Andy Ortiz

Financial Planning Expert

IQ Portfolios 13790 Bridgewater Crossings Blvd., Suite 1080 Windermere 800-558-7969


Q: How active or passive should your investments be managed?

Active and passive are two different strategies investment advisers use to help their clients achieve their financial goals. I’m an Active Investment Portfolio Manager and here’s why:

Active investment portfolio managers make timely buy and sell decisions about the holdings in a client’s portfolio based on market trends, economic changes, political events, and other factors that may affect an asset’s performance. They also achieve other broad-based objectives, such as risk management and income generation.

The beauty of active management is that it offers opportunities to capitalize on mispriced assets, take advantage of short-term fluctuations, and exploit market inefficiencies. Passive management, by contrast, simply replicates the holdings of a predetermined asset allocation.

Let’s look at the 2022 bond sell-off to help you better understand active and passive with a real-world example. In 2022, the Fed increased interest rates rapidly and often, which caused bond prices to plunge. Passive investment managers would have been stuck with depreciating bonds in their portfolios. Active portfolio managers, on the other hand, would have explored other less interest rate-sensitive assets such as cash or T-Bills and made adjustments. The point is, active portfolio managers had options and could react to the situation in any number of different ways. 

What’s the downside, you ask? Good question. Active investment can involve higher costs, such as fees, commissions, taxes, and trading expenses. If your account is subject to trading fees or commissions, ask your investment advisor before opting for active management. Our clients are not charged trading fees or commissions at IQ Portfolios. Instead, trading costs are included in our investment advisory and custody platform fees.

In my opinion, the benefits of active management far outweigh its potential drawbacks. I have greater control over my clients’ investments with strategic customization and targeted market participation. For my clients and for me, it simply makes the most sense

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