Passive Investor Definition
An investor who does not play an active role in the business. He or she invests in the company or in securities but does not actively contribute to management. Passive investors purchase investments with the aim of long-term appreciation and limited maintenance. They do not attempt to profit from short-term price fluctuations, because they believe that the investment will make a profit in the long term. Passive investors may deduct investment losses only if gains from such investments exceed their losses.