January 21, 2022

Passive vs. Active Investing – Which Is Best for Your Retirement Portfolio?

Max Martin

The active-versus-passive investment debate is one that has raged on for decades and often leaves new investors confused as to the best place to put their money. On one hand, actively managed funds can seem exciting – a chance to outperform the market and speed up investment returns. On the other hand, passive investing has historically been seen as the safer option, touting both lower fees and risk. How should an investor decide on which strategy is best suited for them?

One telling piece of advice comes from the SPIVA (S&P Indices versus Active) Scorecard, widely taken as the authoritative source for statistics surrounding the active-versus-passive dispute. Updated on June 30, 2020, the scorecard finds that more than half of all fund categories have at least 50% of their funds being outperformed by their benchmark over the past year. Even more surprising, no fund category has more than 30% of their funds outperforming their benchmark over the longer 15-year period.

At KDM Investment Management, we believe in investing for the long term. Using a diversified group of evidence-based funds rather than speculative active management has overwhelmingly been shown to be the most effective way to secure a steady positive return on long-term investments. With the lifetime of most retirement portfolios reaching well beyond the 10-year mark, it makes sense to invest in a strategically diversified portfolio when planning for retirement. For more information on how we can help you invest for retirement, visit our website www.kdminvest.com.