Passive. We don’t change the allocation mix based on any alpha views, attempting to beat the benchmark, or anything that isn’t simply rebalancing with the goal of tracking the performance of the market.
99% of active managers fail to beat the market, and instead they end up underperforming because of the fees they’ve charged you for their “expertise.” There is broad consensus that generally, investors should hold the market, not try to beat it. As a passive investor, your two primary strategies are diversification and reducing fees.
With OpenInvest, for the first time in history, people can wield their assets as activist investors, while holding a passive portfolio.
Transcript
There are two ways to invest in the stock market: active investing and passive investing. OpenInvest only engages in passive investing and here's why: there's now broad consensus that passive investing is a better way for the vast majority of people to invest resulting in better returns over time. Passive investing maximizes diversification, therefore, minimizing risk while slashing fees and reducing taxes. Meanwhile on the active side despite all the glossy brochures you just have to look at the statistics. Ninety-nine percent of active managers fail to beat the market once you take out their fees. It's because active managers bring in a whole lot of human bias, error, and all kinds of companies specific risks that nobody can predict. Meanwhile, they're charging you much higher fees and those compound over time eating away at performance and potentially costing you hundreds of thousands of dollars over your lifetime.
Now in the past, if you had a special view like you don't want to invest in weapons companies you had to go out and hire an active manager to do it for you, but in return, you're paying those high fees, and you're getting the spotty performance. Fortunately, OpenInvest technology has created a breakthrough. When you sign up for open invest, you answer a few questions about your finances and the things you care about we then create a diversified passive portfolio for you that is fully tailored to your particular values. For the first time in history, it means anyone can be a social activist investor acting on the things that they care about in the world while always having a passive portfolio. You can even divest or invest from individual companies with a swipe, and your portfolio will automatically rebalance to keep you passive and tracking the performance of the market via a large-cap index. No compromise is necessary it's easy, so if you care about making money let alone the world, it's just a better way to invest.
