Are you after an investment strategy that’s smart, simple to understand and gives you every opportunity of outperforming the average fund manager over the long-term?
If yes, then passive investing is probably for you.
With passive investing, you don’t need to worry about the price of commodities such as gold.
Nor do you need to immerse yourself in company reports trying to evaluate various shares either in the UK or globally.
Passive investing means you don’t need to speculate to accumulate.
There’s no need to try to second guess the market and work out which companies will prosper, or convince yourself you have the required sixth sense to beat other investors.
As a passive investor you stop listening to all the noise from the wolves on Wall Street, and you refuse to participate in the City’s game.
Instead, you invest in low-cost funds which either capture the return of global capital markets or track a commercial index such as the FTSE All-Share.
But why passive investing? There’s years of evidence, including Nobel Prize winning papers, which demonstrate that passive investing is a superior strategy compared to following the latest hotshot fund manager or investment scheme.
Passive investing can save you from costly mistakes, it’s as straightforward as investing gets and it’s sensible.
You just need half a dozen funds in your portfolio to spread your money across the key asset classes – your investments will still be far more diversified that than the average investor.
Too good to be true? Passive investing is a medium to long-term pursuit and like all investors you must be prepared to cope with volatility and market downturns.
Passive investing simply requires you to have faith in capital markets.
It is a wise strategy that gives you clarity and peace of mind, frees up valuable time, and both enhances and preserves your wealth.
Jonathan Gibson is director of wealth services at Aberdeen firm AAB Wealth