What Is Passive Investing?
If a company is 3 percent of the market, it is 3 percent of the passive portfolio.
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1.How did Sharpe define a passive investor in 1991?
If a company is 3 percent of the market, it is 3 percent of the passive portfolio.
2.What do passive funds seek, per FINRA?
Passive funds are often called index funds because they follow an index; passive does not mean without risk.
3.Before costs, how does the average active dollar compare with the average passive dollar?
The market is the sum of both groups, so active dollars must also average the market return before costs.
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Sources (6)
- Sharpe, W. F.: The Arithmetic of Active Management, Financial Analysts Journal 47(1), Jan./Feb. 1991, S. 7-9
- Grossman, S. J., Stiglitz, J. E.: On the Impossibility of Informationally Efficient Markets, American Economic Review 70(3), June 1980, S. 393-408
- FINRA: Mutual Funds (Investment Products)
- Eigene Rechnung: 10.000
- Exposé Folge 216 (05_szenen/exposee_v1.json)
- Eigene Berechnung (synthetischer Drei-Unternehmen-Markt)
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