Cardano Index Token

Cardano Index

The Cardano Index token is the first of many financial products MAYZ is planning to provide. MAYZ is a protocol that will allow multiple Indexes to be launched. Each index will have its characteristics; some of them, like the Cardano Index, will represent passive investment strategies (PIS), and others may represent more active ones.

Cardano Index aims to follow the Cardano ecosystem value creation process. This fund will maintain a well-diversified Cardano basket of tokens to achieve that. The Index funds will track a target benchmark rather than seeking winners so that it will avoid constantly buying and selling tokens. As a result, it will have lower fees and operating expenses than a more active fund.

Passive investing via indexing is an excellent way to achieve diversification. Index funds spread risk broadly in holding all offers simplicity as an easy way to invest in a chosen market because it seeks to track an index.

Passive Investment Strategy

In traditional finance, a known investment strategy called buy-and-hold is the opposite of more active strategies based on technical analysis and frequent trading.

Active strategies tend to seek to profit from short-term price fluctuations or market timing, trying to beat the market. Beating the market means getting a greater return than the market as a whole.

Numerous academic studies show that it is impossible to beat the market systematically when particular market efficiencies are met. Other more descriptive studies show that neither the most successful hedge fund beat the market systematically.

So most investment strategies are passive, which means that instead of beating the market, the goal is to follow it, to replicate the whole market as accurately as possible. PIS tries to match the market or sector performance. Passive investing attempts to replicate market performance by constructing well-diversified portfolios of single assets.

Its introduction in the 1970s made achieving returns in line with the market much more straightforward. In the 1990s, exchange-traded funds, or ETFs that track major indices, such as the SPDR S&P 500 ETF (SPY), simplified the process by allowing investors to trade index funds as though they were stocks.

To see more about this subject, we recommend reading this bibliography: A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing - Burton G. Malkiel (Author)