Jack Bogle: Why you don’t need a fund manager to beat the market

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When you invest in the stock market, you have two strategies to choose from: active investing and passive investing.

They are two contrasting strategies for putting your money to work in markets.

Both gauge their success against common benchmarks like the S&P 500—but active investing generally looks to beat the benchmark whereas passive investing aims to duplicate its performance.

According to Forbes, active investing is a strategy that involves frequent trading typically with the goal of beating average index returns.

It typically requires a high level of market analysis and expertise to determine the best time to buy or sell, which means you need to find a good fund manager.

Active funds are flexible in volatile markets, but they usually demand higher fees and can increase your investment risks when things go wrong.

Passive investing is a strategy focusing on buying and holding assets for the long term. It involves purchasing shares of index funds or ETFs that aim to duplicate the performance of major market indexes.

Passive investing has lower costs, decreased risks, and higher returns in the long term. But it may be boring if you want the excitement from trading.

So which is good for you, active or passive investing? In this video, Jack Bogle gave his opinion and advice.

Warning: This video is to show you John Bogle’s view about fund managers. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.

Source: Finance Jane (Shared via CC-BY)