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Hands-Off Investor

What is 'Hands-Off Investor'

An investor who prefers to set an investment portfolio and make only minor changes for a long period of time. Many hands-off investors use index funds or target date funds which make only small and slow changes to their holdings, and therefore do not require much monitoring.

Explaining 'Hands-Off Investor'

A hands-off investment strategy is well-suited to many retail investors who may not have the time needed to routinely monitor and research their investments. Hands-on, active management requires investors to continuously keep up-to-date on the positions that they hold. This often requires several hours of research per week. Active managers believe that by doing this work, they can earn higher-than-average returns on their investments.


A hands-off strategy is not necessarily underperforming. Many investors believe in an indexing approach, which posits that sticking with a well-diversified portfolio over the long term is the key to wealth. Since index funds often have very low expense ratios, hands-off investors often enjoy a built-in advantage over active traders who pay more in trading commissions, lose out to the bid-ask spread and incur the higher tax rates on short-term capital gains and nonqualified dividends.


Further Reading


Selection and support strategies in venture capital financing: high-tech or low-tech, hands-off or hands-on?
www.tandfonline.com [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

Hands off hedge fundsHands off hedge funds
heinonline.org [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

Hands off my brand! The financial consequences of protecting brands through trademark infringement lawsuitsHands off my brand! The financial consequences of protecting brands through trademark infringement lawsuits
journals.sagepub.com [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

Hotels to OTAs:“Hands off my rates!” The economic consequences of the rate parity legislative actions in Europe and the USHotels to OTAs:“Hands off my rates!” The economic consequences of the rate parity legislative actions in Europe and the US
www.sciencedirect.com [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

Credit Rating Immunity-How the Hands-Off Approach toward Credit Rating Agencies Led to the Subprime Credit Crisis and the Need for Greater AccountabilityCredit Rating Immunity-How the Hands-Off Approach toward Credit Rating Agencies Led to the Subprime Credit Crisis and the Need for Greater Accountability
heinonline.org [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

European defence firms: The information barrier on private financeEuropean defence firms: The information barrier on private finance
www.tandfonline.com [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

Bank-based versus market-based financial systems: A growth-theoretic analysisBank-based versus market-based financial systems: A growth-theoretic analysis
www.sciencedirect.com [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

The active construction of passive investors: roboadvisors and algorithmic 'low-finance'The active construction of passive investors: roboadvisors and algorithmic 'low-finance'
academic.oup.com [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …

Private equity-financing with anticrisis odourPrivate equity-financing with anticrisis odour
dk.upce.cz [PDF]
… On the basis of previous research we expect an early stage investor to have a … the less he or she invests in high-tech ideas compared to international investing companies … able to show that venture capitalists with more specific knowledge support more hands-off than generalists …


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