Investor

  

Categories: Careers, Wealth, Investing

One who invests, who puts money to work, who risks.

See: Portfolio Manager. See: Hedge Fund Manager. See: Private Equity Manager. See: Mutual Fund Manager.

If you're good at doing this, maybe you can be a pro.

Related or Semi-related Video

Finance: What are Active Investing and A...4 Views

00:00

Finance a la shmoop.. what are active investing and active management? Active

00:09

doing something, active as in trying to beat the market by trading stocks active [People riding a bike on stock market appears on board]

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as in humans making decisions often with the help of computers trying to beat

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their index or the overall market ie the S&P 500 that's what we mean by the

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market active; investing.. active; management okay

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passive just passive.. active is what hedge funds and mutual funds and any

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kind of funds that have a strategy do they actively try to invest money such

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that the performance of their portfolio does better than whatever index or

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benchmark it's measured against and notice were not talking about after-tax [Man discussing active investments]

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performance here because remember every time you trade in a taxable account

00:54

while the attacks men cometh but we won't go there right now..... Your benchmark

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compare is versus the S&P 500 and you manage a broadly based mutual fund the

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passive investing cousin in this investment is an index fund think ticker

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SPY, that's the biggest S&P 500 index fund well index funds are not actively

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managed they are passively managed they just sit there and get tweaked a little [Pile of money grows larger overnight]

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bit each year or really each quarter to kind of mirror the S&P 500 or whatever

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their index is supposed to mirror but they just kind of sit there there's no

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human trying to beat the market they are the market index funds are the

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market and yeah 99% of actively managed funds don't beat the market over any

01:42

extended period of year like five or ten years very few ever beat the market and

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essentially none of them beat the market after taxes so then why would someone

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invest in an actively managed mutual fund when they're paying taxes and

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they're thinking about an index fund as a comparable well basically they're one [Mutual funds on a table and a lollipop appears]

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of these so yeah don't be one of these guys

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