Finance Dave
Thinks s/he gets paid by the post
- Joined
- Mar 29, 2007
- Messages
- 1,884
I think it's what the movement of funds is based on that determines whether it's active or passive. If it's based on appreciation of a particular asset class, then it's rebalancing and not active investing. If it's based on a hot stock tip, then it's active.I haven't been able to find threads on this topic.
Do people go all-passive for their investing? (i.e., index funds only, as opposed to active funds & individual stock/bond picking). Would it be considered diversification to utilize both indexing and active management? i.e. hedging the bet against which is the "best" by utilizing both? And then to what extent should each be used (80/20 for example).
Here's an article about the massive shift out of active funds and into passive funds
http://www.investmentnews.com/article/20120122/REG/301229986
Also it occurs to me that selecting asset allocation, choosing when to deposit money, and when to shift money around between accounts is active investing even if all the accounts are index funds.
Maybe I'm thinking about things the wrong way?
I am a passive investor. I can see that in rehirement, I may take 10% of my portfolio and actively manage it...but that's about it.