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  1. I am definitely a passive investor. Originally not by choice, but because I didnt know enough about investing to be an active investor. But now that I have read your post and understand the difference, I will remain a passive investor beacuse of the things you shared and because it has always worked well for me. Thanks for the great post! I will be checking back often!

    • That’s the funny thing. Active managers rarely beat the market on a consistent basis, yet so many people still invest in those funds. My guess is because most investors simply look at the return of the fund in question and not the index, or just read an article about a ‘hot’ stock and buy in because it is ‘hot’.
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  2. I learned this the hard way. I was with an advisor who preached active management, and in a 2 year period, I didn’t really see any benefits. I have since changed advisors and the passive approach seems to be a better long term strategy.

    • When I first began investing, I bought into the active management style myself. I think most of us do since it’s so glamorous to think we can earn a higher return. Sadly, it rarely turns out that way.

  3. Who needs sexy!?!? I’ll take the returns… I once ran the numbers and if it takes you 4 hours per week to beat the market by 2% (not easily accomplished) on a 50,000 portfolio then you’re making less than $5 per hour for your time (before taxes!).

    I’ll take passive investing for the vast majority of my $$. I have a few bucks that I play with but just a few and money I’m fully prepared to lose.
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  4. I like passive investing because active management can’t beat passive consistently anyway. Most of my mutual funds and ETFs are passive index. My dividend portfolio are comprised of individual stocks and I’m mostly inactive there as well.

  5. I keep my active investing for my small business endeavors I work on, not the stock market.

    I’ve been a passive investor but I’ve been trying to get a more concrete understanding of why you want a bond/stock ETF mix if you’re not touching the account for decades. Most research just comes up with “it helps stabilize your investments” but isn’t that only relevant if you’re touching the money within the next 10 years? I’ve also heard an idea about when you re-balance the mix you are essentially buying low and sell high over time.
    Any Thoughts?

  6. I always like to do a little bit of both (active vs passive). Keep the index funds in the ROTH IRA/401k and have some dividend stocks in the taxable brokerage. I’d agree that the way to go for the absolute long term is finding the lowest expense ratio funds you could find and ‘set-it and forget’.
    Rich
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