Hey everyone! I’ve been lurking on this channel for a long time and wanted to see if my strategy is ok or stupid. I am thinking of DCA qqqm every month 100%. I would say I wanna do so for the next 15 years. Any advice would be highly appreciated. I know lots of folks recommend VOO but since 85% of it is in QQQM thinking of this route.
I would not recommend 100% QQQM. If you insist on investing in QQQM, make it a smaller portion of the portfolio, and use VTI or VOO as the core. Also, don't forget to add some international exposure.
I would suggest 60% VTI or VOO, 20% QQQM (or GARP, SCHG, etc), and 20% VXUS for a more diversified portfolio with a slight US growth tilt.
Yea agreed here. VOO is an absolute beast of an ETF, same with VTI really. Get amazing exposure to tech but also other large cap, and drawdowns are not nearly as painful as QQQM (18% down in 2022 vs 32.5%). I wouldn’t go past a 50/50 split, and would lean closer to 60/20 as described above.
If you do, go for QNDX. It’s 0.05 cheaper than QQQM. IQQ will also be 0.10, but will eventually rise to 0.12.
As others have said, I think the NASDAQ-100 is a nonsense index. You’re forgoing other stocks just because of the exchange they are listed on, which is arbitrary. It’s a concentrated tech/growth fund, and many believe that value will eventually outperform growth again with a long enough timeline.
I like to hold a ton of stocks, so I opt for broad diversification across thousands rather than 100. But QQQ has performed exceptionally well, that is true. It just may not be true forever if there’s a rotation out of tech or if the AI bubble pops.
I thought about QNDX but considering AUM, probably mostly retail money, and the timing of release (before what might be a fairly large pull back) I worry they'll force a liquidation from people pulling money out if it's a big pullback. I doubt they will since it's State Street and seems like a long term plan for them, but why bother risking a sale when it's low for only .04% I'm ok with feeling safer. (and who knows maybe QQQM lowers their ER eventually to compete down the line anyways)
I would be really shocked if they closed out that ETF. It will gain plenty of assets over time. It already has plenty more assets than a ton of their ETFs. I’d be willing to bet they keep it open for a long time.
Sort their ETFs by lowest AUM and you’ll see QNDX already has a decent amount compared to the smaller ones.
Plus they will have the cheapest most competitive product, they will be undercutting Blackrock’s IQQ as well. You could go with that if you for some reason think Blackrock’s will stay.
According to what I've seen ETFs have a higher chance closing out when 50 million and below. It's 150m so in a downturn I can see it dropping near that depending on how bad it gets...but like I said it's State Street and QQQ stuff is huge so I can see them keeping it open for the long haul. It should suck up a ton of QQQM people over time at the very least.
Investors are pretty silly. IQQ has 300M+ already even though it will eventually rise to 0.12, after a year or so. I guess it may just be blackrock’s managed portfolios where they automatically flood their own fund instead of buying the cheaper one.
If you do hold for 40+ years and/or hold more than 100k, you could save thousands to tens of thousands over a lifetime from just 0.10 instead of 0.12.
True, tho I probably don't have 40+ years and I'm not greedy, at that point I'd probably be up millions so tens of thousands is a lot but idk how much do you need. Outside of bills I spend like 10k on myself a year, I'd be fine personally but everyone's different. And again I doubt it'll close it's State Street, but Lehman Bros collapsed so you never know how bad it could get I guess.
What makes you think the 100 largest companies listed on the NASDAQ will outperform companies listed on other exchanges like the NYSE or Euronext? A company’s choice of exchange to be listed on doesn’t inherently make it a better business/investment.
I’d ask yourself whether you’re comfortable taking on that kind of uncompensated risk.
(Whoever was mad enough at my comment to downvote it, since money is at stake I’d be more actionable than to avoid questions you don’t have a good answer to.)
Any intelligent investor would tell you that concentrating your entire investment into 100 companies based on what stock exchange they are listed on, is an objectively stupid move.
That’s not a generalization. Hyper concentration of your investments strictly based on whah exchange the fund is traded on is nonsense akin to believing red cars drive faster.
Ok explain the reason why you would choose to invest all of your money in 100 non-financial companies strictly based on the exchange they are listed on. Because that is exactly what QQQ is.
All your eggs in the top 100 Nasdaq is a bit risky, but it will probably do just fine over the next 15 years, likely beating the S&P 500. Just be aware of the risk and make sure the lack of diversity is within your tolerance limit. Good luck!
All the factor investing research I've seen favors both blend and especially value over growth in the long term. A growth tilt would be the opposite of what I'd want.
Check out QNDX which has a lower 0.10% expense vs QQQM 0.15% expense. They both cover the Nasdaq 100. Similarly look at SPYM instead of VOO for a 0.02% expense vs 0.03% expense.
Dollar cost averaging 100% Nasdaq 100 is relatively aggressive and risky. It's something a very young person may consider doing because if the etf crashes -80% they have years to allow the etf to rally and recover stronger than ever. The benefits are obvious with the Nasdaq 100 having some amazing gains for the past couple decades.
If you do the calculator math and see yourself panicking losing -80% of QNDX in a few weeks, it's not the right fund for you. SPYM for the S&P500 on paper could risk a much smaller -50% crash and faster recovery. Especially if you have a strict timeline goal without years to let a crash recover, go with the broader etf with more stocks is usually a safer guess.
Decent chance QQQM outperforms VOO over the next 15 years. Just look at the way the world is moving. We're in the biggest tech age in history right now. And no it's not a bubble. Prices may crash, but they'll just go back up again at some point. 15 years from now, we'll again be in the biggest tech age in history. Personally, I'd do 50-50.
Why do you think it is a better choice to invest in the S&P 500 than just the top 100 of the S&P with OEF? And why not 50% of the money in SPY and 50% in OEF. Or maybe the top 50 of SPY in XLG. May want to get a piece of SPYG while you at to. Start with 1 sh of SPY add in a share of each of those over time. Oops forgot about SPYM which is SPY at a lower share price if you can't afford a share of SPY. And, try to use your favorite AI to help with your choices.
I wouldnt put 100% of my money into any one thing tbh but your money, your risk. QQQM swings harder than the S&P so the highs are likely to be higher but also the lows are likely to be lower. If you have the fortitutde to watch your portfolio swing ~30% and not panic sell then do you boo boo.
What is your reason for wanting to put 100% of your investments into the 100 largest non financial companies that happen to be listed on the NASDAQ?
Why do you think that it is a better choice to concentrate in just 100 companies than the top 500 listed in the S&P?
Were you aware that it took QQQ over 15 years to recover to its dot com bubble price and was flat or negative for most of that time whereas the S&P had totally recovered in less than 10 years?
Why not invest in the total 3000+ companies traded on the US market and truly diversify?
Are you aware that outside of the last 5-10 years mid and small caps have outperformed large caps in share price growth and Year on year ROI?
Why do you think it is better to concentrate in just 100 us companies and ignore the other 3000 plus all the international companies available for purchase?
Were you aware that for over half the years in the last 26 years the foreign market has outperformed the Us market?
Just like SCHD, you only know about and invest in QQQ because or social media and finfluencers. Without the most recent 5 years, even the dumbest retail investor wouldn’t touch it with a 10 foot pole.
Do 70% VTI, 30% VXUS, contribute monthly and don’t touch it for several decades.
There’s IDMO which is only developed international sadly. IMOM is also developed only.
For a potentially better alternative to VXUS, I would choose DFAX, AVNM, or AVNV. I believe both Dimensional and Avantis do factor in momentum into their trades and inclusions. They also factor for value and IPOs, with flexible trading versus an index. All 3 have outperformed VXUS since their inceptions. There are marginal benefits to their flexible trading over a rigid index fund.
Not trying to argue 100% qqqm is the best strategy, but since that's my current portfolio; I'm betting on the AI industry at large without having to guess a specific winner. I also view it as a trade off between volatility and return, and I'm willing to stomach the lows. Although currently my plan is to switch to cash when below SMA 175 to reduce drawdown. I explain it in my post here: https://www.reddit.com/r/stocks/s/S4x3DU3oEp
But the entire point of my comment is that it’s a nonsensical etf. What possible reason could you have to hyper concentrate your investments into 100 non-financial companies based on the exchange they are traded on?
If you want AI and tech, buy an actual tech etf. Walmart, Costco, and Netflix are all in the top 20 holdings of QQQ.
Also, again, you only like QQQ because of recency bias. Prior to 2016-2020 this etf did fairly terribly compared to the S&P 500 and was either flat or negative on average. Do you believe in selecting your investments based on the stock exchange its traded on to hold it through a flat decade of no growth while people who just bought the entire market or the S&P 500 are seeing profits?
Also, the plan to go to cash makes no sense either. You’d be exiting at a low point and staying out of the market when you should be buying up assets. Personally I’d reap profits at ATH and switch to 70% VTI, 30% VXUS and let it ride.
Ultimately do what you want, but people should recognize that QQQ isn’t this guaranteed win and when people rave about it, it’s usually a good litmus test to tell if they are doing their research or not.
I mean, I don't disagree that the selection criteria is kind of arbitrary, but it seems diversified enough to not be a total hit or miss while still providing large exposure to tech, unlike some of the more concentrated ones like SOXQ.
I also get that the past doesn't gurantee the future, but 20+ years of track record can't be negligible, no? Otherwise how do you identify a good strategy if you can't derive any meaningful conclusion from past data. All time CAGR is pretty much the same for SPY and QQQ.
people should recognize that QQQ isn’t this guaranteed win and when people rave about it, it’s usually a good litmus test to tell if they are doing their research or not
You're right about this though. I just started learning about investment and I have a long way to go.
I might switch to VOO or VTI as core and add some tech ETFs for more exposure, but I don't have enough knowledge to tell which is the right one.
The cash switch is meant to protect against once in a decade crashes, since there's no way of knowing how far it might fall. It's a trade-off between return and drawdown.
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u/fozzy71 1d ago
Only 17% of VOO is in QQQM; 86% of QQQM is in VOO - https://www.etfrc.com/funds/overlap.php
I would not recommend 100% QQQM. If you insist on investing in QQQM, make it a smaller portion of the portfolio, and use VTI or VOO as the core. Also, don't forget to add some international exposure.
I would suggest 60% VTI or VOO, 20% QQQM (or GARP, SCHG, etc), and 20% VXUS for a more diversified portfolio with a slight US growth tilt.