Is a “passive investor” the same as a “passive investment”?
My understanding is that ETFs choose stocks in a particular segment and are “passive” in the sense that they choose from all the stocks in the segment without using some kind of logical discretion. As a result “up and coming” growing companies are chosen as well as the decaying losers. Over time, this activity “rewards” the losers with investments in their shares just as much as the winners. I would call that a “passive investment” although maybe there is better terminology that I’m not aware of. I would hope that a stock-picking mutual fund or an individual stock investor doesn’t do that — I wouldn’t.
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