Which is an example of passive investing?
A) investing in one specific stock
B) investing in a mutual fund that tries to mimic the S&P 500
C) investing in a mutual fund that is actively managed by a fund manager
D) researching many different stocks and accumulating your own portfolio of investments

Question

Quizplus · Accepted Answer

Passive investing involves investing in a fund that tries to replicate the performance of a particular index, like the S&P 500. This is known as index investing, and it requires minimal effort and management on the part of the investor. Option A would be considered active investing, as it involves choosing and investing in a specific stock. Option C is also active investing, as the fund manager is actively making investment decisions. Option D is a combination of active and passive investing, as the investor is researching stocks but also accumulating their own portfolio, which requires more management and effort than passive investing.

Which Is an Example of Passive Investing