Passive management

Passive management is like being a spectator in a game. You don't actively participate or make any moves, but you watch the game and let it play out on its own.

In the world of finance, passive management means investing your money in a way that follows a predetermined strategy that does not require constant adjustments or decision-making. This strategy could be based on things like the performance of the entire stock market or a specific group of stocks. For example, if you decide to invest in an index fund that tracks the S&P 500, you're not picking individual stocks, but rather investing in a group of 500 companies in the United States.

Passive investing can be a great strategy for those who want to be hands-off when it comes to their investments. It typically involves lower fees than actively managed funds, as there isn't a need for a team of managers to constantly monitor and adjust the portfolio. However, because you're not actively making decisions or trying to outperform the market, the returns may not be as high as they could be with active management.