Active vs. Passive Assets
As mentioned before, passive assets are assets that produce income for your business passively.
In contrast to this, active assets are assets that are needed for daily business operations. They quickly flow in and out of business, while passive assets typically stay within the company for more extended periods.
Active asset management, or active investing, is an investment strategy that aims to outperform the market through actively managed funds and ETFs. This asset management typically requires constant attention instead of passive investment, which only requires occasional monitoring.
Active investing possesses advantages such as flexibility in volatile markets, expanded trading options, and tax-loss harvesting.
On the other hand, passive investing gives businesses benefits such as higher average returns, lower costs, decreased risks, and increased transparency.
Read our separate article about the differences between active and passive assets to better understand how these assets can help your business and which is best for you.
