All You Need To Know About Passive Investing
This article is part of a series. To view all the articles in the series, click the button below.
If you’re looking for a simple investment strategy that’ll give you an excellent chance of beating the average fund manager, passive investing might well be for you.
Is Your Money In A Badly Performing Fund?
Bestinvest has been exposing "dog" funds since 1994. Its team check funds from all sectors, identifying poor performers. The list has now hit a record high. Download Spot The Dog to see if you're affected.
What You Need To Know About Passive Investing And How To Do It
Active Investing Or Passive Investing? That Is The Question!
In 2016, Michael Gove suggested that Britain had had enough of experts. Had he been talking about fund managers, he may well have had a point.
According to FT Adviser, in 2017, active fund selection is no better than a coin toss, with just 53 per cent of the 2,100 equity funds examined beating their benchmark.
Perhaps one of the reasons for the lack of performance by the experts was active fund managers’ hidden fees and charges.
...the chances of achieving “true” investment cost transparency, at this juncture, are remote and diminishing by the day. There are just too many open questions - investment cost transparency has become shrouded in varying cloaks of, ironically, transparency. They leave the waters as the muddiest that I have ever seen. You can’t drink safely from a muddy pool.
If you’re unimpressed by your active fund performance, or the amount of time you have to dedicate to making investment decisions, or the money you’re spending with advisers or discretionary fund managers to do it for you, it’s worth getting to grips with passive investing.
According to ‘A Guide To Passive Investing In The UK’...
You don’t worry about what the price of gold is doing this week. Nor do you spend days buried in company reports trying to evaluate stocks.
There’s no need to time the market, pick winning companies, or convince yourself that you have the special powers required to beat other investors – especially since the vast army of superbly equipped professionals you’re up against can’t reliably outperform either.
As a passive investor, you refuse to play The City’s game. Instead you use low-cost funds called index trackers to reap the market’s return and get rich slowly.
The guide comprises a series of really informative articles arranged in the following sections:
- How Passive Investing Works (six articles)
- Diversification (four articles)
- Asset Allocation (four articles)
- Model Portfolios: Ideas For Passive Portfolios (four articles)
- How To Buy Your First Index Tracker (two articles)
- Cutting Costs (five articles)
- The Simplest Solution Of All (one article)
- Planning (six articles)
- How To Buy Low And Sell High – Rebalancing (one article)
- Resources (two articles)
Check out the full guide to passive investing.
The Rise Of Passive Investing
Please Share This
If you’ve found this page of interest, please would you kindly send a link to it to your friends and colleagues using the buttons below. You’ll be helping us out, and they might like it too. Thanks, it's much appreciated.
AJ Bell Is Often The Best Value SIPP For Stockmarket Assets
Over time, charges can wipe out a huge part of your fund. We like AJ Bell because there are no set-up costs. If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund. And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment). However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.
Get Valuable SIPP And SSAS Insights Emailed Directly To Your Inbox Every Monday
As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk. Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.
Please read our full Terms which includes criteria for SIPPclub membership.