Passive investing is a strategy where you buy and hold a diversified mix of investments, typically through index funds, and avoid frequently buying and selling. Rather than trying to beat the market, passive investors aim to match the market's overall performance at a low cost. This approach requires less time and attention than active trading.
Instead of researching individual stocks and trading frequently, you invest in an S&P 500 index fund that tracks 500 large U.S. companies. You buy shares once and hold them for years, letting your investment grow with the overall market. You pay minimal fees and avoid the stress of trying to pick winning stocks.
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