“Keep your hands away from your investments and back away from the market reports.
”That pretty much sums up passive investing, the approach I have practiced for years. I’ve preached it for years, too, and did so in a recent column. The wisest way to build wealth is by investing in a variety of asset classes, setting target allocations in each asset class, and then taking your hands off except to periodically rebalance to the original target allocations.
For most of us, the best way to invest in an asset class is to give our funds to a mutual fund manager who will purchase the appropriate investments. Mutual fund managers have a choice of actively or passively managing the money you give them to invest.