Glossary

Passive investing is an investment strategy that aims to replicate the performance of a market index or benchmark rather than actively selecting individual securities to outperform the market.

This approach involves minimal trading, lower costs, and reduced risk, as it eliminates the need for constant market monitoring and decision-making. Passive investors typically invest in index funds or exchange-traded funds (ETFs) that track a specific market index. 📊🛠️

For example, an investor who wants to invest passively in the U.S. stock market might choose an S&P 500 index fund or ETF, which replicates the performance of the S&P 500 Index.

Fun fact: Passive investing gained popularity in the 1970s, following the introduction of the first index fund by John C. Bogle, the founder of the Vanguard Group. Today, the Vanguard Group is one of the largest investment management companies in the world, managing trillions of dollars in assets. 💼