Active Investor Definition
I use the term Active Investor to identify people who manage their market positions. An active investor not only investigates a stock before buying, but also considers when and why they might sell.
This distinguishes the active investor from the passive investor. The latter often simply invests in a market index, and whatever they buy, they set out to keep for the long term. Hence the moniker “buy and hold”.
Extra Insight:
In an effort to match up to trader types in my backtesting, I estimated that an active investor sticks with a position for about a year.
November 10th, 2008 Filed under GlossaryTags: backtesting, long
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