asset vs index in stock market
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1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
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Asset vs. Index
Definition:
Asset: A single financial instrument (e.g., stock, bond, ETF) representing ownership or debt. Example: Apple shares.
Index: A benchmark tracking a group of assets (e.g., S&P 500 for top U.S. stocks).
Purpose:
Asset: Direct investment in a company/security; returns depend on its performance.
Index: Measures market trends; used as a reference or for passive investing (via index funds).
Risk & Diversification:
Asset: Higher risk (concentrated exposure).
Index: Lower risk (diversified across multiple assets).
Performance:
Asset: Volatile; tied to company-specific news (earnings, management).
Index: Reflects broader market sentiment (e.g., economic indicators).
Investment Approach:
Asset: Active trading/stock-picking.
Index: Passive strategy (e.g., index funds mimic performance).
Example: Buying Tesla stock (asset) vs. investing in NASDAQ-100 (index