Passive investors, those who put their money into an asset and leave it be, are looking like the smart guys now that fees charged by the asset management industry are coming under fire. Not only that, but active management has underperformed ETFs and other passive investment plans as seen in the chart below.

As far as Ghana is concerned I am unaware of any ETF tracking the Ghana Stock Exchange Composite Index (GSE-CI). And even if there were, I don’t think it would be attractive to investors because the GSE-CI was down 13% in 2015 and is down 8.5% so far this year. Investment in t-bills would be better, as the 91-days rate is at a generous 22%. However the best performing mutual fund is returning an impressive 37.86%.

Personally, I am a fun of passive investing.  But at this stage of my life with little in assets and hopefully a long career ahead I have no choice than to be an active investor. And I am sure it is same for many other people.

This is not to say that many people are actively trading their capital. What is happening is that people are taking decisions everyday on whether to start a business, to further their education, to seek a certification, to get married, to take a mortgage, to seek a gym subscription, to buy a car, and so on. All of these are investment decisions. We’re investing in improving our future earnings capacity and our overall well-being. Some of them will pay off well, others will not.

Since we’re all engaged in this active investment, it is even more important that we hedge our bets by picking a safe investment for when we can no longer make these calls. By that I mean a defined-benefits pension plan and an insurance policy. It is also important to seek professional financial advice – preferably on a one time payment basis – which explains the financial packages and implications to you so you can decide on what best works for you.

Good luck.