It seems like not an hour goes by without viewing some sort of "wealth management" commercial on television. But does the passive investing "norm" actually work? This tastytrade pillar argues no.
Apart from reducing market liquidity (due to fewer market participants), passive investing can also be, as Liz Dierking states, "destructive to a person's psyche." In truth, market experts can't predict the future any more than the retail investor can, and oftentimes, passive investing encourages heightened risk with no benefit. By constantly staying exposed to market movement, traders are able to reduce "reactivity" to events while also becoming better informed investors as well as better decision makers.
Still, does the "wing & a prayer program" of passive investing hold any merit? Dylan give his final verdict for the 7th tastytrade pillar.
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