The Active Vs Passive Investing Debate

Поділитися
Вставка
  • Опубліковано 9 січ 2020
  • Visit www.squarespace.com/theplainb... to save 10% off your first purchase of a website or
    domain using code THEPLAINBAGEL.
    If you'd like to support the channel, you can do so at Patreon.com/ThePlainBagel :)
    Intro/Outro Music: www.bensound.com/royalty-free...
    As someone starting off it might not be clear what the difference between active and passive investing is, or why people are so quick to debate the validity of the two approaches. Today, we discuss both sides and how they square up.
    This video was sponsored by Squarespace
    DISCLAIMER:
    This channel is for education purposes only and is not affiliated with any financial institution. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers.

КОМЕНТАРІ • 464

  • @Slintovski
    @Slintovski 4 роки тому +1287

    Me an intellectual : Buys high and sells low

    • @blargor123
      @blargor123 4 роки тому +26

      The biz way

    • @Cvar00
      @Cvar00 4 роки тому +91

      @Luís Filipe Andrade That's the joke

    • @ChrisTheCentaur
      @ChrisTheCentaur 4 роки тому +23

      @Luís Filipe Andrade r/whoosh

    • @Patrickhh69
      @Patrickhh69 4 роки тому +43

      Me, a galaxy brain: short low and buy back high

    • @Ramxie35
      @Ramxie35 4 роки тому +2

      You shorting?

  • @LifeofBoris
    @LifeofBoris 4 роки тому +552

    I only invest in mayonez. never fails!

  • @genegieb9153
    @genegieb9153 4 роки тому +446

    Best intro, we require more of these in the future. The benchmark has been set.

  • @steveantonioni
    @steveantonioni 4 роки тому +341

    THAT INTRO! I'M DYING

  • @RandyLy
    @RandyLy 4 роки тому +352

    I do both so I can argue and fight with myself. When I see my index fund go up and one stock that I chose go down, I'll wonder why I thought I could beat the market. And then when one company goes up and the index fund goes down, I'll believe I'm a genius 😂

    • @remlatzargonix1329
      @remlatzargonix1329 4 роки тому +9

      Randy Ly ...maybe you could passively invest in one benchmark, whist actively investing by buying lotto tickets....That way, if benchmark goes up,,the consensus views are correct, and if the lotto numbers come in its all moot. 😀

    • @stevenclark1123
      @stevenclark1123 3 роки тому +2

      Some people can and do beat the market, but it is a lot of work! Much more than I am willing to do. I do index funds with 85% of my cash and use copy trading with dreamfire52 for the other 15% where they do the active trading for me. This satisfies my need to beat the market without killing myself.

    • @JoelChenFa
      @JoelChenFa 3 роки тому +5

      Sometimes in the same day?

    • @FlexiFlo07
      @FlexiFlo07 Рік тому

      😂😂😂😂😂😂

  • @cjblazer385
    @cjblazer385 4 роки тому +85

    That intro… I hope this channel gets really big, it deserves to be.

  • @johnathanpenczek5499
    @johnathanpenczek5499 3 роки тому +94

    lol I use both strategies.
    I have a passive portfolio for retirement, and I have an active "fun money" portfolio.

    • @TheGael128
      @TheGael128 3 роки тому +1

      how much have you gotten from active ?

    • @blakefisher5148
      @blakefisher5148 3 роки тому +3

      This Is something im starting today :D

  • @MikeStillUK
    @MikeStillUK 4 роки тому +89

    Congrats Richard on the huge success of your channel

    • @ThePlainBagel
      @ThePlainBagel  4 роки тому +11

      Thank you very much! Very cool to receive your support :)

  • @dylanbethune-waddell1254
    @dylanbethune-waddell1254 4 роки тому +31

    As someone who is almost never impressed nor entertained when educators try squeezing memes into their content, that intro was a flawless victory!

  • @spencerfluetsch67
    @spencerfluetsch67 4 роки тому +84

    Intro was literally WSB

  • @CocolinoFan
    @CocolinoFan 4 роки тому +180

    I can't stop laughing 🤣🤣🤣 The intro is a 10/10!

    • @TheFGrox
      @TheFGrox 4 роки тому +4

      Squarespace sponsorship makes me laugh too. /s

    • @kekcity7770
      @kekcity7770 4 роки тому +2

      too much pewdiepie watch time lmao this is great

  • @TuKakaroto
    @TuKakaroto 3 роки тому +4

    I'm actually cursing my finance master and it's really fun to be able to experience a lighter aproach to the content I study on my classes. Great content guys!

  • @endanarchy
    @endanarchy 3 роки тому +16

    I have always felt that this is an instance of two animals disparaging each other without realising "Actually, the environment values both of us because we each serve our roles."
    I leave active investing to those with the capital, capacity, time and resources to do so. I thank them for their contribution to market efficiency, give them their alpha and then ride in that wake with my passive strategy.
    In the words of President Jack Nicholson before he got killed: Why can't we call just get along?

  • @alex2143
    @alex2143 4 роки тому +14

    I’m a passive investor for two reasons:
    - odds are the counterparty to most of the trades that you make in stocks, is an institutional investor. They’ve looked at the data and decided that it’s best to sell that stock at that time. And it’s their job to do that. It’s pretty arrogant to believe that I can make a better decision with less training, less time and less information. I don’t like those odds one bit.
    - if I were to become an active investor, I’d have to do a lot of research in order to make good decisions. That’d take hours. If I were honest, I’d have to charge myself for those hours worked, since I could’ve been doing something else during that time. Suppose I spend 4 hours a week doing this research... I could spend those 4 hours on a side job, and I estimate that that may make me like €10/hour. So unless I believe that the extra research is gonna be so awesome that, with my meager assets under management it’ll net me an excess of €40 per week, I’d be better off taking a side job for those 4 hours and investing that money passively.
    So... being realistic and humble is what causes me to be a passive investor.

    • @remlatzargonix1329
      @remlatzargonix1329 4 роки тому +1

      That's a wise move.
      The empirical results show that, after fees, the average passive investor out-performs the average active investor.
      Even many superstar active managers don't always beat the market consistently year after year.

  • @bicycleninja1685
    @bicycleninja1685 4 роки тому +7

    Also, stocks held less than one year are taxed as short-term capital gains, which can be about twice as much as stocks held over a year. So your winnings have to be able to offset that if you're operating as an individual.

  • @neal2049
    @neal2049 4 роки тому +61

    Reveal your portfolio for 1M subs mark? Also, still waiting for the Bagel Buddies series.

  • @efrainanaya5671
    @efrainanaya5671 4 роки тому +3

    Automatic like for intro! Always enjoy viewing your content

  • @weggro
    @weggro 2 роки тому

    Love the channel! No fancy graphics just straight to the lessons. 👍

  • @choreomaniac
    @choreomaniac 3 роки тому +7

    The funny thing is, those who hand their portfolio to an active manager tend to be the most passive. People who only have 2-3 index funds often are more involved in their investment decisions than someone who pays a manager to invest for them.
    The worst of all worlds is to pay a management fee to someone who invests in mutual funds.

    • @alex2143
      @alex2143 9 місяців тому +1

      Mostly agree, except I do see some value in an advisor helping pick the index funds that someone should invest in based on their goals, risk tolerance and investment horizon. Such an advisor would probably only have to spend a relatively small amount of time on each client, so they might only have to charge a small fee to cover their expenses, and they might be able to provide access to additional financial advice when needed.

  • @surbhisawant3546
    @surbhisawant3546 3 роки тому

    Love your videos!
    Please do one on the current market situation.
    Thanks!

  • @ZacharyLaid
    @ZacharyLaid 4 роки тому +21

    Passive Income: S&P500 ETF’s
    Active Income: Handpick and manage companies

    • @remlatzargonix1329
      @remlatzargonix1329 4 роки тому +4

      Zachary Laid Finding Freedom .....yup, and it is extremely difficult to beat the market by hand-picking individual stocks and even harder still to do it consistently over long time periods. But, some investors can and do so.
      The one problem with the active approach (if one does not want to simply rely on luck, and I am not poopooing luck, some people have gotten rich by being very lucky) is that the active investor will have to have some new and/or unique analysis methods/algorithms to make accurate predictions/forecasts enabling them to anticipate market movements before they happen and so profit thereby.
      Behavioural finance approaches can only take an active investor so far, since 1) the phenomena are well known to the market participants, and 2) some investors are, indeed, irrational, but not ALL participants are irrational. So, knowing that investor Joe suffers from irrational behavioural biases, does not mean everyone on that market is similarly deluded.

  • @AlejandroVargas-mh5bt
    @AlejandroVargas-mh5bt 4 роки тому +1

    Excelent topic and helpful information. I would love to see you do a video about how the trading of commodities affects the retail price of such

  • @palermodpr
    @palermodpr 4 роки тому +1

    This channel is awesome! Keep up with the great work.

  • @StatsMass
    @StatsMass 3 роки тому +3

    I think it's important to note that the difference between active and passive is more substantial when you consider net performance over a lifetime of investing.
    Net performance because active investing by nature requires higher portfolio turnover than the index. This results in a higher tax drag as well as transaction costs. Additionally, active management requires resources to research opportunities and execute the trades. Even if the manager operated as a non-profit (although I'm not aware of any that aren't for-profit)... because there are a large number of managers, the assets to cover these expenses at each firm are relatively small: higher expense ratios.
    A lifetime of investing. At any one point in time, an active manager can beat the benchmark. But because markets favor different styles over time and no single manager is competent in every market. At some point, they may not beat the benchmark sustainably. The investor is left to hope they picked the right manager at the right time. If they're wrong, switching to another manager can incur large transaction fees, termination fees, load fees, and taxes. Even in a no-fee and tax-advantaged scenario, performance chasing often leads to underperformance.

  • @victorpopov3809
    @victorpopov3809 4 роки тому +3

    Active investing is like playing in a casino, the casino wins 100% of the time. How can you play a game where the rules are not made by you, and can be changed at any time ? A millionaire can just swing the price and you will loose everything, trading bots will always outsmart you and many other things. Seeing as charts and TA is mostly predictions, daytrading is like betting on something, sure you might get lucky, but its just gambling.

    • @noahyannis2465
      @noahyannis2465 4 роки тому +1

      If you do you research is has nothing to do with gambling.

    • @victorpopov3809
      @victorpopov3809 4 роки тому

      @@noahyannis2465 you dont need to do research to understand the most basic logical concepts of economics and investing, you just need to be smart

  • @RedOneM
    @RedOneM 4 роки тому +20

    You definitely should take advantage of both. You even could split it 50/50, half goes to long term (10y outlook, index funds) and the other half should be researched by yourself and the term of holding can be chosen (yearly/half a year/quarterly). With this strategy you would still get a chance to find the next hit company perhaps, but even if you miss it you still have 50% invested relatively safely (as long as the market stays alive).

  • @nicksantillano8553
    @nicksantillano8553 4 роки тому

    Fantastic job, great use of visuals and humor.

  • @VadymSkl
    @VadymSkl 4 роки тому +1

    That intro is pure GOLD

  • @troypresley
    @troypresley 4 роки тому +17

    Really love your videos!!
    What about the concept that the time and effort spent chasing alpha has to pay off vs other ways to spend your time? If I make more at my day job per hour than the alpha I get from researching investments, then passive is objectively the logical choice.

  • @PaulVazquezJD
    @PaulVazquezJD 4 роки тому +16

    Sadly, I've never laid an egg so I don't even have egg baskets.

  • @PassiveIncomeTom
    @PassiveIncomeTom 4 роки тому +3

    *Great comparison between these two!* 👍

  • @jacobspeirs6647
    @jacobspeirs6647 10 місяців тому +1

    Great Video. Thank you for sharing.

  • @mikeno.9308
    @mikeno.9308 4 роки тому +20

    But if a passive investor trades actively, does an active investor hear a tree fall in the forest?

    • @remlatzargonix1329
      @remlatzargonix1329 4 роки тому +2

      Mikey Norris ....sadly, only moments before the tree falls on him/her and crushes them into "forest pizza".

    • @WeLoveValue
      @WeLoveValue 3 роки тому +1

      lol. good question

  • @dumolollen7676
    @dumolollen7676 4 роки тому +3

    It's depends on the participants as their approach with regards to Active n Passive investing I would like to a combination of both of the approaches

  • @minaise
    @minaise 4 роки тому +1

    Like your style. Keep doing what you doing

  • @pongop
    @pongop 2 роки тому

    Great overview! Thank you.

  • @roberteischen4170
    @roberteischen4170 4 роки тому

    That Intro was dope bro.

  • @roypaenen
    @roypaenen 4 роки тому +1

    Great video again!

  • @OopsFailedArt
    @OopsFailedArt 4 роки тому +6

    Very well done video. Also remember that active mutual funds inherently have a handy cap that shows negative returns. When they do well, investors surge money in causing the manager to make trades at higher prices than they normally would have. This is repeated on the downside.
    Wall street journal actually did a study accounting for this and found that the average active mutual fund outperformed its index by about 0.5-1.5%.
    It's very hard to track. It also suggests that if you want the benefits of active management you may need to either do it yourself or invest in a hedge fund where they have more control on flows of funds.
    Personally, as an active investor, I believe most people benefit from a passive approach as it takes years to master the skills for consistent outperformance. You can't just watch a video or read one book. It's like any other skill. It takes time

    • @sweasyco
      @sweasyco 11 місяців тому

      Hey could perhaps link the study. Would be very appreciated

    • @OopsFailedArt
      @OopsFailedArt 11 місяців тому +1

      @@sweasyco man I wish I linked it. I’m trying to find the specific study. I no longer have the Wall Street Journal and I think that’s where I read it. Totally forgot about this so if I find it again I’ll post it here. That’s one I should have printed out.

    • @alex2143
      @alex2143 9 місяців тому +1

      I have some doubt about the average active mutual fund outperforming its index at all. The SPIVA scorecard shows that, over 15 years, about 95% of active mutual funds underperform their index.
      Whatever the reason doesn't really matter. As an investor, the only thing that matters in the end is total returns.

    • @OopsFailedArt
      @OopsFailedArt 9 місяців тому

      @@alex2143 that’s true. However, there’s an interesting point on that. I did a study recently on 450 equity funds roughly. What I found was that while large cap funds substantially under perform, mid cap and ESPECIALLY small cap have a habit of being even or out performing their index fund rivals.
      The largest average outperformance was in small blend funds where the active manager had access to all strategies. This is because the pricing information is far less efficient outside the large cap funds.
      Moral of the story: if you’re buying a large cap fund, go with the index, mid cap do your research but likely index, small cap very likely to do actively managed (also far lower volatility).

  • @DoddyBicaraInvestasi
    @DoddyBicaraInvestasi 4 роки тому +2

    Great explanation!! Sadly, in my country, Indonesia, even the passive index funds still cost you around 1.5% of expense ratio. The active mutual funds are even worse, they cost you around 4-6% of expense ratio.

  • @sandpiperbf9767
    @sandpiperbf9767 4 роки тому

    Thank you, great video

  • @ManMountain1974
    @ManMountain1974 4 роки тому

    Fantastic video. Well done!

  • @zinebibanez8440
    @zinebibanez8440 4 роки тому

    Watching one of your 10min videos is like reading 3 books on the matter......twice!!!! Thanks for making them.

  • @navi_navi_
    @navi_navi_ 4 роки тому +1

    Thx for releasing that right AFTER my exam on investments :))))

  • @beatrizcgv
    @beatrizcgv 3 роки тому

    Excellent video, good job!

  • @QvsTheWorld
    @QvsTheWorld 2 роки тому +2

    Something in favor of regular passive investment is the concept of "Dollar Cost Averaging" principle. Meaning that if you invest 100$ every month you will be buying more shares when the price is low and less when the price is high. It's worth looking up.

    • @DJGR-Videos
      @DJGR-Videos Рік тому

      Most studies show lump sum is actually more efficient than dollar cost averaging though

  • @WeLoveValue
    @WeLoveValue 3 роки тому +2

    If you know what you are doing the active investing can be the way to go! The issue is that too many people pick individual stocks without any research and would be much better off just buying the index.

  • @ZenTradeGame
    @ZenTradeGame 3 роки тому

    As always......great video sir !

  • @d0718
    @d0718 4 роки тому +12

    Thank you for another amazing video :)
    A video idea: evaluate Benjamin Graham’s “the intelligent investor” (W.Buffet’s fave book). Key points and whether they still stand true? What are the opposing views and do they have ground?

    • @hansel1611
      @hansel1611 4 роки тому +2

      Benjamin Graham had the "cigar-butt" way of investing, buying fair companies at amazing prices. Warren Buffett later moved away from this and instead started buying amazing companies at fair prices

    • @remlatzargonix1329
      @remlatzargonix1329 4 роки тому +4

      Hänsel ....I don't want to sound like I am against active investment, because I am not, but one problem with using "guru" investors, such as Buffett or Graham, (the common ones who are used to "prove" a particular investing argument) is that we cannot rule out survivorship bias, by using the small number of significantly successful investors as examples. (By that I mean that we cannot prove statistically, deductively, or otherwise, that results obtained are due to the course of actions that they recommend. They may, indeed be correct, but the issue is of proving it. ) A secondary issue of using "gurus" which also affects the first issue is that people will follow what gurus do (or tell them what to do), further enhancing their results....This secondary issue becomes even more pronounced as the guru becomes more successful as more and more people follow the gurus recommendations.
      Still, if one were an investor, it might be wise to follow the guru, because if their advice makes you rich, then it might be irrelevant whether their information is true or not......The ends justify the means.😀

  • @nadiab.8869
    @nadiab.8869 4 роки тому +1

    Brilliant intro!

  • @Bou89
    @Bou89 4 роки тому

    Content is getting better.

  • @monkeytron5061
    @monkeytron5061 4 роки тому

    “Regret Aversion” I like that! I call it “Revenge Trading”.

  • @NikitaVinogradov-pd2ch
    @NikitaVinogradov-pd2ch 4 роки тому +1

    Great vid!

  • @AWhatPlayerTony
    @AWhatPlayerTony 4 роки тому +2

    Love the intro

  • @trmibp9441
    @trmibp9441 3 роки тому +4

    You can make money by actively investing but you need to have 3 things on your side:
    1. Time
    2. Patience
    3. Don’t get greedy or don’t buy into fear of losing out
    Remember you only become successful if you think successful. I started investing actively some years ago and not gonna lie it’s hard and I wanted to give up but I put more time in stayed patient with my trades (not day trading) and I gave up on only wanting to invest to buy a Ferrari or a mansion in some exotic place because I was greedy and that actually caused me to lose money, now after all this time I actually make good money because I know how the markets work and what drives them. Just follow the 3 things I said there and you will make money investing in the market! Best of luck to everyone out there!

    • @alex2143
      @alex2143 9 місяців тому

      Or you could just invest in an index fund

  • @danielcastro1705
    @danielcastro1705 4 роки тому

    Your videos are quality!

  • @abdelsalam50
    @abdelsalam50 Рік тому +1

    Please do more of these Intros :D

  • @markinson561
    @markinson561 3 роки тому

    Great video!!!!

  • @CrimsonFox36
    @CrimsonFox36 4 роки тому +4

    REAL Active Investment has never been tried before!

  • @jeremythompson5151
    @jeremythompson5151 4 роки тому +1

    I do both. I have an index fund portfolio and a dividend stock portfolio. Brings me the satisfaction of passive income and the peace of mind of massive diversification. Plus it can be exciting to own companies directly.

  • @Fortzon
    @Fortzon 4 роки тому +24

    So many memes in that intro :D

  • @joseafalvel
    @joseafalvel 3 роки тому

    I use both strategies

  • @John-thinks
    @John-thinks 2 роки тому +2

    The middle-ground I've been subscribing to recently is that markets are efficient - but that's because there are people who earn a living buying and selling to get them to that efficiency level. And that activity needs to be compensated. So an activist can outperform the market slightly to earn some money in exchange for helping keep that ticker perfectly balanced on the efficient price for some stock.

    • @MikelSyn
      @MikelSyn 2 роки тому +1

      That's my view point as well. The large number of active investors trying to arbitrage on their information tends to push markets close to efficiency. There's a sweet spot where any higher, fewer active investors can find arbitrage options, and any lower, more active investors will try. If I want to actively invest, I need to do better than them. If I don't think I can, I'm better off passive investing.
      And then of course there's the huge (and still growing) pool of completely ignorant retail traders just throwing distortions into the market, and screwing both sides up.

  • @connorcassidy1983
    @connorcassidy1983 4 роки тому

    definitely one of your best videos haha, funny and informative

  • @John-thinks
    @John-thinks 2 роки тому +1

    Also FYI i loved the humor worked into this one! haha

  • @user-zl3rb4rg1n
    @user-zl3rb4rg1n 4 роки тому +7

    when the intro hitted the "imbecile", i died laughing xD

  • @cekirdekci32
    @cekirdekci32 2 роки тому

    easiest like is for your channel. always great job . love this channel

  • @monkeytron5061
    @monkeytron5061 4 роки тому +3

    You can do both.
    So long as you keep those accounts ABSOLUTELY separate!
    Great video.

  • @koreanplayboy
    @koreanplayboy 4 роки тому +5

    btw, your channel is way more valuable than a college degree

  • @Fredman5551
    @Fredman5551 4 роки тому

    Never seen your channel. But your intro was clutch 🤣🤣😂

  • @andreimircea2254
    @andreimircea2254 4 роки тому +8

    I like to call myself a Passive investor, mainly because I like to invest in stocks for the long run, and before buying a stock I love to research it in order to ensure it will be stable or grow in the long term (At least 5 years)

    • @sweasyco
      @sweasyco 11 місяців тому

      Well you can call it whatever you want but thats active investing

    • @andreimircea2254
      @andreimircea2254 11 місяців тому

      @@sweasyco
      I don’t know how investing for the long term in stocks without trying to outperform the market can be called active investing, but you do you jam.

    • @sweasyco
      @sweasyco 11 місяців тому +1

      @@andreimircea2254 Because you have to actively research and pick stocks, even if you dont do it often, action is required.

    • @sweasyco
      @sweasyco 11 місяців тому

      @@andreimircea2254 And why would you ever pick stocks if you dont think theyre gonna outperform the market? ETFs would be the obvious choice

  • @thebrianpaige
    @thebrianpaige 4 роки тому +1

    This really is one of the most coherent, concise, complete channels on UA-cam

  • @LockCard
    @LockCard 3 роки тому +2

    both
    they are both good
    day trading and swing trading are really useful,
    and passive income helps build over time regardless of the market.
    the goal of investing is not to beat the stock market
    but to go with its ebb and flow.

  • @Gamer_Dad_1985
    @Gamer_Dad_1985 4 роки тому

    Great Video. Can you make a video about Margin Accounts and Margin Trading?

  • @noahi.1381
    @noahi.1381 4 роки тому +1

    Do both, but adjust to your strengths and weaknesses.

  • @mrboobiesrider9212
    @mrboobiesrider9212 3 роки тому

    That was a really fun watch. 10/10

  • @pratikjain9018
    @pratikjain9018 4 роки тому +3

    Market are inefficient in the short run but efficient in the long run. Thats why buffet say that the best way to make money for know nothing investor is index fund , yet he still does active investing.

  • @garcia4062
    @garcia4062 3 роки тому

    Gracias

  • @tristanderoo9915
    @tristanderoo9915 9 місяців тому

    That intro was genius haha

  • @genzinvesting6561
    @genzinvesting6561 4 роки тому

    Just came across the channel
    Great video

  • @TreadNShred
    @TreadNShred 3 роки тому +1

    I would say as a passive investor I'm actually both. I spend time looking at the fundamentals of a business, its balance sheet and other things. While, also trying to outperform the market in a passive manner. Achieving this by buying quality companies for less than their intrinsic value.

  • @MrHavy09
    @MrHavy09 4 роки тому

    A mix of both is great (I prefer mutual funds to growth, aggressive growth, speculative growth, and a few sector specific funds)

  • @ostrichinvesting4432
    @ostrichinvesting4432 4 роки тому +1

    Awesome intro 🔥! Both approaches have their merits IMO and you don’t have to make a binary choice between the two. Nice video 👍

    • @remlatzargonix1329
      @remlatzargonix1329 4 роки тому

      Ostrich Investing ....I agree, and I think, in practice, many others do this. Look up core:satellite approaches to see how institutional investors do this.

  • @scoobydoobers23
    @scoobydoobers23 4 роки тому +2

    My favorite irrational concept of active investing is that the market is irrational but me as a market participant am rational. . . . All of us bring our biases and ideas to bear that make us imperfectly rational.

  • @sid35gb
    @sid35gb 3 роки тому +1

    Well there’s a few active investments that outperform the usual benchmarks by quite a bit but not all the time and it’s difficult to find a good one that will produce good returns in the future. But passive investors need active investors because the volatility they cause benefits the dollar cost averaging done when you’re investing a monthly amount from your salary.

  • @Han-rg4zt
    @Han-rg4zt 4 роки тому

    Hey Richard!
    Great videos you had produce I must say.
    I have 2 questions, and I would appreciate if you could answer them! Thank you!
    1)When executing QE why wouldn't Feds keep some of the reserves to buy long term treasuries so it would not print as much money that resulted in increasing their balance sheet exponentially?
    And that brings to question 2.
    2)Why Feds would print since they would have cash holdings from the previous sold of securities to the market after the economy recovered and had matured into the later economic cycle that doesn't require the crutches of the past QE?

  • @patrickhenry4874
    @patrickhenry4874 2 роки тому +1

    Active investing keeps market efficient so passive investing works

  • @jaytang4954
    @jaytang4954 3 роки тому

    i use passive for etfs and mutal funds but i want the underlying stocks usually so i actively look at those underlying stocks

  • @dartek14
    @dartek14 4 роки тому +2

    I would like you to review the book by Peter Mallouk "5 Mistakes"-2014 or have him call in because his book showing the truth about how many hedge funds and Mutual funds fail to perform is a powerful disclosure.

  • @graham1034
    @graham1034 2 роки тому

    I like to employ both strategies, but I know I'm bad at investing so I keep the split at around 80% major index ETFs and 20% my own picks that I try to keep diversified.

  • @mbk928
    @mbk928 3 роки тому

    seriously you are the best

  • @cshaffer1847
    @cshaffer1847 4 роки тому +13

    im on the spectrum

    • @andystm
      @andystm 3 роки тому

      Make it work to your advantage. Find your niche.

  • @heve6147
    @heve6147 3 роки тому

    Hello,
    Do you have papers or other source recommendations about this topic? That would be very helpful for me as I am researching passive investing in bear markets and i want to fully understand the concept of passive investing more.
    Thanks in advance,
    Kind regards,

  • @mr.xernorus4026
    @mr.xernorus4026 9 місяців тому +1

    I just by good moat compagnies and reinvest the dividend when they are low and never sells...since 1997. So im active investor that take is profit passively from dividends. Checkmate.

  • @niranmojo
    @niranmojo 4 роки тому

    Smashed the like button

  • @WreckingCr3W2
    @WreckingCr3W2 4 роки тому

    Great video

  • @rex.2053
    @rex.2053 4 роки тому +29

    god that intro had me dying LMAO

  • @SynThenergy
    @SynThenergy 4 роки тому +1

    Great points about the two sides.
    One thing to note is that for every alpha-generating active firm, there MUST be a management company that generates negative alpha. These funds and companies go bankrupt due to outflows going to either index funds or "good performing" funds. As a result, alpha gets harder and harder to get and stock prices are more accurate because less-skilled management firms can't distort the market.
    IN other words, active managers set the price of stocks, but indexing makes them more accurate as time goes on.
    Eventually there will be a balance between active and passive, probably at 80% passive. Once you're beyond that, there are price distortions that can be exploited.

    • @akaman85
      @akaman85 4 роки тому

      Bryce I think you’re conflating a ton of economic theories into your version of the you truth, but your theory misses some huge factors. Namely, index funds are not all created equal. Not all indexes reflect the S&P or an S&P TSX composite...which ultimately is what a lot of passive theories are based on, historical returns of US benchmarks (which also do not factor passive fees).
      Past returns are not indicative of future returns. Further, passive theories have their own biases. Further, index funds carry their own strategies, and unless you are invested into an index which somehow has equal weighting across all world markets (which in itself is arguably not the best strategy) you are always biased towards one market or another.

  • @alfonsoipad4655
    @alfonsoipad4655 4 роки тому

    Thanks but what I wish to see is a more in depth analysis of eg the biggest active funds in the last 10 or 20 years vs index funds and see what has really worked in the past

  • @philippecourtemanche1994
    @philippecourtemanche1994 4 роки тому

    This is quality content