Passive investor is when you invest your money in an instrument, but do not handle it directly. If you buy a mutual fund, you are passive because it leaves the handling to the investment manager. You are not involved in selecting asset classes such as stocks, bonds, precious metals, or other commodities, weighting each asset, or determine when to sell and buy these assets.
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The term also refers to when you adopt a buy-and-hold portfolio strategy for the long-term investment horizon. You relatively rarely trade in the market to avoid limited performance. You are not looking for profits from short-term price fluctuations, but you prefer to build wealth gradually.
