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11Alexandr11 [23.1K]
2 years ago
15

Someone who invests in the vanguard index 500 mutual fund would most accurately be described as using which approach?

Business
1 answer:
Ede4ka [16]2 years ago
8 0

Answer:

Passive investment

<h3>What is Passive Investment?</h3>
  • Passive investment refers to an investment strategy used by investors to increase their returns by selling and buying.
  • Investors use this investment strategy to prevent some fees and cut out limited performance that may likely accompany regular trading.

Some of these benefits include:

Transparency: investors do know the assets in an index fund

Extreme low fees: monitoring is not necessary simply because no one is picking stocks

Tax efficiency: this strategy does not lead to a yearly tax of massive capital gains since passive investors only buy and hold.

Simplicity: Owning an index is very easy to implement and understand when compared to a dynamic strategy that involves regular adjustment and research.

To learn more about it, refer

to brainly.com/question/26386481

#SPJ4

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