{"id":101057,"date":"2017-01-20T15:48:56","date_gmt":"2017-01-20T20:48:56","guid":{"rendered":"http:\/\/countingpips.com\/?p=101057"},"modified":"2017-01-20T15:48:56","modified_gmt":"2017-01-20T20:48:56","slug":"active-vs-passive-investing-and-the-winner-is","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/01\/active-vs-passive-investing-and-the-winner-is\/","title":{"rendered":"Active vs Passive Investing: And the Winner Is …"},"content":{"rendered":"
January 20, 2017<\/div>
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By Elliott Wave International<\/span><\/h3>\n

The chart below comes from a new report from our friends at Elliott Wave International.<\/p>\n

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It’s as straightforward as it looks — not much need for animation.<\/p>\n

But, perhaps you’re not completely clear about the difference <\/strong>between passive vs. active funds — or about WHY that difference is even worth talking about — then please stick with me as I offer a fast summary.<\/p>\n

Active funds include the human element — as in, a fund manager or managers.<\/p>\n

Investors who invest in active funds want a manager who can <\/em>identify trends in a securities market or market index, of stocks or bonds or money market instruments — the fund manager sees opportunities in that market, and decides to allocate the fund accordingly.<\/p>\n

The vehicle of choice for passive investing is, the Index Fund. Put simply, these funds track an index — like the Dow or NASDAQ — and wherever the index goes, the fund follows.<\/p>

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Free Reports:<\/p><\/div>\r\n

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<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

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<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

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Index funds were created in the bear market years of the 1970s. Yet, participation was almost nonexistent until after 1985 — when the great bull market was already underway.<\/p>\n

Yet, unlike U.S. stock indexes — which saw two <\/strong>huge declines in the first decade of the 2000s — the growth of index funds has gone in only one<\/strong> direction — up for three decades.<\/p>\n

The index funds share of equity mutual funds today exceeds 35% percent, and the trendline is getting steeper<\/strong>.<\/p>\n

Total index investing today exceeds 4 Trillion dollars<\/strong>.<\/p>\n

So, back to the chart above.<\/p>\n

What this chart shows us is how the passive investing trend accelerated in 2016. For the year, 286 billion dollars<\/strong> flowed OUT of active funds — a record amount…<\/p>\n

… And it’s no stretch to infer that at least some of this outflow became the inflow into passive funds — some 428.6 billion dollars<\/strong> flowed into active funds in 2016 — also a record.<\/p>\n

So the question is — why? Why has the share of index fund investing gone from basically zero in 1985, to more than 35% in 2016?<\/p>\n

Why have an ever-greater number of U.S. investors entrusted their money, not to experts, but to the assumption that the stock market itself can just take care of their investment?<\/p>\n

These and MANY other questions are answered in Elliott Wave International’s annual State of the Global Markets Report<\/em>. See below for more details.<\/p>\n

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Markets all around the world are at a critical juncture — you must see this free report now.<\/strong><\/h3>\n

This is the fifth year EWI has created our annual State of the Global Markets Report<\/em>. And since many markets around the world are at a critical juncture, this may be the most-timely edition of the State of the Global Markets Report<\/em> yet!<\/p>\n

It comes right out of the pages of their paid publications. For a limited time, you can see this report at no cost.<\/p>\n

Get your 21-page State of the Global Markets Report — 2017 Edition<\/em> now.<\/strong><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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This article was syndicated by Elliott Wave International and was originally published under the headline Active vs Passive Investing: And the Winner Is …<\/strong><\/a>. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By Elliott Wave International The chart below comes from a new report from our friends at Elliott Wave International. It’s as straightforward as it looks — not much need for animation. But, perhaps you’re not completely clear about the difference between passive vs. active funds — or about WHY that difference is even worth talking […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-101057","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101057","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=101057"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101057\/revisions"}],"predecessor-version":[{"id":101058,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101057\/revisions\/101058"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=101057"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=101057"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=101057"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}