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Active portfolio management versus passive portfolio management

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There are many different types of strategies and techniques to manage your investing from stock selection to trade management and exiting. Depending on market conditions, investors need to have flexibility in their strategies, be ready to react if the market should change quickly which is difficult to manage when you’re not a full-time investor.
Enter Jaaims, your active portfolio management technology (APMT) provider which not only analyses the market to determine buy and sell positions but executes and manages your portfolio for you in real-time.

So, what is APMT?

Active Portfolio Management is when you actively monitor and make investment decisions in the aim of beating the market. The market is generally measured through the indexes you trade in such as ASX200, S&P500 etc. Active management is where the big boys play, which can result in huge returns but also can leave you licking your wounds in a pool of losses!On the flip side there is, passive portfolio management or index fund management which is when a portfolio is on ‘autopilot’. These types of funds can be structured as an exchange-traded fund (ETF), a mutual fund, or an investment trust or simply by buying a group of individual stocks and holding for a long period of time. Micro-investing sites often take this approach where small donations/amounts are added to your account and collectively traded in one of these funds with multiple investors.

Because this investment strategy is not active, the management fees on passive portfolios or funds are often lower (less time required) than active management funds, but you will never beat the market, as you will generally remain in-line with the market or like the events of the last two weeks in the negative!

So, as an investor you need to evaluate what strategy works best for your situation. Jaaims offers the ability to have an active fund without the time required to manage actively which could mean beating the market with less work and less fees as you are only paying brokerage and Jaaims’ low monthly subscription fee (subject to the plan you choose).

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