Passive investing is an investing approach that involves buying & holding securities while minimizing fees with the goal of building wealth over time. Here are some of the key risk-managing strategies involved with passive investing:
- Diversification: managing risk is an important part of any investing strategy. Companies and economies go bust at times, but they generally don’t go bust all at once. If you diversify your portfolio by investing across different sectors, economies, and asset classes, you can spread your risk and limit your exposure to specific companies, sectors, and asset classes.
- Re-balancing: once you’ve decided how to diversify your portfolio, you need to keep it diversified. This is where rebalancing comes in. In order to align your portfolio back to its target, you need to buy (and possibly sell) holdings from time to time as some holdings grow or shrink.
As with any investing strategy, discipline and follow-through are key. If you’re following (or planning to) follow a passive investing strategy we’ve got you covered. For that reason, we’ve partnered with Passiv.
Passiv’s goal is to automate the tiresome aspects of managing a portfolio by making it easy for you to allocate your cash, rebalance your portfolio, execute trades, and invest your deposits & dividends as they become available.
And the best part? Passiv offers a fully integrated, secure and free to link tool. Ready to start? Check out this article for easy instructions on linking your Questrade accounts up with Passiv.