Why Investors Ought to Consider Passive Investments for Saving

I consider myself a saver when it comes to investing. That is, I view investing largely along the lines of securing any liquid assets I own against the negative long-term effects of depreciation; in this regard, investing is perhaps one of the only means of preserving one's wealth and savings over time.

Conceding the idea of "beating the market" can be a difficult one for many investors who are constantly seeking alpha, or a positive return over and above the risk free rate, but I am stingy. Accepting little risk in exchange for returns which meet, or preferably exceed, inflation is the stated goal in my case.

In this context, investing in relatively secure and defensive investments is the name of the game, and evidence shows that handing one's money over to active managers tends to provide mediocre returns to "savers" over time.

The advantages of rock bottom fees to passive investors who make the conscious choice to move their investments into passive products is undeniable.

Fees detract from one's returns over time, generally meaning those who wish to store cash or other liquidity away for a rainy day are doing themselves a disservice by trying to beat the market.

Choosing an ETF or other low cost product to put one's savings into is not a losing strategy, and should be considered by investors seeking to truly preserve their wealth over time.

As with any investment, remember to consult a financial advisor before making any decisions, but also consult the numerous empirical studies that underscore the value of such passive investing methods.

Invest wisely, my friends.