http://seekingalpha.com/article/1951921 ... e-investorWhen passive investors buy an asset class, they buy at whatever price the seller asks. And when they sell, they sell at whatever price the buyer offers. The "passive" is not about the choice of assets - again, someone has to choose them - it refers instead to passively accepting whatever price the market happens to set for those assets. In contract, an active investor considers a stock and its price and decides whether to buy, sell or hold.
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I believe many "active" retail investors today are simply people who have completely lost faith in the market. Passive investing - buying small pieces of thousands of securities we know nothing about at whatever price the seller sets in the hope that down the road we can sell them to someone else for a profit to fund our retirement - does not sound like a good plan. Graham and Buffett and Lynch, among others, offer for an alternative that makes sense to us. Buy quality companies at reasonable prices and watch them grow. Ignore (or exploit) the price fluctuations - focus on the company and its ability to generate earnings. And as a direct corollary, don't focus on achieving a superior total return to some benchmark.
What's the best argument against this?