ZALIS GLOSSARY: passive-management
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An investing strategy that mirrors a market index and does not attempt to beat the market. Also known as "passive strategy" or "passive investing."
Notes:
Followers of passive management believe in the efficient market hypothesis. It states that at all times markets incorporate and reflect all information, so stock picking is futile. As a result, the best investing strategy is to invest in an index fund. This is the opposite of active management.