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Investing Active vs. Passive - Coggle Diagram
Investing Active vs. Passive
Active
Monitoring Prices of positions
Out-perfoming benchmarks/Alpha Return
Investor Irrationality
Inefficient Market
Higher fees
Passive
Buy positions as soon as they have the money to do so.
Diversifying/Mimic Benchmark
Efficient Market Hypothesis
Intrinsic Value
Lower Fees
Money on the Line
Watch Biases
Lower your fees
Diversify
Focus on the long term
Both Active and Passive Traits
Invest Your Income
DO IT
Understand what you invest in
Always use an investment teacher
Mutual Funds
Outperform the market./SMP500
Get a decent portfolio
Don't jump in and out of the market based on what's going on. Don't chase returns.
Long Track Record
Growth
Midcap fund/SMP500/Middle Ground/ Does what the market does
Growth and Income
Large Capitalization Fund/Blue Chip
Most stable/ Boring/ Large companies/Goes slow
Aggressive Growth
Small cap/ Crazier mix/ Will move faster than the market/Merging Market
International
Global Fund
Works better than International funds
International companies
Index Funds
Mirror the market