Passive Vs Active Management. ETFs Vs stocks or bonds. Why?

authored by
Dimitris Kantzelis
02.02.2021
New to Investing
2 minutes read

We believe traditional asset management is losing ground quickly. For many years asset managers and investors were trying to choose the best stocks and bonds trying to beat the market. Well, unless you are Warren Buffett who is beating the markets constantly for 30+ years it’s unlikely you can beat the market in the long term. Let’s explain further:

It is very difficult for the traditional asset manager or investor to be able to review & monitor thousands of stocks and bonds worldwide deciding which is best for the long term for a given portfolio. This means you are missing out great opportunities from some securities.

Now unless you invest millions it’s very difficult to diversify enough. Most traditional asset managers are able to monitor a small number of securities and you cannot afford buing thousands of them in your portfolio. Well, that’s not the case with us where you can invest in as many as 2,000 securities with much less costs of traditional asset management.

Another important factor is the credit risk. Trying to beat the market constantly will at some point lead to bad decisions with a security. Now what happens if this security represents like 10% or 20% of your portfolio? With us you never need to worry as every single security represents normally less than 1% of your portfolio so any stress events will have very minimal impact in the overall investment.

This document does not constitute and shall not be construed as a prospectus, advertisement, public offering, or placement of, nor a recommendation to buy, sell, hold or solicit, any investment, security, other financial instrument or other product or service. This document is for general information only and is not intended as investment advice or any other specific recommendation as to any particular course of action or inaction.