Simon's "1 Minute Money Message" (Episode 9): What Is The Difference Between Passive And Active Investing?

Welcome to Episode 9 of "One Minute Money Message" where Simon will outline Simple Ideas to Grow, Protect and Manage Your Wealth.

So what is the difference between passive investing and active investing?

Imagine investing is like picking stocks.

Passive investing is like buying a whole basket of stocks at once, aiming to match the overall market performance. It's like betting on the whole market, not individual stocks.

So an example is the Vanguard Australian Shares Index ETF or exchange traded fund that tracks the the S&P ASX 300 or the largest 300 stocks in Australia.

Active investing is like picking individual stocks trying to outperform the market. It's like betting on specific winners.

So an example would be the Fidelity Australian Equities Fund, which typically holds around 30 to 50 of its preferred Australian companies.

So passive investing is generally cheaper and often performs better over the long term, while active investing is riskier but potentially offers higher returns.

Just a reminder that these are not investment recommendations, just examples.

Please feel free to book a call on the website button, and I'll be happy to discuss building your own customised portfolio.

Thanks for watching!

Simon

p.s/ - If you'd like to check out Episode 1 of "1 Minute Money Message" click here!

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