active fund management is to beat the average return of the stock market and to take full advantage of short-term fluctuations.

It involves a very deep analysis and expertise to learn about a particular stock (stock), bond, or spindle in any asset.                                                                                                                                                                                                                                                                                                     A portfolio manager usually oversees a team of analysts who look at qualitative and quantitative factors and determine from where and when the price will change.

Faith is required for active investment that anyone who is investing in the portfolio will know the exact time to buy or sell. Successful investment management needs to be correct more often than inaccuracy.


If you are an idle investor, then you invest for the long haul.

Inactive investors limit the amount of buying and selling within their portfolio, which is a very effective way of investing.

Strategy requires shopping and hold mentality. This means that the temptation to guess or anticipate every next step in the stock market.

The main example of an inactive approach is to buy an index fund which invests in major indices like Sensex or Nifty.

Whenever these indices switch their components, the index funds which follow them, automatically switch off their holdings and buy their stocks and hold their holdings by becoming a part of the stock.

That's why this is a big deal when a company becomes large enough to be included in a large index: It guarantees that the stock will become a major holding in thousands of major funds.


  • Active investment requires hands-on approach, usually by a portfolio manager or other so-called active participants.                                                                                                                       
  • Inactive investment involves less buying and selling, and often buys investors funds such as index funds or other mutual funds.                                                                                                        
  • Both styles of investment are beneficial, but passive investment is more popular in terms of the amount of money invested. In addition, at least at the superficial level, inactive investments have historically earned more money.                                                                                                  
  • In the upheaval of the current 2019 market, active investment has become more popular over the years, though the passive is still a big market.

   thanks for the time ! 

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