Passive Investment

A passive investment is an investment which requires little or no involvement on the part of the investor.

As opposed to active investments such as investments in a business or other income-generating activity which requires active involvement on the part of the investor, passive investments earn returns on their own.

Examples of passive investment vehicles include savings accounts, bonds, medium-term notes, buy-and-hold stock investments and exchange traded funds (ETFs).

See also: Passive investing

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Daniel Dreier is editor and personal finance expert at moneyland.ch.

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