Nasdaq 100 - Why not ?

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scotbogle
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Nasdaq 100 - Why not ?

Post by scotbogle »

Hello,

I've read a couple of negative opinions about the Nasdaq 100 ETF. Would you invest in this index or not ? And why ?

Thanks.

Scot
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Taylor Larimore
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Re: Nasdaq 100 - Why not ?

Post by Taylor Larimore »

scotbogle wrote:Hello,

I've read a couple of negative opinions about the Nasdaq 100 ETF. Would you invest in this index or not ? And why ?

Thanks.

Scot
Scott:

It is less risky to invest in the Total U.S. Stock Market (3,684 stocks) which includes the Nasdaq 100 stocks.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
steve_14
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Re: Nasdaq 100 - Why not ?

Post by steve_14 »

Unless you know something about Nasdaq 100 stocks the market doesn't, better to own the whole market. Diversification is a free lunch.
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Imperabo
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Re: Nasdaq 100 - Why not ?

Post by Imperabo »

I wouldn't, because I don't have any special knowledge that isn't available to the rest of the market telling me that large, tech companies will outperform their valuations.
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cfs
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Re: Nasdaq 100 - Why not ?

Post by cfs »

Testimonial from an original Quebes investor.

My recommendation is to invest your dollars in something better. In 1999 I invested some of my Vegas money in the original Quebes, that was when the NASDAQ was smoking the competition, and those times were different. It was supposed to be a slam dunk. But then came the dot com bubble and the NASDAQ was no longer the darling of Wall Street and those times were no longer different. And then I finally did the right thing, selling for TLH.

Thanks for reading.
~ Member of the Active Retired Force since 2014 ~
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greg24
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Re: Nasdaq 100 - Why not ?

Post by greg24 »

It is an undiversified sector bet on tech. Buy it if you want. I wouldn't.
Jim180
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Re: Nasdaq 100 - Why not ?

Post by Jim180 »

A year or two ago Apple made up a huge percentage of the Nasdaq 100. I'm not sure what the percentage is now. 100 stocks seems too concentrated to me although I realize some mutual fund managers might hold as few as 20-25 stocks their funds. I much prefer VTI in the world of ETF's.
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CyberBob
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Re: Nasdaq 100 - Why not ?

Post by CyberBob »

Are you also considering the NYSE composite index, which measures the performance of only stocks listed on the New York Stock Exchange?

If not, then forget the NASDAQ ETF.

They're both kind of silly indexes since the common theme of both is stocks that trade on a particular exchange. Why does that matter? Not a good way to build an index or invest. Stick with VTSMX/VTSAX/VTI

Bob
CanyonCitySteve
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Re: Nasdaq 100 - Why not ?

Post by CanyonCitySteve »

Scott, the risk on QQQ is a higher than VTI; but the returns are recently better than SP500 (3,5,10 years) (source: Morningstar). If you go back 15 years, SP500 has a bit higher return due to tech bubble bursting.

So, depends on you: your taste for risk/reward, what you think will happen in the future, and how much of your dough you want to invest (or some would say, bet)....

But it would be decidedly un-Bogle-ey
It is in the uncompromisingness with which dogma is held and not in the dogma or want of dogma that the danger lies. | --Samuel Butler
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dmcmahon
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Re: Nasdaq 100 - Why not ?

Post by dmcmahon »

CyberBob wrote: They're both kind of silly indexes since the common theme of both is stocks that trade on a particular exchange. Why does that matter? Not a good way to build an index or invest.
+1

If you want to make a sector bet on tech, why would you use a basket of stocks, some of which are non tech companies that happen to trade on the Nasdaq and that excludes tech giants that trade on the NYSE and elsewhere?
er999
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Re: Nasdaq 100 - Why not ?

Post by er999 »

Bumping this old thread to show how difficult predictions are —from 2014 (at the time of this thread creation) until now $10k would have grown to $27k (which is an amazing return itself) in total market vs $44k from the nasdaq 100 in qqq.
pension4ever
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Re: Nasdaq 100 - Why not ?

Post by pension4ever »

er999 wrote: Fri Apr 08, 2022 4:51 pm Bumping this old thread to show how difficult predictions are —from 2014 (at the time of this thread creation) until now $10k would have grown to $27k (which is an amazing return itself) in total market vs $44k from the nasdaq 100 in qqq.
Or better yet, 10k in TQQQ in 2014 vs total stock lol the former would have made it 225K but like always hindsight is 20 20 😒
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xraygoggles
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Re: Nasdaq 100 - Why not ?

Post by xraygoggles »

Investing in a certain exchange seems kinda weird - I'd rather invest in VUG which actually tracks an index (CRSP US Large Cap Growth Index). There are also more stocks in VUG (265) compared to QQQ (100).
Simplicity is the key to brilliance - Vti & chill.
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CyclingDuo
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Re: Nasdaq 100 - Why not ?

Post by CyclingDuo »

er999 wrote: Fri Apr 08, 2022 4:51 pmBumping this old thread to show how difficult predictions are —from 2014 (at the time of this thread creation) until now $10k would have grown to $27k (which is an amazing return itself) in total market vs $44k from the nasdaq 100 in qqq.
It's one way to tilt the top technology companies already in VTI, no doubt about it.

The current top 10 holdings (which make up 53.35% of the QQQ ETF) show why the returns have been so good since 2014...

1. Apple Inc Allocation: 12.57%
2. Microsoft Corp Allocation: 10.11%
3. Amazon.com Inc Allocation: 7.18%
4. Tesla Inc Allocation: 4.89%
5. Alphabet Inc Class C Allocation: 3.85%
6. NVIDIA Corp Allocation: 3.81%
7. Alphabet Inc Class A Allocation: 3.66%
8. Meta Platforms Inc Class A Allocation: 3.45%
9. Costco Wholesale Corp Allocation: 2.00%
10. Broadcom Inc Allocation: 1.83%

https://www.invesco.com/qqq-etf/en/about.html
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
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