'There are two types of investing - passive and active.
With passive investing, individuals deploy a buy-and-hold strategy, creating a portfolio that contains the same funds as an index, trusting that their stocks will generally rise over time. In other words, you invest, you sit back (cross your fingers), and let the market go to work. (Since 2001, a passive buy-hold-strategy of the S&P 500 would have yielded 5.7% annually). With active investing, the individual isn't trying to just keep pace with the market, they're actively (and often daily) trying to beat it.
And tastytrade, a Chicago-based online financial network, wants to kill passive investing.
"We plan to change the culture of investing," says tastytrade co-founder and co-CEO Tom Sosnoff. "Putting money in an IRA, a 401k and just waking up in 20 to 30 years hoping for the best - you learn nothing. You learn nothing about risk. It's not as effective as active investing."
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