We here at Pebble Finance are big believers in investing passively.

The concept is deceptively simple: do not try and beat the market.

For 99.9% of investors there is very little chance of doing so and so instead you simply buy a financial product which, ideally, represents the entire market and therefore, roughly speaking, the broader economy.

This delivers, of course, an average return. You have some big winners, some big losers and a lot in between. But, as goes the economy, so goes your portfolio.

The Pebble innovation is to let you buy the whole market while, critically, allowing you to personalize your portfolio to fit your individual circumstances.

Now, the passive investing approach gets more complicated than that - for instance, which market, exactly, are you buying?! But in general this strategy confers several unique advantages:

• The fees are so low they are almost nonexistent.

• You are very diversified and do not need to worry about how an individual company or industry are doing. You own literally everything.

• It takes very little time, stress and effort or expertise on your part.

The latter in particular is ideal. You are invested and gaining the upside of the market's advance but you do not need to worry about monitoring let alone worrying about whether you are exposed to a particular problem or issue.

Passive Investing may seem very obvious today but it was once VERY unpopular and controversial. It was even considered un-American.

Passive investing was pioneered by a man named Jack Bogle and his company, Vanguard. Early in his career Jack took risks trying to beat and the market. This led to a serious collapse in performance and, eventually, he was also fired from his job as CEO of the asset manager, Wellington Management.

Thereafter he decided that rather than try to beat the market he would instead try to own it. He invented the index took a lot of criticism for his trouble. It was, in the words of one notable critic: a” sure path to mediocrity.”

Those critics were nearly all wrong. These days Bogle is a pretty legendary figure. So legendary in fact that there are whole communities that preach his gospel and call themselves Bogleheads. Some of them can be found here or here and here.

The key difference between direct indexing and the Bogle passive investing strategy is that you are not buying a financial instrument but actually the underlying stock in individual companies. This was once a) very expensive and b) complicated but the combination of technology and fee compression now makes it something within the reach of regular retail investors.

That is exciting and, most importantly, opens the door to allowing you to own exactly what you want, hence the focus on personalization.

The problem with buying financial products like a mutual fund or an ETF is that they were great and increasingly cheaper but they were crafted by someone else, not you. So, inevitably, they either reflected someone else's preferences or, more likely, were very generic.

That was fine and also all that was likely possible but technology has opened up many new avenues for personal finance. Along with crowd funding, online banking and mobile payments, direct indexing can make it easier and more personalized to invest passively.

By buying all of the underlying stocks in the index (or fractions thereof) you are gaining exposure to the whole market but are then able to exclude the handful of stocks that your personal circumstances or your personal preferences demand.

Its direct, its safe, its you.

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Have questions? Care to find out more? Feel free to reach out at contact@pebble.finance or join our Slack community to meet more like-minded individuals and see what we are talking about today. All are welcome.