Strategy
Passive Management takes advantage of the global market's ability to efficiently price the value of public-held companies. When companies are fairly valued it becomes increasingly difficult to earn above-average returns by seeking unpriced securities.
Active Management, what most consider the traditional approach to asset management, relies on this continual search for unpriced securities. If the active investor is successful in accurately identifying undervalued companies then the potential for outperforming the market exists.
But in reality the ability to outperform the market is extremely difficult. So difficult in fact, that it is a bet not worth taking.
Instead of relying on stock selection and market timing to generate returns, passive management seeks to earn market returns. And index funds are the most efficient way to capture market returns.
Index funds own all or most of the companies that comprise a specific section of the market. Today there are index funds for almost every section of the global stock market.
Armuth Asset Management designs each client's portfolio using index funds. The result produces more reliable returns with less volatility than what is available with active management.
