Savings & Investment Planning
Make your money work harder for you
At FD Wealth, our independence allows us to provide access to the full range of investment opportunities. Whether your preference is active or passive investing, we will always seek to structure your portfolio in the most tax efficient manner.
The Logic and Benefits of Passive Investing
While we are happy to facilitate an active investment strategy, as a business we believe in the benefits of Passive or “Evidence Based Investment”.
Passive investing is an investment strategy that aims to match the performance of a specific market index rather than trying to beat it the market. Statistics show that if you adopt a strategy aimed at outperforming the market, you actually have a three out of four chance of underperforming the market. Passive Investing mirrors the market and thereby diminishes your risk of underperforming. It does this by holding a diversified portfolio of assets that mirrors an index, and then holding those assets over the long term.
“Owning the stock market over the long term is a winner’s game, but attempting to beat the market is a loser’s game.”
John C. Bogle, Founder of Vanguard
The Main Benefits of Passive Investment
Lower costs
Passive strategies do not rely on active stock picking or frequent trading and so they typically incur significantly lower management and transaction costs than actively managed funds. Lower costs mean that more of your investment return stays with you over time.
Long-term focus and simplicity
Passive investing adopts a “buy and hold” approach, reducing the need for constant decision-making or “timing the market”. This can help avoid the pitfalls of trying to predict short-term market movements and allows investments to grow in line with broad market returns.
Broad diversification
By tracking a whole market or segment of the market, passive portfolios spread risk across many companies and sectors. This diversification helps reduce reliance on the performance of any single stock or sector and aligns with well-established investment theory.
Consistent performance over time
While passive strategies do not aim to outperform the market, academic and industry evidence shows that consistently beating the market is difficult for active managers, especially after fees are taken into account. As a result, passive investing often delivers competitive long-term returns in a cost-efficient way.
Over a 10 year period, less than 22% of active fund managers outperformed passive funds. Source: Morningstar
Conclusion
Passive investing offers a cost-effective, transparent, and diversified way to grow wealth over the long term, making it a compelling option for many investors seeking broad market exposure and long-term consistent returns.
Comprehensive Advice
Our advice is always tailored to your unique circumstances. We start every consultation by taking the time to understand your short and long-term goals, and by considering your entire financial picture.
This enables us to provide independent, practical advice that works for you.
Please note that the value of your investments can go down as well as up, and you may get back less than you invested.
Contact Us
Schedule a free, no-obligation consultation today. Our experienced team is here to provide expert advice tailored to your unique needs.