Is Passive Investing Still a Good Idea?

For over a decade, passive investing could do no wrong.

Buy an index fund.
Sit tight.
Ignore the noise.

Markets went up. Liquidity was plentiful. Volatility was muted. And anyone who questioned passive investing was told they were “overthinking it”.

But markets change.

And right now, many investors are quietly asking a very reasonable question:

Is passive investing still a good idea?

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Why People Are Asking This Now:

Because markets feel different.

Volatility is back.
Leadership is rotating.
Macro headlines move prices daily.
And markets are spending more time going sideways than marching higher.

In that environment, passive investing behaves very differently.

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When Passive Investing Works Best:

Let’s be clear, passive investing does work.

It works best when:

• Markets trend steadily higher
• Volatility is low
• Central banks are supportive
• Correlations are high

In those conditions, buying the index and holding it makes sense.

The problem?
Those conditions are not guaranteed, and historically, they’re the exception, not the rule.

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Where Passive Investing Struggles:

Passive investing struggles when markets:

• Move sideways for long periods
• Whipsaw on headlines
• Experience sharp drawdowns followed by violent rebounds
• Rotate leadership between sectors and styles

In those environments, passive investors are:

• Fully exposed on the way down
• Fully exposed during false rallies
• And often waiting years just to get back to breakeven

No defence.
No flexibility.
No decision-making.

Just hope.

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Why Active Investing Has a Role Again:

This is where active strategies re-enter the conversation.

Active investing isn’t about day trading or guessing headlines.
It’s about adapting exposure to market conditions.

At TPP, this is exactly why we run strategies like Long or Flat.

When markets are trending positively → stay invested.
When conditions deteriorate → step aside.

No ego.
No predictions.
Just rules.

In volatile or sideways markets, that flexibility matters.

A lot.

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Passive vs Active Isn’t Either/Or:

This isn’t about abandoning passive investing altogether.

It’s about recognising that:

• Passive is not always optimal
• Market conditions change
• And portfolios should adapt accordingly

For many investors, the smarter question isn’t “passive or active?”
It’s “how much of each, and when?”

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Final Thought:

Passive investing had a golden run.

But markets don’t owe anyone a straight line.

If the next decade looks more volatile, more unpredictable, and more headline-driven than the last, relying purely on passive exposure could be an expensive mistake.

Understanding when to be invested, and when not to be, is becoming just as important as what you invest in.

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Your Next Step:

👉 Book a FREE portfolio strategy call to see how active strategies could fit into your portfolio....Click here

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👉 Or grab a FREE copy of the Amazon best-selling book

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Why Your Wealth Manager Is Robbing You Blind....The book the industry hopes you'll never read.... Click here.

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Because in volatile markets, doing nothing is still a decision.

And often, not a great one.

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Have a great week in the markets and let us know if you think we can assist.

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