ETFs
1 Simple ETF to Buy Now for Under $500
Ultimately, it’s not the stock market or even the companies themselves that determine an investor’s fate. It’s the investor.
— Peter Lynch, “One Up on Wall Street”
Investing is about making decisions. There are thousands of stocks and related products to choose from, and successful investing is all about making the right choices and following a plan of action.
This is why I like exchange traded funds (ETFs). They offer the possibility of easily investing in a basket of stocks, thus helping to diversify your portfolio. Plus, many do all this at low cost.
Let’s look at an ETF that I think is an obvious buy at the moment.
What is Invesco QQQ trust?
THE Invesco QQQ Trust (NASDAQ: QQQ) is a ETFs which follows the Nasdaq100an index composed of the largest non-financial stocks listed on the Nasdaq exchange.
Both the ETF and the underlying index are heavily weighted in the technology sector, and the fund’s top holdings include Microsoft, Nvidia, Apple, AmazonAnd Meta Platforms.
How has Invesco QQQ Trust performed?
Let’s get straight to the point: this fund has been an exceptional investment. Over the past 20 years, the ETF has delivered a total return of over 1,400%, which equates to annual growth of 14.5%. An initial investment of $1,000 in 2004 would have grown to almost $15,200 today.
QQQ Total Return Levels Chart
Compare this to S&P500, which generated an annual total return of 10.2% over the same period. THE Dow Jones Industrial Average also failed to keep up with an annual return of 9.2%, and the Russell 2000 the index lagged even further with a return of 8.1%.
QQQ Total Return Levels Chart
Over a long-term period, such as 20 years, these differences in annual returns translate into significant differences in the value of your investment.
Is Invesco QQQ Trust a Buy Now?
The growth of technology and how it has changed the lives of billions of people is the story of our lives, and this narrative is not going to change anytime soon.
As a result, technology companies will remain among the biggest market winners for decades to come, but not all companies will thrive, or even survive. This is one of the main advantages of investing in an index fund. The Invesco QQQ Trust holds 101 stocks, and this diversification allows the winners to balance out the losers, helping the overall ETF grow over time.
In short, the Invesco QQQ Trust is a solid choice worth considering for any investor who wants exposure to growth stocks in their portfolio.
Should you invest $1,000 in Invesco QQQ Trust right now?
Before purchasing shares of Invesco QQQ Trust, consider this:
The story continues
The Motley Fool Stock Advisor analyst team has just identified what they believe to be the 10 best stocks for investors to buy now…and Invesco QQQ Trust was not one of them. The 10 selected stocks could produce monster returns in the years to come.
Consider when Nvidia made this list on April 15, 2005…if you had invested $1,000 at the time of our recommendation, you would have $671,728!*
Stock Advisor provides investors with an easy-to-follow plan for success, including portfolio building advice, regular analyst updates, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of the S&P 500 since 2002*.
*Stock Advisor returns as of June 3, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jake Lerch holds positions in Amazon, Invesco QQQ Trust and Nvidia. The Motley Fool holds positions and recommends Amazon, Apple, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends Nasdaq and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Mad Motley has a disclosure policy.
1 Simple ETF to Buy Now for Under $500 was originally published by The Motley Fool