Sports Markets

Darren Rovell joins Tom Sosnoff for a virtual fireside chat on sports betting & trading.

Watch Now

10 Reasons to be a tastytrader

Passive Investing is Destructive to Wealth

10 Reasons to be a tastytrader

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

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.

10 Reasons to be a tastytrader More installments

Latest tastytrade Videos As of August 10

Most Shared From the last 30 days