The Investor’s Dilemma: Active, Passive, or Asset-Class Investing?

It’s a decision that warrants the investor’s time and due diligence, because, ultimately, your wealth is at stake and the wrong move could be costly.

When it comes to your wealth management strategy, deciding what to do gets complicated. There are about 45,000 individual securities and more than 30,000 mutual funds and 1,000 ETFs (exchange-traded funds which track a particular index).

There is a map to help guide you through the tens of thousands of investments to choose form. First, you must decide between Active Management and Passive Management. Active Management is someone or a team making decisions based upon their research, then engaging in the market as a competitor in search of Alpha (excess return above a specific benchmark). Passive Management on the other hand seeks to capture the return of the market without taking excess risk, and most importantly at a lower cost to investors.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Pete Woodring, RIA
Founding Partner, Cypress Partners

Woodring is founding partner of San Francisco Bay area Cypress Partners, a fee-only wealth consulting practice that provides personalized, comprehensive services that help retirees and busy professionals to enjoy life free of financial concern.