2 min

August 15, 2022 - In A Nutshell

Aug 18, 2022
in a nutshell
  • New data on inflation shows some hopeful signs of price increases slowing.
  • Historically, passive investors have consistently outperformed active investors.
  • Consider setting or boosting your Recurring Investment by $5 for the opportunity to take advantage of market movements.
Image of Your weekly round-up of  money news and what it means for your long-term financial wellness for the week of August 15, 2022.
in a nutshell
  • New data on inflation shows some hopeful signs of price increases slowing.
  • Historically, passive investors have consistently outperformed active investors.
  • Consider setting or boosting your Recurring Investment by $5 for the opportunity to take advantage of market movements.

In the Markets

New data on inflation shows some hopeful signs of price increases slowing. Last month, energy prices like gas and utilities saw their biggest drop since April, 2020.

Take a look at the investing approaches below, and our example, as you navigate your money management.

Passive vs. active investing

Passive investors

  • Typically invest in diversified funds aimed at long-term growth

  • Less hands-on with the daily management of buying, selling, and trading

  • Committed to time in the market vs. trying to time the market

  • Historically, have outperformed active investors (see below)

Active investors

  • Typically invest in, sell, and trade more single stocks

  • Need to stay on top of daily market moves

  • Likely to have a higher risk tolerance than passive investors



Beating the market in 2022

Historically, passive investors have consistently outperformed active investors. Let's take a look at three hypothetical investors, based off of the 2022 performance of the S&P 500.

Investor A invested $1,000 in one lump sum in January and then held. They didn’t invest more or sell anything. As of the end of July, their investment is worth $866.

Investor B invested $1,000, broken up into 4 monthly investments between January and April. But, after the market volatility in April, Investor B got nervous and sold, leaving them with $910 (a $90 loss they can’t recover).

Investor C invested $1,000, broken up into 6 monthly investments from January through July. Investor C now has $961 invested, with the chance to recover and grow over time.

By resisting the urge to panic, and setting an automatic Recurring Investment, Investor C has the most money. In fact, through passive investing, they BEAT the market by almost 10% — and have the best chance for maximizing their investments long term.

The numbers don't lie. Consider setting or boosting your Recurring Investment by $5 for the opportunity to take advantage of market movements.




This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Article contributors are not affiliated with Acorns Advisers, LLC. and do not provide investment advice to Acorns’ clients. Acorns is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.

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