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Active vs. passive, explained Active and passive investing are two key investing approaches. You'll see the two in the world of mutualfunds, as an example. Actively managed mutualfunds are ones where financial professionals study the universe of investments and decide which ones to buy and sell, and when to do so.
Rather, it's the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) -- an exchange-traded fund meant to merely mirror the performance of the stockmarket's primary benchmark index, the S&P 500 (SNPINDEX: ^GSPC). To relatively new investors the suggestion seems outrageous. Most mutualfund managers can't even do it.
But I covered derivatives at first, and then I cover mutualfunds. I worked for a (inaudible) called Fund Action and did that for a little while, and then went — I met a guy named Duff Ferguson at AllianceBernstein. They’d be the biggest activemutualfund to shop times over. RITHOLTZ: It’s ….
And so there was a lot of need on the activemutualfund friends. And so my coverage list kind of converted over time to focus more on mutualfunds, to focus on five to nine plans, college savings. RITHOLTZ: So these are stocks, bonds, ETFs, mutualfunds? But then we were still feeling our way.
All this is all happening while people say they are downright miserable about the market. Even those who are activeinvestors reflect sentiment at depressed levels. That’s fine, because the dichotomy in fact implies further market gain, says George Smith, portfolio strategist at LPL Research.
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