What Is Passive Indexing?

By Anders Bylund – Updated Nov 9, 2025 at 11:12 PM EST

Key Points

Passive indexing mirrors market indexes, offering a cost-effective, steady investment strategy.
This approach minimizes risks and taxes by holding diverse assets over long periods.
To use passive indexing, choose funds that match your risk tolerance and investment goals.

Investing in the stock market might seem like a thrilling, high-octane race, but there are ways to enjoy the ride without sudden twists and unexpected turns. Arguably the safest of all possible strategies is passive indexing -- the tortoise in the investment race that often outperforms the unpredictable hares in the long run. Here's what this slow-and-steady strategy is all about and why you should know the basics.

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Buy & Hold Strategy

A buy-and-hold strategy in investing entails buying stocks or other securities and not selling them for long periods of time, sometimes decades.

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What You Need to Know About Active vs. Passive Investing

Some don't want to get in the weeds of investing, but others do. Each approach has its own investment style.

ETF vs. Index Fund: What's the Difference and Which Should You Choose?

Your investment style can dictate which kind of fund is best for your portfolio.

Index Funds vs. Mutual Funds: Which Should You Choose?

Index funds and mutual funds both pool investors' money to buy many different securities. Learn how these investments work.

How to Invest in Stocks: 7 Steps to Get Started

Are you ready to jump into the stock market? We've got you. Build long-term wealth using The Motley Fool's market-beating method.

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About the Author

Anders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.

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Anders Bylund has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.