- By Amy Horan
- Published 6/10/2010
- Spring/Summer 2010
-
Rating:
Unrated

Almost all investors are familiar with the concept of active management
and understand the concept of trying to pick the right stock at the
right time in order to benefit from its price appreciation. Opposed to
this approach is the concept of passive, or index management, which
simply tries to replicate the return of ‘the market’ at minimal cost to
an investor. In both cases a return will be generated that will be
either lower than the overall market (the index fund due to fees or the
active manager who makes the wrong bet) or above the market (the active
manager that makes the right bet).