GLOSSARY TERM
Passive Investing
Passive investing means investing in a simple way that aims to follow the market rather than beat it.
What does this mean in practice?
A passive investor usually buys broad index funds or ETFs and holds them for a long time. The focus is on low costs, diversification and staying invested, not on frequent trading or trying to predict which investments will perform best next. Instead of making constant decisions, passive investing turns investing into a steady long-term process.
Example
You invest every month into a global index ETF and keep doing it for years. You do not try to react to market news or guess the best time to buy and sell. You simply follow a consistent plan.
Why it matters
Passive investing is in the core of long-term investing well because it is simple, low-cost and easier to stick with over many years. It can also reduce emotional decisions and make it easier to stay focused on long-term growth.
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