A more Compelling reason for a Passive Approach

There is a lot of evidence that shows that active fund managers underperform the markets over the longer term. Saying active management beats passive investing over the long term is comparable to saying Tylenol causes autism. That said, there is a more compelling reason to go the passive route.

Time in the market with average returns is the winning formula to achieving your goals. If you achieve average returns for 30 years, you will rank in the top for investors. By having patience and discipline, you allow compound interest to have maximum impact on your investments, and you will increase the likelihood of hitting your goals. You don’t need to beat the market or find that one high-performing stock; just be average for 30 years.

Keep it simple and stress-free, and do it for a long time. Implementing a passive approach, typically with a low-cost, globally diversified, index-like fund for a long time, takes away guesswork and decision fatigue and significantly increases your chance of success. If there is a secret, this is it.