Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Hands-Off Investor

What it is:

A hands-off investor has a substantial interest in the management of a company, but chooses not to actively participate in it. It is the opposite of a hands-on investor.

How it works (Example):

A hands-off investor could be a large-scale stockholder who does not, as a matter of choice, play a role in how the concern is managed. For example, a hands-off investor may remain fully-informed of management decisions and company plans, but choose not to intervene or be delegated responsibility. A hands-off investor should not be confused with a hands-on investor, which is an investor with a similar stake who chooses to take a proactive management role.

Why it Matters:

Though a hands-off investor may take a passive stance for a variety of reasons, it is usually because he is content with the current management style and direction in which the company is headed.