Passive Investing
Passive investing aims to match the performance of a market rather than beat it.
1 min read Learning to Invest
What it means
Passive investing aims to match the performance of a market rather than beat it. This is usually done using low-cost index funds or ETFs that track an index automatically.
Example
You invest in a global index fund that follows thousands of companies instead of trying to pick future winners.
Why it matters
Passive investing is popular because it's simple, diversified and typically low cost.
Passive investing doesn't avoid market falls; it simply accepts market returns.
Is passive investing the same as doing nothing?
No. You still choose your investments and decide how much to invest; you're just not trying to outperform the market.