What is a market index?

The power of passive investing is that it gives you cheap and efficient access to the market. It does this by tracking the performance of an index.
For most investors, this will make sense even on a superficial level. Well-known indices like the FTSE 100 or the S&P 500 are part of the public consciousness. There will be very few people who do not at least appreciate that they represent the UK and US stock markets respectively.

Holding US stocks and estate planning considerations

According to the American Chamber of Commerce Ireland, there are over 160,000 Irish people directly employed by roughly 700 US multinationals in Ireland. Share based compensation is a common way for these employers to provide additional rewards to attract and retain talent. This often results in employees holding significant US shares in their investment portfolios. This has two major risks:
Estate planning risk
Single stock risk

Glass half full or empty

The turmoil of 2020 will leave investors with many lessons. The most significant of those may be that the biggest risks to markets are always the ones we don’t see coming. There are, however, many more subtle things to learn from last year as well. The extremes in markets, from the lows in March to the astonishing surges in shares like Tesla, have shown how unpredictable things can be in the short term.