Passive investment strategies involve buying and holding a diversified portfolio of assets, such as stocks or bonds, with the goal of matching market performance rather than trying to outperform it. This approach typically uses index funds or exchange-traded funds (ETFs) that track specific market indices, like the S&P 500. Investors who adopt passive strategies often benefit from lower fees and reduced trading costs compared to active management. Since these strategies require less frequent buying and selling, they can also minimize the impact of market volatility and taxes on investment returns over time.