A comparative assessment between active and passive investment funds

Abstract

In 1776 Adam Smith introduced the world to the concept of the invisible hand, a profound idea that described the benefits that were produced for society by the market economy if things were left unintended. Since then, free markets have dominated the global economy and presented the world with far more alternative uses for the scarce resource called capital. This in a highly intertwined world, led money become the measure of everything and a means to an end for most affairs. As long as money retains its current status the importance of it will be significant to the life quality of modern era people. The scope of this study is to offer the reader solid evidence on what has been empirically proven true in the financial markets regarding the act of investing. The investing approach adopted is characterized by the constant priority to preserve the capital pool by assuming minimum risk with the intention of achieving satisfactory results compared to the overall market returns. Finally, our viewpoint will be that of the common investor meaning a person that has little to no experience in the financial markets symbolizing the great sum of people.