ETFs
Forget Nvidia: This ETF Could Turn $25,000 Into $1 Million
Nvidia (NASDAQ: NVDA) has generated massive returns for investors in recent years. But the danger of buying shares today is that at an extremely high valuation, you could be limited in the returns you get. While it can still be a good long-term investment, you may be better off putting your money into other growth stocks.
You could even simplify your strategy further by investing in an exchange-traded fund (ETF), which can give you exposure to a wide range of stocks while putting you on the path to generating excellent returns.
A fund with enormous long-term potential
For growth investorsOne ETF that is a popular option is the Invesco QQQ Trust (QQQ -0.52%). It follows the Nasdaq-100 The index gives investors access to the world’s best growth stocks in a single investment. It’s a safer alternative to putting all or even most of your money into a few investments, even if you’re incredibly bullish on them.
With the Invesco fund, you don’t even need to keep up with hot new growth stocks because the Nasdaq-100 is made up of the top 100 non-financial stocks on the exchange. You’ll still get exposure to Nvidia, but on top of that, you’ll also get exposure to Microsoft, Appleand many other top technology stocks.
By investing in the fund, you can put yourself in a good position to beat the markets. Over the past 10 years, the Invesco QQQ fund has generated a total return (which includes dividends) of over 450%, which is well above the return of the QQQ index. S&P 500Comparable returns of 235%. This means that the ETF has averaged a compound annual growth rate of 18.6% over the past decade, well above the S&P 500’s long-term average of around 10%. .
The fund could put you on the path to reaching $1 million
The Invesco ETF can be an ideal option for long-term investors due to the compounding effects and its potential to generate significant annual returns. While a growth rate close to 19% may be a somewhat optimistic expectation for any very long-term investment, even with a much lower average annual return, the ETF could generate considerable wealth for investors who buy and hold .
Say, for example, you invest $25,000 in an ETF. If the average annual growth rate is around 13%, then after a period of 30 years it will reach a value of almost a million dollars. If you are able to invest $30,000, it will take you less than 29 years to reach $1 million. And if you can invest additional funds over the years, it can help accelerate your gains.
Invesco ETF is a good default option for investors
If you don’t know what to invest in and are worried that hot stocks like Nvidia have become too expensiveThe Invesco ETF may be a great option to consider investing in. It has a low expense ratio of 0.2% and it offers you an easy way to invest in the world’s best growth stocks.
Even if you don’t have a lot of money to invest today, you can periodically increase your investment each month or year to build your position over time. And whether the ETF is up or down when you invest, it’s likely to perform well over the long term, and that’s ultimately what matters most.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Apple, 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 Motley Fool has a position in the stocks mentioned and recommends stocks of Apple, 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. disclosure policy.