3 Important Shortcomings You Should Know About Passive Investing

“Passive” investing removes human hunches from the process of what to buy and sell. Essentially, in a passive fund such as a passive Exchange Traded Fund (ETF), the portfolio manager follows a blueprint, such as an existing index, and does not actively manage the portfolio. However, if passive investing sounds like a simple, cost effective and easy way to protect and build wealth, why doesn’t everyone invest this way? The following article highlights 3 important ETF shortcomings all investors should be aware of.

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Top-Down vs. Bottom-Up Investing: What Provides Better Returns?

Two of the most common investment analysis strategies are top-down and bottom-up investing, the former looking at bigger picture and more macro-economic factors and the latter at company-specific fundamentals and more micro-economic details. While both approaches have the same goal of identifying profitable stocks, this article looks at some of the benefits of a bottom-up investing strategy.

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Why Closet Indexing Matters and How You Can Protect Yourself as an Investor

Closet indexing is a strategy in which an active portfolio manager closely mimics the portfolio’s benchmark index. This can be unfavourable for investors because they are paying higher management fees for a portfolio that achieves a return profile similar to the benchmark index.  

This article takes a closer look at closet indexing and discusses why it matters as well as useful methods to protect yourself, as an investor, from active portfolio managers who are closet indexers.

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