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1.

Want to Get Your Portfolio to $1 Million by Retirement? Here's How Much You Should Aim to Invest Based on Your Age.

2024-02-20 11:49:00 by David Jagielski, The Motley Fool from Motley Fool

Planning to grow your portfolio to $1 million by the time you retire can be a great goal. And while it can seem like a daunting one, it's easier to accomplish that target if you start your investing journey early. Conversely, the later you start, you'd need to invest more to reach the same objective in order to make up for lost time.

With many good exchange-traded funds (ETFs) focused on growth and which can generate strong long-run returns, picking a place to invest your money doesn't have to be difficult, either. Here's a look at how much you will want to aim to invest in the stock market based on your age, and where you may want to invest your money as well.

How to grow your portfolio to $1 million

Determining how much you will need to invest is based on two factors: investing years left and the anticipated average rate of return.

Calculating the number of investing years left is fairly straightforward, since you'd likely have a good idea when you'd want to retire. Your expected rate of return, however, can be much more difficult to predict. The S&P 500, for example, has averaged 10% returns annually in the long run. However, if you are looking for greater average returns, you'd want to outperform that benchmark by investing a greater portion of your investing principal in growth stocks based on your risk appetite. Of course, the trade-off is that you give up some stability while taking on greater risk, which in turn, could expose your portfolio to more volatility than if you had a broader mix of stocks. A good example of that was in 2022, when rising interest rates led to a broad sell-off of growth stocks. In the long run, however, growth stocks should recover, but that may take several years to happen.

Here's a breakdown of how much you would need to invest initially to get to $1 million based on your age (assuming you retire by 65) at various average annual rates of return or growth.

Age Investing Years 10% Growth Rate 11% Growth Rate 12% Growth Rate 13% Growth Rate 14% Growth Rate 15% Growth Rate
55 10 $385,543 $352,184 $321,973 $294,588 $269,744 $247,185
50 15 $239,392 $209,004 $182,696 $159,891 $140,096 $122,894
45 20 $148,644 $124,034 $103,667 $86,782 $72,762 $61,100
40 25 $92,296 $73,608 $58,823 $47,102 $37,790 $30,378
35 30 $57,309 $43,683 $33,378 $25,565 $19,627 $15,103
30 35 $35,584 $25,924 $18,940 $13,876 $10,194 $7,509

Calculations by author. 

As the above table suggests, investing in high-performing growth stocks can lead to higher average annual growth rates for your portfolio, reducing the need for a six-figure initial investment, unless you begin investing in your 50s.

An investment that can help you beat the market

If you want to beat the market and outperform the S&P 500, you are going to need to take on some risk, which, in this case, is going to be focusing on growth stocks. But I would go one step further and invest in simply the best of the best -- the Nasdaq-100. A good ETF that gives you exposure to the Nasdaq-100 is the Invesco QQQ Trust (NASDAQ: QQQ). The fund invests in the 100 largest nonfinancial companies on the Nasdaq. You'll get exposure to top growth stocks such as Costco Wholesale, Microsoft, Amazon, Nvidia, Tesla, and many other well-known stocks.

Over the past decade, the Invesco QQQ Trust has trounced the S&P 500, generating total returns (which include reinvesting dividends) of 425%, versus the broader index's 230% returns, translating into 18% and 12.7% average annual returns, respectively. That's an impressive rate, but investors should be careful not to assume that will always be the case; good years will inevitably balance out with some bad ones in the long haul. Over the last 20 years, the ETF's average annual return drops to 14%, but far outpaces the S&P 500's 9.8%. 

However, the bottom line is, as far as growth investments go, it's hard to not like the Invesco QQQ Trust.

Now is always a good time to invest

Regardless of how many investing years you have left, or what your actual returns will turn out to be, it's generally a good idea to remain invested in stocks over the long run. Timing the market, or trying to predict where stocks will go, is near impossible and could leave you missing out on profits along the way.

Investing in a top growth fund such as the Invesco QQQ Trust can be a good place to put any money you can afford to invest. In the long run, you're likely to be far better off for it. While starting your stock investment journey early is ideal, don't let that discourage you if you couldn't. Because as you've seen with the QQQ's amazing returns over the past two decades (that included a global financial crisis in 2008), investing in top growth stocks can lead to incredibly strong profits, regardless of the timing and duration of your investment.

Where to invest $1,000 right now

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.


2.

The downside risks hidden in a 'normal' market pullback: Morning Brief

2024-02-15 11:00:04 by Jared Blikre from Yahoo Finance

This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:

  • The chart of the day

  • What we're watching

  • What we're reading

  • Economic data releases and earnings

Stocks surged back Wednesday, reclaiming a portion of the steep losses suffered Tuesday following the hotter-than-expected headline inflation print that morning. Small caps led the way, with the Russell 2000 (^RUT) gaining over 2% after suffering its worst day in years.

But the larger question for investors remains: Was Tuesday's rout a one-off or the start of something bigger?

The balance of evidence suggests this is a short-term pullback with fresh record highs coming in a few weeks — in other words, a buying opportunity

And regardless of how the economic data lands over the next few weeks, it wouldn't be unusual for the S&P 500 to have a pullback after a blistering 20% rally off October lows, especially with where we are on the calendar.

As Ryan Detrick, chief market strategist at Carson Group, noted on X, the next four weeks on the calendar haven't been great historically during the fourth year of a presidential term.

And with the index having gained ground in 14 of the last 15 weeks, a breather is to be expected.

"Seasonal weakness is normal," Detrick wrote.

However, tail risks are real, downside risks are non-trivial, and the best playbooks are highly nuanced.

Broadly speaking, the narratives driving soft landing expectations recently haven't changed appreciably. 

As Chicago Federal Reserve President Austan Goolsbee said Wednesday, "let's not get amped up when you get one month of CPI that was higher than what you expected it to be."

Meanwhile, earnings growth, the engine of any bull market, remains strong — and the growth isn't limited to the Magnificent Seven, though they're definitely helping.

Further, most inflation metrics are still trending down. Tuesday's headline and core prints may have surprised expectations to the upside, but the year-over-year trends in both readings are heading lower.

Looking at the reaction in fed fund futures, Tuesday's inflation surprise only took about half of one 25-basis-point rate cut off the table.

But peering inside the CPI report and measuring some of the numbers on shorter time frames reveals a few trends keeping some investors up at night. So-called supercore inflation, which measures core services inflation after taking out housing, has turned up sharply. 

This inflation measure, frequently mentioned by Fed Chair Powell, plummeted from an annual rate of 8% to 3% late last year but is back up to 5.5%. "This isn't good news for markets," Alfonso Peccatiello, proprietor of The Macro Compass, said on X.

And if inflation does more broadly turn higher, it could bring back into focus the "no landing" scenario that shook investors and disrupted markets in mid-2023. 

In the meantime, expectations of Fed cuts are driving the boat, and the timing of these cuts is far less important than the fact that investors believe the next move is lower.

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3.

History suggests stocks are due for a pause as market soars

2024-02-08 11:00:09 by Jared Blikre from Yahoo Finance

This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:

  • The chart of the day

  • What we're watching

  • What we're reading

  • Economic data releases and earnings

The Dow Jones Industrial Average (^DJI), Nasdaq 100 (^NDX), and S&P 500 (^GSPC) all notched record highs on Wednesday. The latter, the world's benchmark stock index, also came tantalizingly close to hitting the big, psychological 5,000 level for the first time.

Meanwhile, stocks are now in one of the seasonally weakest months of the year, with an even weaker month ahead often seen in election years. We're also sitting on a monster three-month rally that history suggests might take a few weeks to digest

While no one is suggesting investors should tear off their "S&P 5,000" hats and short Nvidia (NVDA), it's a good time to take stock of what's been working this year and of some of the increasing divergences that might need correcting.

Classic Dow Theory posits that the Dow Jones Industrial Average and the Dow Jones Transportation Average (^DJT) should agree with each other. In general, there should be broad, directional agreement between the companies that make the stuff and the companies that ship the stuff.

Recently, the industrials have been hitting record highs while the transports have been struggling to break through prior resistance. While this could be resolved by the transports surging higher, seasonals suggest that industrials might "catch down" to the transports.

Then there are the megacaps. Whether it's the "Magnificent Seven," Mag 6, or Mag 4, the subject of market concentration has been talked to death as narrow leadership has gripped the minds of stock market bulls and bears alike. 

We can see this in the ratio between two different ways of calculating the S&P 500 — by the usual method of market capitalization, and also by equal weight, wherein each stock has an equivalent weighting in the index.

S&P 500 Market Cap Weighted vs. Equal Weighted

The above chart shows that large caps dominated early in the pandemic in 2020, but were taking a back seat to the rest of the market by the presidential election that year. That trend roughly continued until the internet-bank panic of 2023 led to another run of megacap outperformance.

Chartists and fans of technical analysis might see a giant cup-and-handle pattern that points to substantial upside on a definitive break. But, not to get too far ahead, right now and here would be a logical place for the markets to find equilibrium, if only temporarily. 

The bullish view is that the soldiers catch up to the megacap generals once again. The bearish view is that the generals will realize they've gone too far and need to ride back to the rest of the market.

Either way, there ought to be an opportunity for underrepresented sectors and industries to see more light. In that regard, healthcare, financials, and industrials all broke to new recent highs after some consolidation in the months of December and January. 

Large-cap Healthcare (XLV) is the third-best-performing sector this year and is up 17% from the late-October lows. It broke to record highs only recently, but more importantly, it resolved a multiweek consolidation to the upside as it did so. A simple measured move points to an interim $165 target — about 15% above Wednesday's closing price.

Similarly, large-cap industrials are making record highs again after a six-week consolidation that just retested a prior breakout level. The sector is up 21% from the October lows and is up 2.5% this year.

Finally, large-cap financials might not be making record highs, but similar to industrials, they just retested old resistance, which has now become support. The Financial Select Sector ETF (XLF) is up 24% from the October lows (only behind tech and communication services) and has posted gains of 4% this year.

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4.

With the S&P 500 at a record high, strategists warn against a valuation 'trap'

2024-01-29 08:53:50 by Josh Schafer from Yahoo Finance

With the S&P 500 (^GSPC) closing at a record high this week, a debate on Wall Street has predictably broken out over whether stocks are overvalued.

But multiple strategists told Yahoo Finance this week that market history shows these fears are ultimately misplaced. 

"When we look at the relationship between the market's multiple and forward returns, it's nonexistent," Citi US equity strategy director Drew Pettit told Yahoo Finance. "The correlation between returns and PE is almost zero over the past 20 years."

The S&P 500 is currently trading at a trailing price-to-earnings (PE) ratio of about 22, according to recent work from Citi. That lands in the 92nd percentile for the S&P's typical valuation over the last 20 years.

Citi's equity strategy team said this valuation is a "common pushback" to their constructive outlook on stocks. Citi's team, led by Scott Chronert, sees the index closing the year at 5,100; on Friday, the S&P 500 closed at 4,891.

BMO chief investment strategist Brian Belski agrees. 

He prefers not to make valuation calls because they're a "trap."

"Valuation is actually the worst metric for future performance," Belski said. "Too many people are looking at the market, and they want to make these broader market calls. And they're not kind of looking at the underlying components of the market. You know, after all, the stock market is a market of stocks; you don't buy the entire market."

To this end, Citi argues that even if lofty valuations were to be used as a reason to not buy stocks, comparing the S&P 500's valuation now to earlier points in history is akin to comparing apples to oranges. 

Pettit pointed out the composition of the S&P 500 isn't the same as it was 10 or 20 years ago due to the quarterly rebalancing of the index that kicks out sputtering companies and adds up-and-comers. For example, Uber was added to the index in December. Shares of the rideshare giant are up 5% over the past month.

"There's more growth in that valuation now than there used to be," Pettit said, nodding to the increased position of technology in the index.

To Pettit's point, seven large-cap growth stocks — the so-called "Magnificent Seven" of Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) — drove most of the S&P 500's gain in 2023. 

And during the stock market's recent rally, the same tech companies, excluding Tesla, drove nearly 90% of the growth seen in January, per analysis from Yahoo Finance's Jared Blikre. All of those companies trade at valuations higher than the S&P 500. 

These six leaders are also expected to account for more than all of the index's earnings growth in Q4, with earnings for this group forecast to rise 53.7% over last year against a 10.5% decline for the balance of the S&P 500, according to data from FactSet.

Citi's team also broke down a new valuation metric that compares individual company valuations today to the past, substituting sector-specific metrics that matter most (such as book value for banks). 

Using this valuation tool, Citi found the valuation of the S&P 500 stands closer to 19 (19.1, to be precise). This would put the valuation in the 78th percentile historically and in line with the valuation range seen since 2016.

This, the firm believes, better segments the index into its constituent parts, echoing Belski's note that the stock market is, after all, a "market of stocks."

With this valuation, Pettit says the S&P 500 is "not as expensive as it looks, but it doesn't mean it's cheap."

"At 19 times, it just means you need good earnings growth for the market to go up from here," Pettit said. "So as long as you think earnings are growing, going the right way, you can pay 19 times for the stock market."

Consensus estimates are for S&P 500 earnings to grow nearly 12% in 2024, per FactSet's data. That would mark the largest jump in earnings since company earnings surged in 2021 amid the post-pandemic recovery.

"The rhetoric that is surrounding the stock market right now in terms of growth is that growth is going to slow," Belski said. 

"It's the exact same story that was going on last year, same rhetoric ... There's actually no analytical evidence that we're seeing any kind of earnings slowdown."

Wildlife Conservation Officer Normand Saindon (R) places a trap in an attempt to capture a bear in CFB Valcartier near Quebec City, July 4. Six bear traps were set after a 24-year-old biathlete was killed in an apparent bear attack while training yesterday at the CFB Valcartier military base.

DID/HB
Wildlife Conservation Officer Normand Saindon places a trap in an attempt to capture a bear in CFB Valcartier near Quebec City, July 4. (DID/HB)
REUTERS / Reuters

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

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5.

Another reason not to fear the top-heavy stock market rally: Morning Brief

2024-01-25 11:02:31 by Jared Blikre from Yahoo Finance

This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:

  • The chart of the day

  • What we're watching

  • What we're reading

  • Economic data releases and earnings

Large-cap tech stocks ripped higher Wednesday for the fifth straight day — up to another record high, widening their lead over the broader market.

Many investors remain skeptical of the gains this year, as a handful of tech-centered stocks once again account for nearly all the returns in the S&P 500. Comparisons with the dot-com-era boom and bust abound. 

To be fair, we have never seen tech at such lofty levels relative to the broader market, as we can see in the chart below, which tracks the ratio between large-cap tech and the S&P 500. Yet, as is often the case in finance, how we got to these elevated levels is much more important than the levels themselves. Pace and direction trump elevation.

Astute chartists and technicians can point to a two-decade-long cup-and-handle pattern, which recently broke to the upside. (The cup is the U-shape, and the handle is the sharp drop after the top of the "U.") In general, the bigger the base, the bigger and longer the breakout, goes the maxim.

To the skeptical and those uninitiated in the dark arts of technical analysis, human behavior manifests in ways that create repeated chart patterns across stocks, bonds, indexes, and every conceivable combination thereof.

"Buy low, sell high" is the time-tested Wall Street mantra. It's no surprise, then, that bottom fishers try to buy new lows and permabears sell new highs. The former get beat up in bear markets, and the latter get slaughtered in bulls.

Suffice to say, when it comes to investing, human nature tends to kick in at the worst times. Fear grips many investors and leads them to sell winnings or outright short the market during bull markets making new highs. Meanwhile, greed tempts investors to buy stocks that are getting cheaper during bear markets.

And as investors figure out what to do, it pays to be circumspect about these factors. The past doesn't guarantee the bullish pattern will repeat itself. But along with my colleague Julie Hyman's point in the Morning Brief Tuesday about sustained — but narrow — rallies, it's yet another data point for skeptical investors to weigh against their discomfort with a stock market powered by a concentrated few. 

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6.

A sustained rally doesn’t have to mean a broad one: Morning Brief

2024-01-24 11:00:58 by Julie Hyman from Yahoo Finance

This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:

  • The chart of the day

  • What we're watching

  • What we're reading

  • Economic data releases and earnings

As we came into 2024, a lot of strategists were calling for a broadening of the stock market rally beyond the Magnificent Seven. Those calls sounded familiar, because we’ve been hearing them for at least the past year.

But the broadening hasn’t really materialized. And now the major averages are hovering at record highs.

Maybe it’s time to put to bed the notion that the rally “needs” to broaden to be sustained.

Info tech and communications services are the two best-performing groups thus far this year. Utilities and energy and consumer discretionary are in the red, among other sectors.

The Seven (or really, Magnificent Six, since Tesla has slumped) has powered forward. Nvidia is still the standout, with a 20% jump this year on top of its nearly 240% rally last year.

That means that once again — but even more so — big-cap tech is responsible for the push to new records. The Magnificent Six have accounted for a whopping 89% of the S&P 500’s (^GSPC) year-to-date return through Monday’s close, according to Yahoo Finance’s Jared Blikre.

Big Tech hasn’t reported earnings yet, so the stocks could take a hit when their numbers and forecasts come out. Both info tech and communications services are predicted to report year-over-year growth in both earnings and revenue, according to FactSet. It’s certainly possible that they won’t be able to meet the lofty expectations implied by the stocks’ run this year.

But that was frequently the narrative around tech earnings last year as well. As the refrain went, how could they possibly continue to gain, given what was being priced in?

And then Meta leaped 194%. Tesla doubled. Amazon soared 80%. Microsoft rallied 57%. Alphabet rose 58%. Apple gained 48%. And Nvidia, as previously mentioned, more than tripled. For some investors, surprise at these numbers amounted to an utter failure of imagination.

None of this is to say the same thing will continue to happen. But it certainly makes one question the idea that it can’t continue to happen.

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A previous version of this story was corrected to fix the number of contributors to the 89% return in the S&P 500 this year.


7.

Got $1,000 to Invest in Stocks? Put It in This ETF

2024-01-22 12:06:00 by Jake Lerch, The Motley Fool from Motley Fool

It's not for nothing that so many legendary stock pickers, including the legendary Warren Buffett, have recommended index funds as the best choice for novice investors. They are, in truth, ready-made portfolios. Thanks to their exposure to the performance of many stocks, they offer much-needed diversification to any investment portfolio.

What's more, it's never been easier for people to invest in an index-tracking exchange-traded fund (ETF). There are many to choose from, but for me, one stands out: the Invesco QQQ Trust (NASDAQ: QQQ).

Stock charts on a computer screen.
Image source: Getty Images.

How it works

The Invesco QQQ Trust (also known as the QQQs) is an ETF that tracks the Nasdaq 100 index. That index is made up of the 100 largest stocks that trade on the Nasdaq exchange, with some exceptions. For one, the Nasdaq 100 contains no financial companies. Banks, insurance, and mortgage firms are instead tracked on the Nasdaq Financial 100 index.

The index is market-cap weighted, meaning the largest companies have the largest impact on the price of the index. While tech companies dominate the index, many other sectors, including healthcare, industrials, utilities, consumer staples, consumer discretionary, and energy, are still represented.

Sector Number of Stocks (as of 9/30/23) Percentage of Index (by Market Cap)
Technology 36 57.1
Consumer Discretionary 22 18.7
Healthcare 13 7.1
Industrials 10 5.5
Telecom 4 4.9
Consumer staples 6 4.2
Utilities 4 1.2
Energy 3 0.7
Real estate 1 0.3
Materials 1 0.3
Infographic: Tech Companies Dominate Nasdaq 100 | Statista
You will find more infographics at Statista

What makes this ETF such a smart choice?

There are three reasons why the QQQs are such a great investment, particularly for new investors.

First, it's cheap. All ETFs charge an expense ratio -- a fee designed to cover expenses and generate profit for the fund operator. The QQQs have an expense ratio of 0.20%. That compares favorably to the average ETF expense ratio of 0.47%. In other words, investors in the QQQs are paying low fees on their investments.

Second, the fund is no Johnny-come-lately. It's the second-largest ETF in the world by volume -- trailing only the gargantuan SPDR S&P 500 ETF Trust (NYSEMKT: SPY). That's important because it means the fund has plenty of liquidity, meaning investors can trade in and out of shares quickly and efficiently at all times.

Third, the fund is a star performer. Indeed, the QQQs have outperformed the other major index ETFs hands-down since its inception. Consider how the QQQs have performed over the last 10 years compared to some of the other largest stock and bond ETFs:

QQQ Total Return Level Chart

QQQ Total Return Level data by YCharts

As you can see, it's not even close. The QQQs have grown over 400% -- meaning $1,000 invested in 2014 would have grown to more than $5,000 today.

More to the point, the QQQs are dominated by the so-called Magnificent Seven: Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla. Those seven companies make up over 39% of the index. And while there is no telling what the future holds, those are seven fantastic companies -- all of which are growing rapidly and flush with cash.

To sum up, for those with $1,000 to invest, but unsure of how to invest, the QQQs are a great place to start.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet, Amazon, Invesco QQQ Trust, Nvidia, and Tesla and has the following options: short February 2024 $300 calls on Invesco QQQ Trust. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.


8.

3 Magnificent Growth ETFs That Could Triple Your Money With Next to No Effort

2024-01-20 11:00:00 by Katie Brockman, The Motley Fool from Motley Fool

There's no safe and effective way to get rich in the stock market overnight, but with enough time, it's one of the best ways to generate wealth. The key, though, is to invest in the right places.

Investing in growth exchange-traded funds (ETFs) can be a smart way to maximize your earnings while still reducing risk. This type of investment is designed to earn higher-than-average returns. Each ETF contains dozens or even hundreds of stocks with the potential for above-average growth, making it more likely to beat the market over time.

ETFs, in general, can be a fantastic option for those looking for a low-maintenance investment. All of the stocks in the fund are already chosen for you, so you don't have to do as much research or upkeep as you would by investing in individual stocks.

Of course, there are never any guarantees when investing. But these three ETFs have a balance of risk and reward, and they could help you triple your money while barely lifting a finger.

1. Vanguard Growth ETF

The Vanguard Growth ETF (NYSEMKT: VUG) is a powerhouse ETF containing over 200 growth stocks, just over half of which are from the tech sector.

It's also a large-cap growth ETF, which means all the stocks are from large companies. This can reduce your risk somewhat, because larger companies tend to be less volatile than their smaller counterparts. Around half of the fund's total composition is made up of the top 10 holdings, which are behemoth stocks like Amazon, Microsoft, Apple, Tesla, and Nvidia.

Historically, this ETF has been able to successfully beat the market over time. Over the past 10 years, it's earned total returns of nearly 238%, while the S&P 500 (SNPINDEX: ^GSPC) has earned total returns of around 160% in that time.

Another advantage of this fund is its rock-bottom expense ratio of just 0.04% per year. Some other funds have expense ratios of around 1% per year or more, and this ETF could potentially save you thousands of dollars in fees over time.

2. Schwab U.S. Large-Cap Growth ETF

The Schwab U.S. Large-Cap Growth ETF (NYSEMKT: SCHG) is another growth ETF that only contains large-cap stocks. It includes 251 stocks, around 44% of which are from the tech industry. Because this ETF is slightly less focused on tech stocks than VUG, it can provide more diversification and lower your risk.

It's similar to VUG in some ways, including the fact that the top 10 holdings make up just over half of the fund's total composition. It also has an expense ratio of 0.04% per year, matching VUG's low fees.

That said, SCHG has earned higher returns than VUG. Over the past 10 years, it's earned total returns of roughly 270%, compared to VUG's 238% returns in that time.

3. Invesco QQQ Trust

Invesco QQQ Trust (NASDAQ: QQQ) is the highest performer on this list, but it also carries the most risk. It only contains 101 stocks, and a whopping 57% of the fund is allocated toward tech stocks. Of the three ETFs included here, then, QQQ is the least diversified. It also has the highest expense ratio at 0.20% per year.

However, it's also significantly outperformed both VUG and SCHG. Over the past 10 years, it's earned a total return of more than 367% per year -- more than double the S&P 500's performance over the last decade.

If you're thinking about investing in QQQ, consider your risk tolerance. There are no guarantees QQQ will keep up this type of performance over the long run, but if you're willing to take on more risk for the chance at earning higher returns, this could be the right fit for your portfolio.

Tripling your money over time

With enough time, it's possible to triple your money with next to no effort. Just keep in mind that growth ETFs can be incredibly volatile in the short term, and there's a chance they may not even beat the market at all. Before you buy, be sure you're willing to take on that level of risk.

^SPX Chart
^SPX data by YCharts

Over the past 10 years, VUG has earned an average annual return of roughly 14% per year. SCHG's 10-year average return is just under 15% per year, and QQQ has earned an average rate of return of around 17% per year in that time.

Again, there are no guarantees these ETFs will continue earning these types of returns. But if you were to invest, say, $2,000 in each of these funds while earning a 14%, 15%, or 17% average annual return, here's approximately how your savings would add up over time:

ETF Total Portfolio Value: 10 Years Total Portfolio Value: 20 Years Total Portfolio Value: 30 Years
VUG (14% avg. annual return) $7,000 $27,000 $102,000
SCHG (15% avg. annual return) $8,000 $33,000 $132,000
QQQ (17% avg. annual return) $10,000 $46,000 $222,000

Data source: Author's calculations via investor.gov.

To triple your money with these ETFs, you'd need to give your investments around 10 years to grow -- assuming they see similar returns in that time as they have over the past decade. If you're able to let your money sit longer (or invest an additional amount each month on top of your initial investment), you could potentially earn far more.

Investing in the stock market can be lucrative, and growth ETFs can help you make a lot of money over time. But it's important to consider your risk tolerance and keep in mind that no investment is a surefire bet. By investing wisely and keeping a long-term outlook, though, you could earn more than you might think.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of January 8, 2024

 

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Katie Brockman has positions in Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, Tesla, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has a disclosure policy.


9.

Consumers haven't felt this good about the economy since 2021: 'December was no fluke'

2024-01-19 16:03:26 by Josh Schafer from Yahoo Finance

Americans are feeling increasingly better about the state of the US economy. 

The latest University of Michigan consumer sentiment survey released Friday revealed a 13% jump in overall sentiment during the month of January. The index reading for the month came in at 78.8, its highest mark since July 2021, and well above economist expectations for a reading of 70.1. 

The cumulative 29% climb in the sentiment index over the past two months is the largest two-month increase since the US economy recovered from recession in 1991. 

"The sharp increase in December was no fluke," survey of consumers director Joanne Hsu said in a statement. "Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations."

The move higher in sentiment comes as the S&P 500 and Dow Jones closed at record highs on Friday after the Nasdaq 100 reached a new all-time high on Thursday. The equity rally has been driven by a shift from investors fearing further interest rate hikes to debating when the Federal Reserve's first interest cut will come. 

A so-called soft landing — where inflation returns the Fed's 2% target without a sharp economic downturn — has become close to a consensus call to begin 2024 as economists have become increasingly confident in inflation's path downward. This marks a stark reversal from the economic vibe at the start of 2023, when a recession was the consensus expectation.

Consumers are picking up on that trend, too. Year-ahead inflation expectations hit 2.9% in Friday's report, the lowest level since December 2020. Longer-run inflation expectations fell to 2.8%, down from 2.9% the month prior. 

"Although the poor relationship with consumption growth means the resurgence in confidence doesn’t necessarily tell us much about the economic outlook, with confidence rebounding and inflation expectations falling, this is another sign that the economy is on track for a soft landing," Capital Economics deputy chief US economist Andrew Hunter wrote in a note to clients on Friday. 

The shift in sentiment also signals a reversal in a pandemic era-trend many dubbed the "vibe-cession," in which Americans' feelings on the economy didn't match the strong data seen throughout most of 2023. 

“Consumers’ persistent pessimism despite strong GDP and job growth has been one of the most bewildering components of the post-pandemic economy, but this divergence is now narrowing," Nationwide financial market economist Oren Klachkin wrote in a note to clients.

Fans celebrate with the US national flag as medallist US' Jacob Stephen Varner wins the Men's 96kg Freestyle gold medal match on August 12, 2012 during the wrestling event of the London 2012 Olympic Games.  AFP PHOTO / YURI CORTEZ        (Photo credit should read YURI CORTEZ/AFP/GettyImages)
Fans celebrate with the US national flag at the London 2012 Olympic Games. (YURI CORTEZ/AFP/GettyImages)
YURI CORTEZ via Getty Images

Recent readings on the state of the US economy have painted a strong picture, too. 

A check on retail sales in December showed consumers finished 2023 in a better position than many economists feared. Building permits rose by more than expected in December, too. And while headlines about layoffs in various sectors have picked up in recent weeks, the hard data measurement of unemployment benefit claims recently hit its lowest weekly level since September 2022.

The data has projections for fourth quarter economic growth rising. And some economists feel that growth will continue into 2024. 

Goldman Sachs chief economist Jan Hatzius told Yahoo Finance Live he believes the US economy will grow at annualized 2.3% in 2024, about 1 percentage point above what he believes is the consensus call. 

And importantly, Hatzius doesn't think continued upside surprises in the economy will impact the Fed's rate-cutting plans.

"The driver of rate cuts in our forecast, and I would say in what Chair Powell said in the December press conference, is that inflation is coming back down to the target," Hatzius said. "If inflation comes back down to the target, there will very likely also be rate cuts because the 5.37% federal funds rate is going to just seem very, very high relative to an economy that's producing a 2% inflation rate."

This post was updated to reflect Friday's market close.

Josh Schafer is a reporter for Yahoo Finance.

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10.

These 2 ETFs Have More Than Doubled in Value in Just 5 Years

2024-01-19 11:00:00 by David Jagielski, The Motley Fool from Motley Fool

Investing in exchange-traded funds (ETFs) is a sound strategy for long-term investors. The drawback of investing in ETFs, however, is that you can sacrifice gains for the sake of diversification and reducing your overall risk. But with growth-oriented funds, you can still achieve some impressive, market-beating returns.

Two funds that have outperformed the S&P 500 and more than doubled in value in the past five years are the Invesco QQQ Trust (NASDAQ: QQQ) and the Vanguard Growth ETF (NYSEMKT: VUG). Here's a look at why these funds have done so well, and whether you should consider adding them to your portfolio.

1. Invesco QQQ Trust

The Invesco QQQ Trust is a popular fund as it gives investors exposure to some of the best growth stocks on the market, specifically the 100 largest non-financial companies (by market cap) on the Nasdaq exchange. And with an expense ratio of just 0.2%, investors won't have to worry about fees taking an oversized chunk out of their returns.

Tech stocks account for 57% of the ETF's portfolio with consumer discretionary being the only other sector with a double-digit allotment at 19%. The Invesco QQQ doesn't offer as much diversification as other ETFs, but investors are still getting exposure to some of the best growth stocks on the planet, including Amazon, Nvidia, and Alphabet. Outside of tech, some of the ETF's bigger names include Costco, T-Mobile, and Amgen.

In the last five years, the ETF has generated a total return, which include dividends, of 166%. The S&P 500, by comparison, was up 102%. To put that into a monetary perspective, a $10,000 investment in the QQQ grew to $26,600 versus $20,200 with the S&P 500.

There will be some tough years when tech stocks struggle, but for those investing for the long haul, the Invesco QQQ Trust is a great ETF to add to your portfolio.

2. Vanguard Growth ETF

Another growth-oriented option is the Vanguard Growth ETF. In this case, investors are getting a piece of approximately 220 stocks. It focuses on the largest growth stocks as well, but unlike the Invesco QQQ, it includes financial companies.

Here, too, investors will have heavy exposure to tech with the sector accounting for just over 53% of the Vanguard Growth ETF portfolio. Consumer discretionary stocks take up a slightly larger chunk at 21%, but once again, those two sectors are the only ones where the weight is more than 10%.

One thing to note is that while the Vanguard Growth ETF is larger by number of holdings, its portfolio is more concentrated in the fund's top stocks than the Invesco QQQ. Here's how the funds compare with respect to their top three holdings:

Stock Invesco QQQ Trust Vanguard Growth ETF
Apple 8.9% 13.0%
Microsoft 8.9% 12.8%
Amazon 4.9% 6.5%

The top three stocks in the Vanguard Growth ETF make up 32.3% of its holdings, versus 22.7% with the Invesco QQQ Trust. The fund also has a lower expense ratio at 0.04%. The Vanguard Growth ETF's five-year total return is 134%, turning a $10,000 investment into approximately $23,400 today.

Both of these funds give investors great exposure to top growth stocks and can be excellent options for long-term investors. Ultimately, choosing between the two funds may come down to the expense ratio or how much exposure you want to the funds' biggest holdings.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of January 8, 2024

 

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Costco Wholesale, Nvidia, and Vanguard Index Funds - Vanguard Growth ETF. The Motley Fool recommends Amgen, Nasdaq, and T-Mobile US. The Motley Fool has a disclosure policy.


11.

Here's How Investing $50 Per Week Can Create $50,000 in Annual Dividend Income

2024-01-15 11:55:00 by David Jagielski, The Motley Fool from Motley Fool

Living off dividend income can be a great goal to strive for in retirement. Expenses are often lower during your retirement years, and generating $50,000 in annual dividends can help you live comfortably.

And while that is not a small amount of dividend income, generating that much in the future may not be as daunting of a challenge as it appears to be. Here's a look at how investing $50 per week can help fund your retirement years.

Investing in growth is the best option to build up your portfolio

Dividend stocks can be safe options for investors on a fixed income who need stability. But if you're looking at an investing period the spans decades, then growth stocks can be a much better option for you. That's because while there might be volatility and bad years along the way, that should balance out over the long term.

A great example is the performance of the Invesco QQQ Trust (NASDAQ: QQQ), which gives investors exposure to the top 100 nonfinancial stocks on the Nasdaq Stock Market. The tech-heavy fund includes big names such as Apple, Microsoft, and Amazon. Over the past 10 years, its total returns (including dividends) have totaled 407%. That averages out to a compounded annual growth rate of 17.6% -- well above the long-run average of the S&P 500, which is close to 10%.

The fund is a good place to invest, especially if you're unsure of which stock(s) to put your money into. It can simplify your investing strategy, making it easier to set aside money every week into the fund.

Getting your portfolio to $1 million is the key

Before you can rely on dividend income, you first need a fairly large portfolio balance. And you can build it up over the years by investing just $50 per week (assuming minimal or no commission costs).

This chart shows you how, over a period of 30 years, investing $50 every week could grow your portfolio to more than $1 million.

Portfolio balance growth by year when investing 50 dollars per week.
Chart by author.

Assuming a 15% annual growth rate (on average), a $50 per-week investment could grow to a value of more than $1.5 million after 30 years. And it would take a little more than 27 years for it to hit the $1 million mark.

Averaging such a high growth rate may be challenging, but even if it's not quite that high, you could still end up close to or over $1 million. And with a growth-focused fund such as the Invesco QQQ Trust, you can maximize your odds of achieving those kinds of returns without having to take on much risk in the process.

The next step is to invest in dividend stocks

If you get your portfolio to $1 million or more, you've accomplished the hard part. Once you've got a balance that high, you can put it to work by investing it into high-yielding dividend stocks. During your retirement years, you'll likely want to move away from growth stocks anyway, and into less volatile investments. And the higher that balance gets, the less of a dividend yield you'll need to generate some significant income.

If, for example, your portfolio gets to a value of $1.5 million, you could invest in a fund or multiple investments that yield an average of 3.3%. At that rate, you could generate $50,000 in annual dividends. With a lower portfolio balance of $1 million, you would need to target an average yield of 5%.

Invest early and often for the best results

Amid inflation and rising interest rates, it's not an easy time to find money to invest in stocks. But if you can find a way to cut $50 per week out of your budget to invest into a diversified fund such as the Invesco QQQ Trust, it can pay off in droves for you later in life.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of January 8, 2024

 

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Microsoft. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.


12.

History Says the Nasdaq Could Soar in 2024: Here's What I Would Buy Before Then

2024-01-13 15:45:00 by Stefon Walters, The Motley Fool from Motley Fool

Last year was great for the Nasdaq Composite, surging 43% to lead all major indexes. This was a notable turnaround after the index lost a third of its value in 2022 amid rising inflation and recession fears.

One thing about history is that it often repeats itself, including in the stock market. If that continues to be the case, investors should be encouraged heading into 2024. The last few times the Nasdaq Composite finished a year in the negative (2002, 2008, 2011, and 2018), it bounced back with at least two straight positive years.

Year of Decline Decline Percentage Gains One Year After Decline Gains Two Years After Decline
2008 (40.5%) 43.9% 16.9%
2011 (1.8%) 15.9% 38.3%
2018 (3.9%) 35.2% 43.6%
2022 (33.1%) 43.4% TBD

Data source: Nasdaq Composite historical data. Percentages rounded to the nearest tenth percent.

There's no way to predict market movements, and past results don't guarantee future performance, but many of the catalysts responsible for the Nasdaq's 2023 bounceback -- such as AI and cloud computing -- are still relatively early in what they can become and should carry momentum through the year.

To get ahead of the game, here's an exchange-traded fund (ETF) I'd buy.

Let top tech companies lead the way for you

The Nasdaq-100 is a subset index of the Nasdaq Composite that tracks the 100 largest non-financial companies trading on the Nasdaq Stock Market. The Invesco QQQ ETF (NASDAQ: QQQ) is an ETF that mirrors the Nasdaq-100 and is the second-most traded ETF on the U.S. stock market.

Much of the appeal of the Invesco QQQ ETF is its composition. Below are its top five holdings and how much of the ETF they account for (as of Jan. 5, 2024):

  • Apple: 8.95%
  • Microsoft: 8.68%
  • Amazon: 4.77%
  • Broadcom: 4.02%
  • Meta Platforms: 3.95%

The Invesco QQQ ETF is undoubtedly tech-dominant (57% of the fund), but the companies cover a lot of areas within the tech sector. They cover consumer electronics (Apple), social media (Meta Platforms), software and services (Adobe, Alphabet, Intuit), semiconductors (Advanced Micro Devices, Intel, Nvidia), electronic design automation (Cadence Design Systems, Synopsys), and a handful of other subsectors of tech.

Many of the Invesco QQQ ETF's top holdings are industry leaders who will be shaping the future of technology and innovation -- especially the "Magnificent Seven."

Investing in individual companies comes with inherent risks, including company-specific and industry-specific issues and downturns, but I trust them, as a whole, to drive sustainable long-term growth.

A reach that goes beyond the tech sector

The Invesco QQQ ETF is often associated with tech, but it goes beyond that. Below are non-tech sectors represented in the ETF and how much of it they make up:

  • Consumer discretionary: 18.73%
  • Healthcare: 7.12%
  • Telecommunications: 5.48%
  • Industrials: 4.87%
  • Consumer staples: 4.23%
  • Utilities: 1.24%
  • Energy: 0.69%
  • Real estate: 0.27%
  • Basic materials: 0.27%

The tech sector will lead the charge, but it's good to have other sectors to balance out the ETF. The tech sector isn't immune to slumps, so any diversification benefits investors. Energy, real estate, and basic materials won't have tangible effects on the ETF, but sectors like consumer discretionary and healthcare can be great to balance out the cyclical nature of other sectors like tech and industrials.

The Invesco QQQ ETF has market-beating potential

Maybe most important is that the Invesco QQQ ETF has proven results. Since its March 1999 inception, the Invesco QQQ ETF has far outperformed the S&P 500, with 695% gains compared to the S&P 500's 270% gains over that time frame. The performance is even more impressive when looking at returns over the past decade.

^SPX Chart
^SPX data by YCharts

There's no way to predict if the Invesco QQQ ETF's 16.5% average annual returns from the past decade will continue, but it has market-beating potential when considering the companies it has leading the way.

For investors interested in investing in Nasdaq stocks in 2024, the Invesco QQQ ETF is an ideal choice. It contains notable sector leaders, has non-tech sectors to help against downturns, and has proven historical results. It's a 3-for-1 ETF that can play a key role in investors' portfolios.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of January 8, 2024

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Advanced Micro Devices, Alphabet, Cadence Design Systems, Intuit, Nvidia, and Synopsys. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $420 calls on Adobe, long January 2025 $45 calls on Intel, short February 2024 $47 calls on Intel, and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.


13.

Why the Invesco QQQ ETF Jumped 54% in 2023

2024-01-10 18:01:29 by Jeremy Bowman, The Motley Fool from Motley Fool

Shares of Invesco QQQ Trust (NASDAQ: QQQ) were among the big winners on the stock market last year. The ETF that tracks the Nasdaq 100 soared 54% last year, according to data from S&P Global Market Intelligence.

A number of trends and events pushed the tech-heavy index fund last year, including the hype around new generative AI technologies, beaten-down share prices in the tech sector at the start of 2023, and layoffs and other cost-cutting moves by big tech companies that helped give profits a boost last year.

The chart below shows the ETF's performance over the course of the year.

^SPX Chart
^SPX data by YCharts

As you can see, the QQQ's gains trended with the S&P 500 throughout the year, but it gained at a faster pace, reflecting the enthusiasm for AI and the low valuations of many big tech stocks at the start of the year.

Why tech stocks boomed last year

The Invesco QQQ Trust is made up of the 100 largest non-financial Nasdaq stocks, and the index is dominated by the Magnificent Seven stocks right now.

All of those stocks were big winners, and their gains reflect the trends that pushed the QQQ to huge gains.

For example, Nvidia (NASDAQ: NVDA) shares more than tripled last year as the company was far and away the biggest winner from demand for AI chips, and its revenue and profit margins soared. Meta Platforms (NASDAQ: META) stock also tripled as the company executed on its promise of a "Year of Efficiency," slashing costs and boosting margins, and it benefited from a rebound in advertising demand as well.

Tesla (NASDAQ: TSLA) stock also doubled last year even as profits declined in its most recent quarter. Anticipation for its AI and autonomous vehicle technology helped lift the stock.

And big tech stocks like Microsoft, Apple, Alphabet, and Amazon rose on a combination of expanding profit margins, AI developments, and the perception that the economy would avoid a recession.

A stock chart showing a line moving higher
Image source: Getty Images.

What's next for the Nasdaq QQQ ETF

The Nasdaq 100 currently trades at a price-to-earnings ratio of 29.1, which is significantly higher than where it was a year ago at 23.5, and even higher than the S&P 500's at 21.6.

That price tag reflects the high expectations baked into the tech stocks thanks to the momentum in AI. However, profits should rise for big tech stocks this year, and AI momentum should continue as the investments we've seen over the last year start to pay off.

While investors shouldn't expect another 54% gain from the QQQ ETF, it still seems well positioned for more gains as long as the economy can skirt a recession.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of January 8, 2024

 

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.


14.

Fly High and Diversify! Get Mag-7 Momentum With QQQ Stock.

2024-01-08 13:11:41 by David Moadel from InvestorPlace

Let’s face it – not everyone wants to research individual stocks. That’s why index-tracking exchange traded funds can be so useful. Among the most popular ETFs is the Invesco QQQ Trust Series 1 (NASDAQ:QQQ), which includes some of the best-known names in technology. Is QQQ stock right for you, though?

It probably deserves a place in your portfolio, even if you’re an experienced stock picker. The Invesco QQQ ETF, which is managed by Georgia-based fund manager Invesco (NYSE:IVZ), has something to offer to a broad variety of investors. So, let’s crack open this famous fund and see what’s inside.

QQQ Stock: Cheap, Easy and Hard to Beat

Whether you already picked out some technology stocks or not, you can get easy, immediate exposure to some of 2023’s biggest winners with QQQ stock. Furthermore, you can let Invesco’s fund managers do the heavy lifting for a very reasonable fee.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

In fact, the total annual expense ratio for the Invesco QQQ ETF is just 0.2%. Compared to the expense ratios of some other funds out there on the market, 0.2% is fairly cheap.

Just to recap, QQQ stock tracks the Nasdaq 100 index. But here’s a fun fact: The Invesco QQQ Trust Series 1 actually has 101 holdings. Still, it does a good job of tracking (i.e., following) the Nasdaq 100 index, which is technology-sector-dominated and weighted by market capitalization.

And by the way, passive income investors should be interested to know that the Invesco QQQ ETF has a 12-month distribution rate (dividend yield plus interest payments) of 0.62%. That’s in addition to the share-price appreciation, which was considerable in 2023. Impressively, the Invesco QQQ Trust Series 1 share price increased by around 54% last year.

Don’t Fight the Fed! Just Buy the Invesco QQQ ETF.

Moreover, QQQ stock includes some “Magnificent Seven” names that performed exceptionally well in 2023. Here are a few of them, along with their share-price increases from last year:

  • Nvidia (NASDAQ:NVDA): Up 239%
  • Meta Platforms (NASDAQ:META): Up 194%
  • Tesla (NASDAQ:TSLA): Up 102%
  • Amazon (NASDAQ:AMZN): Up 81%

Thus, you were in the winner’s circle in 2023 if you just held the Invesco QQQ ETF all year long. This year’s best tech-sector performers might be different, but with Invesco’s diversified Nasdaq-100-tracking ETF, you don’t have to play the difficult game of picking and predicting.

Besides, technology stocks tend to perform well when U.S. monetary policy is easing. That will likely occur in 2024, as the market expects the Federal Reserve to lower interest rates multiple times. This would reduce borrowing costs, and should provide a favorable growth environment for companies like Nvidia and Meta Platforms.

Catch the Wave of Momentum With QQQ Stock

Which famous technology stocks will be 2024’s biggest winners? Put away your crystal ball, as you don’t need to pick and predict if you own some QQQ stock.

Additionally, you’ll certainly want to have some well-known tech names in your portfolio when the Federal Reserve starts cutting interest rates. So, whether or not you’re a seasoned stock picker, keep some shares of the Invesco QQQ ETF for the rest of 2024.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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The post Fly High and Diversify! Get Mag-7 Momentum With QQQ Stock. appeared first on InvestorPlace.


15.

The Average American Has $87,000 Saved for Retirement: This Stock Could Help You Beat the Odds

2024-01-08 10:47:00 by Justin Pope, The Motley Fool from Motley Fool

The U.S. is a prosperous nation that offers many opportunities for those who live there. But an ongoing retirement crisis threatens to leave millions unable to keep up with the ever-increasing living costs.

The average (median) American household has just $87,000 saved for retirement today, according to research by The Motley Fool. Considering the average household income in the U.S. is $74,580 per the U.S. Census Bureau, these nest eggs can barely cover a year of family wages.

But there is something everyone can do to improve their outlook: investing. Putting your hard-earned money to work in the U.S. stock market will let the American economy work for you, not just you for it.

Not sure how to take advantage? Here is a stock that can help you do just that.

Big technology rules Wall Street

For much of the past decade, America's largest technology companies have been the beating heart of the U.S. stock market. Often referred to as the "Magnificent Seven," these stocks include:

  • Apple
  • Amazon
  • Alphabet (Google)
  • Meta Platforms (Facebook)
  • Microsoft
  • Nvidia
  • Tesla

You can see how each of these has grown dramatically faster than the broader stock market, represented by the S&P 500. While past results don't promise future returns, these companies are among the world's largest and most deep-pocketed, and all dominate what they do. Of course, you should diversify your investments, but these are a great starting point.

AAPL Total Return Price Chart
AAPL Total Return Price data by YCharts

Most people don't want to spend the time and mental effort to juggle which of these stocks to buy at any given time. So you can consider buying shares in the Invesco QQQ Trust (NASDAQ: QQQ) instead.

Investing in big technology stocks -- made simple

The Invesco QQQ is an exchange-traded fund (ETF), a basket of individual companies lumped together and traded under one stock symbol. One share of the QQQ gives you exposure to all the stocks that make up the fund.

Specifically, the QQQ fund holds 101 stocks, and 57% of the fund is focused on technology companies. The fund's top 10 holdings are littered with Magnificent Seven names, totaling 43% of the fund. In other words, you can ride these tremendous companies by buying one ticker, which comes with diversification to other companies as a bonus. Costco Wholesale and Broadcom also appear in the fund's top 10 list.

You can see above that the Invesco QQQ has handily outperformed the S&P 500. Of course, we can't know whether or how long that will continue. ETFs change over time and will rebalance. The only cost to owning the Invesco QQQ is an expense ratio, a percentage paid to the fund managers to compensate them for managing everything. The Invesco QQQ's expense ratio is 0.20%.

How to take action

As with all stocks, they will go up and down over time. You shouldn't just plunge your money into the Invesco QQQ or any other investment. Instead, consider buying a little at a time, a dollar-cost averaging strategy. It will ensure you're never buying at the top or bottom, but it will average out over time.

Think about where you're buying and holding stocks like the Invesco QQQ. A Roth IRA can be a great retirement tool because it could save you from paying taxes in retirement.

Whatever the case, the statistics show that you may benefit from sitting down and thinking about how you're building your financial future. The sooner you take action, the more time compounding will have to do its magic for you. If you want to juice up your retirement savings, the Invesco QQQ can do that as part of a diversified retirement strategy.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.


16.

QQQ ETF: Still Attractive after Dazzling 2023 Gains

2024-01-05 04:03:01 by TipRanks from TipRanks

After watching it notch a spectacular gain of around 55% in 2023, many investors likely feel that it’s too late for them to buy the Invesco QQQ ETF (NASDAQ:QQQ). But even after this massive rally, there’s still plenty of reason to own QQQ for the long term. 

I remain bullish on QQQ based on its strong portfolio featuring many of the world’s strongest and most dynamic companies. QQQ invests in the 100 largest non-financial stocks in the Nasdaq (NDX), making it the home to some of the world’s most innovative companies like Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), and Amazon (NASDAQ:AMZN).  

These holdings give QQQ investors access to artificial intelligence, semiconductors, cybersecurity, the cloud, e-commerce, and other important themes that will drive the market’s growth in the years ahead. I’m also bullish on QQQ based on its excellent long-term track record of performance and its reasonable expense ratio.

What is the QQQ ETF’s Strategy?

As discussed above, QQQ tracks the Nasdaq 100 Index, giving investors “access to the performance of the 100 largest non-financial companies listed on the Nasdaq,” according to Invesco. QQQ launched in 1999 and is now one of the largest ETFs in the stock market, with $230.1 billion in assets under management (AUM). 

Own The Market’s Top Companies 

QQQ owns 101 stocks; its top 10 holdings comprise 45.4% of the fund. Below is an overview of QQQ’s top 10 holdings created using TipRanks’ holdings tool.

As you can see, QQQ owns many of the top tech and growth stocks that have taken the market by storm over the past decade-plus. QQQ’s top holding is Apple (NASDAQ:AAPL), followed by Microsoft. It also features large positions in the other “magnificent seven” stocks, including Amazon, Nvidia, Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), and Tesla (NASDAQ:TSLA). Semiconductor giant Broadcom (NASDAQ:AVGO) also appears in the top 10. 

Beyond its 10 largest positions, QQQ gives investors exposure to many other top growth stocks, whether they are semiconductor giants like Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD), healthcare innovators like Intuitive Surgical (NASDAQ:ISRG) and Vertex Pharmaceuticals (NASDAQ:VRTX), or software names like Adobe (NASDAQ:ADBE) and Intuit (NASDAQ:INTU).

The fund also offers plenty of exposure to international growth through the likes of MercadoLibre (NASDAQ:MELI) and China’s PDD Holdings (NASDAQ:PDD).   

QQQ gives investors access to a comprehensive assortment of themes that will prosper in the long term, whether it’s semiconductors, artificial intelligence, robotic surgery, biotech breakthroughs, or e-commerce in developing markets.

Furthermore, TipRanks’ Smart Score system rates QQQ’s holdings very highly. The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight key market factors. A score of 8 or above is equivalent to an Outperform rating. 

Seven out of QQQ’s top holdings feature Outperform-equivalent Smart Scores of 8 or higher, led by Amazon, Broadcom, Meta Platforms, and Alphabet’s class A shares, which all score ‘Perfect 10’ ratings. 

QQQ features an outperform-equivalent ETF Smart Score of 8.

Star-Studded Track Record

In addition to providing exposure to this large collection of world-class companies, QQQ has put together an impressive and reliable track record of long-term performance.

As of the end of 2023, QQQ has generated a respectable annualized total three-year return of 10.0%. Looking further out, QQQ’s results have been even more impressive. As of December 31, QQQ’s annualized five-year return stands at a phenomenal 22.4%, and its annualized 10-year return clocks in at a gaudy 17.7%.

Put another way, if you had invested $10,000 in QQQ 10 years ago, your position would be worth approximately $50,000 today, a return that almost any investor would take you up on. 

Another way to judge an ETF’s performance is to compare it to the broader market over time. Many ETFs talk a big game but fail to beat the broader market over the long run. Using the Vanguard S&P 500 ETF (NYSEARCA:VOO) as a proxy for the broader market, QQQ has beaten the market by a wide margin over the past 10 years. As discussed above, QQQ has generated a 17.7% annualized return over the past 10 years (as of December 31), far exceeding VOO’s still impressive 10-year annualized return of 12.0%. 

While past performance does not guarantee future results, QQQ’s long-term track record bodes well for its future prospects.  

Favorable Expense Ratio

Another important aspect to consider before investing in an ETF is how much it charges investors. Fortunately, QQQ also looks attractive from this perspective, with an expense ratio of just 0.20%. This means that QQQ charges $20 annually on an investment of $10,000, which is very reasonable, especially when considering its long-term performance.

While there are ETFs out there that are cheaper than QQQ, there are also many popular ones that are more expensive, featuring expense ratios like 0.35%, 0.50%, 0.75%, or even higher. 
What do these fees look like over time? Let’s assume this same investor who put $10,000 into QQQ holds on to it for the next decade and that the fund returns 5% per year going forward — altogether, they would pay $255 in fees over 10 years.

Is QQQ Stock a Buy, According to Analysts?

Turning to Wall Street, QQQ earns a Moderate Buy consensus rating based on 87 Buys, 15 Holds, and zero Sell ratings assigned in the past three months. The average QQQ stock price target of $441.37 implies 11.4% upside potential.

The Takeaway

Despite QQQ’s scorching runup in 2023, the ETF is still a good place to invest in for the long term. It will add the power of 100 of the world’s strongest and most innovative companies to your portfolio, all in one convenient investment vehicle.

QQQ gives you exposure to many of the market’s most compelling long-term growth themes, and TipRanks’ Smart Score system views its portfolio very favorably. Its impeccable track record of generating market-beating returns over the past decade and its investor-friendly expense ratio further add to its appeal as a core holding for the long term.

Disclosure


17.

Got $10,000 and 25 Investing Years Left? Invest in This ETF and Forget About It.

2024-01-03 11:45:00 by David Jagielski, The Motley Fool from Motley Fool

Investing is a long game, and the earlier you start, the more likely it is that you'll come out with some great profits. And through the effects of compounding, you also don't need to have a fortune ready to invest in order to build up some impressive gains.

If you can afford to invest $10,000 in the stock market and keep that money there for 25 years, it could end up being worth more than $600,000 -- without your having to do much except wait. Here's a look at how that could happen.

Investing in growth has paid off in droves

If you're investing for the long haul, then growth stocks can be incredibly attractive as they have the potential to rise significantly in value over time.

A good example is the Nasdaq Composite's performance over the past decade. This index is home to many of the top growth stocks in the world. In 10 years, the Nasdaq Composite has amassed a total return (which include dividends) of 302%. That averages out to a compound annual growth rate (CAGR) of 14.9%.

But suppose you wanted to focus on just the best of the best. Specifically, the top 100 stocks on the Nasdaq. You can gain exposure to these stocks by investing in an exchange-traded fund (ETF) called the Invesco QQQ Trust (NASDAQ: QQQ). This tracks the top 100 largest non-financial stocks on the Nasdaq. It includes such big names as Apple, Tesla, and Costco Wholesale.

While tech makes up the majority of its holdings, investors also gain exposure to other sectors, including consumer discretionary, healthcare, and telecom. Over the past decade, QQQ has generated total returns of 413%, for a CAGR of nearly 18%.

What $10,000 in QQQ could be worth in the future

Given its heavy exposure to tech and growth stocks in general, there will inevitably be fluctuations in the QQQ -- and years when it doesn't perform well. But in the long run, it can give investors a way to generate some potentially life-changing returns.

Suppose, for example, that over a period of 25 years it would continue to average an annual growth rate of 18%. That means that a $10,000 investment would eventually grow to a value of more than $626,000. Below is a breakdown of what the returns would look at slightly lower growth rates.

Growth Rate Investment Value After 25 Years
17% $506,578
16% $408,742
15% $329,190
14% $264,619
13% $212,305

Calculations by author.

Even if you aren't of sure what long-run growth rate the fund will average, you can see that even at a 13% growth rate you could have a 20-bagger investment if you hold on for a 25-year period. And the more that you're able to invest, the greater your investment can be worth in the future.

The Nasdaq-100 is a great index to be in

If you don't have $10,000 to invest right now, putting smaller amounts in the Invesco QQQ Trust can still be a great option for long-term investors. Since the ETF takes the guesswork out of picking growth stocks, you don't need to worry about which stocks are doing well or which ones are the best buys right now. Instead, it can act as a savings account for you, as a place to put money into on a regular basis. By doing so, you can generate significant long-term gains.

Investors who may need to withdraw their money in the near future (e.g., within five years) may not want to invest in the fund given the potential volatility that growth stocks can exhibit in the short term. But if your focus is on the very long term (25 years or more), then the fund can make for a great place to invest, either with a large lump sum today or with continued investments over time.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Costco Wholesale, and Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.


18.

This Invesco QQQ ETF Is at an All-Time High: History Says This Is What's to Come

2024-01-03 11:06:00 by Jeremy Bowman, The Motley Fool from Motley Fool

It's no secret by now. 2023 has been a great year for tech stocks. The Nasdaq Composite (NASDAQINDEX: ^IXIC)is up a whopping 44% through Dec. 28. Tech stocks have rebounded from 2022's bear market thanks to rock-bottom valuations to start the year and excitement over artificial intelligence (AI), which has paced some of the biggest gainers in the tech sector.

While the Nasdaq's gains have been impressive, there's another well-known tech index that has done even better than the Nasdaq Composite. That's the Nasdaq-100, which is composed of the 100 largest non-financial Nasdaq stocks and is up 54.5% with one day left to go in 2023. The largest exchange-traded fund (ETF) that tracks it, the Invesco QQQ Trust (NASDAQ: QQQ), is up by the same percentage.

The Nasdaq Composite is still short of the all-time high it reached in November by about 7%, but the Nasdaq-100 set an all-time high on Dec. 19 and has continued to climb from there.

Market cycles take long enough that there have only been a few times in history when the Nasdaq-100 and the Invesco QQQ ETF set a fresh all-time high after a bear market. Let's take a look at those times and what's likely to happen with the Nasdaq-100 next.

A bull figurine looking at a stock chart.
Image source: Getty Images.

The history of the Nasdaq-100

The Nasdaq-100 was founded in 1985, and the Invesco QQQ ETF was formed in 1999 during the height of the dot-com bubble.

Through the 1980s and 1990s, the Nasdaq-100 moved steadily higher before skyrocketing in the late 1990s during the dot-com boom. The chart below captures the index's movement starting from 1994.

^NDX Chart
^NDX data by YCharts.

As you can see, the index fell sharply from its peak in March 2000 to August 2002, losing 78% of its value, and it would take more than a decade for it to recoup those losses. The Nasdaq-100 rose over the next five years but then fell sharply again during the financial crisis, losing more than 50% of its value.

The index wouldn't eclipse its 2000 peak until 2015. Following that, the Nasdaq-100 dove briefly when the COVID-19 pandemic began in March 2000 and then surged until November 2021 when the pandemic bull market peaked.

Looking back at history, the Nasdaq-100 has only set an all-time high following a bear market one other time, but 2015, which came several years after its 2000 peak, seems like a poor analog.

A better comparison

2023 marked the Nasdaq-100's best year since the dot-com boom era, and there's a good reason for that. The generative AI revolution could be as transformative as the internet. You don't have to take my word for it. Here's what some of the top tech CEOs have said about it:

Oracle's Larry Ellison said, "Is generative AI the most important new computer technology ever? Probably." Bill Gates said it was the most important technological advance in 40 years, and Elon Musk called it the most powerful tool for creativity that has ever been created.

The excitement around AI shared by tech's biggest luminaries and retail investors has helped propel the big tech stocks that make up much of the Nasdaq-100 and the Invesco QQQ Trust.

Given the unique moment at the beginning of the generative AI boom, it may be better to compare the current Nasdaq to the early days of the dot-com boom or the index or the beginnings of the mobile era, which coincided with the recovery from the financial crisis.

Is Invesco QQQ Trust a buy?

Valuations for the top tech stocks are expensive right now as the Nasdaq-100 currently trades at a price-to-earnings (P/E) ratio of 30.

However, that valuation seems justified considering that the payoff from generative AI still looks to be in the future for the top tech stocks. Data-center buildouts and construction of other vital infrastructure have been constrained by a chip shortage thus far, and companies are still rolling out and developing new AI-focused products, which will take shape over the coming years. Additionally, revenue growth at the top companies is accelerating from the nadir during the bear market.

In other words, it seems likely that the Invesco QQQ Trust will continue to gain as long as optimism for AI remains, and with the generative AI boom still at the development stage, the momentum seems set to continue. Using history and past tech booms as a guide, it looks like more gains are in store for the Invesco QQQ ETF and the Nasdaq-100.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.


19.

Don't Start 2024 Without Making These Crucial Investing Moves First

2024-01-03 10:54:00 by Stefon Walters, The Motley Fool from Motley Fool

Heading into 2023, the sentiment surrounding the stock market wasn't the most positive, as many Wall Street analysts and economists anticipated a potential recession and continued downturn from 2022. Thankfully, that wasn't the case, and the stock market had one of its better years in recent times.

Now that we're in 2024, there's no way to predict how the stock market will behave, but investors can make a few moves to help ensure they begin the year on the right track.

^IXIC Chart
^IXIC data by YCharts

1. Make sure your portfolio still aligns with your goals and risk tolerance

Investing isn't (and shouldn't be) a one-approach-fits-all game. Different people have different financial goals, retirement horizons, resources, and risk tolerance, so what works for one person may not work for the next person -- and that's perfectly fine.

Now that we're in 2024, it can be a good time to do a portfolio review to ensure it still aligns with your personal situation. A good first step is to see how your stock portfolio is distributed across different sectors and stock types (growth, dividend, value). Once you know that, you can determine if your current investments suit you well.

For example, if your risk tolerance is low, but you're invested heavily in growth stocks, you may want to begin adjusting that to include more conservative stocks. The opposite can be true, too. If you're a ways from retirement and want to potentially capitalize on growth opportunities, you could increase your stake in growth stocks.

If your current portfolio doesn't align with your personal situation, put a plan in place to rebalance it. Selling stocks is an option, but I generally don't recommend that because it could spark an unwanted tax bill if you have capital gains. Instead, I would gradually buy stocks in underrepresented areas to achieve a more goal-aligned portfolio.

2. Check the overlap between your exchange-traded funds

In 2023, many megacap stocks saw their values surge, especially in the technology sector. But these rising valuations can be a double-edged sword. Let's take the Invesco QQQ Trust ETF (NASDAQ: QQQ) and SPDR S&P 500 ETF (NYSEMKT: SPY) -- two of the most traded ETFs in the U.S. stock market -- as an example.

Both ETFs are market-cap-weighted, so larger companies account for more of the fund than smaller companies. As megacap tech companies surged this year, they began accounting for more of these ETFs than usual. Notice that Apple, Microsoft, and Amazon are the top three holdings in each. Here are the percentages of assets both ETFs hold in those three stocks.:

Invesco QQQ Trust ETF SPDR S&P 500 ETF
Apple (9.19%) Apple (7.05%)
Microsoft (8.50%) Microsoft (6.95%)
Amazon (4.85%) Amazon (3.47%)

Data source: ETF fund pages. Invesco QQQ holdings as of Dec. 27, 2023. SPDR S&P 500 holdings as of Dec. 28, 2023.

Many popular ETFs contain the same companies, so it's important to monitor how much these companies overlap if you're invested in multiple ETFs. You don't want to be overconcentrated in any particular company or sector because it increases your risk if a downturn occurs.

Many online tools will let you enter which ETFs you're invested in and give you a rundown of the overlap between them. Utilizing those can simplify the process and let you know if you need to focus more on diversification.

3. Commit to using a Roth IRA if you're eligible

A Roth IRA is a retirement account where you contribute after-tax money and receive tax-free withdrawals in retirement. With a few exceptions, you can invest in virtually any stock or ETF in a Roth IRA that you could in a regular brokerage account. They're essentially brokerage accounts with major tax breaks.

If you will be investing for the long term (i.e., retirement), using a Roth IRA is helpful because it could easily save you thousands in taxes when you sell shares or withdraw in retirement. The current capital gains tax rates are 0%, 15%, and 20%. For people in the 15% or 20% brackets (most people), using a Roth IRA over a brokerage account could mean saving $1,500 to $2,000 for every $10,000 in capital gains.

Roth IRAs have relatively low contribution limits compared to workplace retirement plans like 401(k)s -- $7,000 for those under 50  or $8,000 if you're 50 or older in 2024 -- so I recommend aiming to max it out and then returning to your brokerage account. They also have an income limit, too. In 2024, any single filer making over $161,000 or married couple filing jointly making over $240,000 is ineligible to contribute to a Roth IRA.

If you're eligible, take advantage of the Roth IRA's unique tax break, and you'll likely be thanking yourself later.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.


20.

Got $200 per Month? This ETF Could Turn It Into $704,000 or More

2024-01-02 11:00:00 by Katie Brockman, The Motley Fool from Motley Fool

The investments you choose can make or break your portfolio, but it's not always easy deciding where to buy.

Exchange-traded funds (ETFs) can be a smart option for many investors, as they're low maintenance and require little effort on your part. Each ETF contains dozens or even hundreds of stocks bundled together into a single investment, taking the guesswork out of where to invest.

Some ETFs can also help supercharge your savings over time. While everyone will have different investing preferences, there's one fund that could potentially turn just $200 per month into more than $700,000 over time. Here's how.

Maximizing your long-term earnings

There are countless ETFs to choose from, but one popular option is Invesco QQQ Trust (NASDAQ: QQQ). This is a growth ETF that tracks the Nasdaq-100 Index, and it contains around 100 stocks from the largest nonfinancial companies listed on the Nasdaq.

Roughly 57% of the fund is made up of stocks in the tech sector, but it also includes stocks from other industries such as consumer discretionary, healthcare, and telecommunications. This provides a fair amount of diversification, which can limit your risk.

That said, this ETF is also designed to earn above-average returns over time. Over the past 10 years, QQQ has earned an average rate of return of 17.39% per year. Compare that to a broad-market ETF such as, say, the Vanguard S&P 500 ETF (NYSEMKT: VOO), which has earned an average return of 11.77% per year in that timeframe.

To play it safe, let's assume your investment only earns a 13% average annual return -- which is slightly higher than the market's historic average of around 10% per year. If you're investing $200 per month, here's approximately how much you could earn over time:

Number of Years Total Portfolio Value: 13% Avg. Annual Return Total Portfolio Value: 10% Avg. Annual Return
20 $194,000 $137,000
25 $373,000 $236,000
30 $704,000 $395,000
35 $1,312,000 $650,000

Source: Author's calculations via investor.gov.

To reach $704,000 in total savings, you'll need to invest consistently for around 30 years while earning a 13% average annual return. But if you're able to continue investing for longer than that, you could potentially earn far more.

Risks to consider before you buy

Invesco QQQ is a powerhouse ETF that could potentially help you earn hundreds of thousands of dollars or more over time, but it's not without its risks.

Because it's a growth ETF, it's more volatile than many other types of investments. When the market is thriving, this fund often earns much higher-than-average returns. But during market slumps, it may be hit hard. Before you buy, be sure you're willing to tolerate more extreme ups and downs.

Also, there are no guarantees that this investment will beat the market over time. While its 10-year performance is promising, there's always a chance it could underperform. If you're willing to take on more risk for the chance at earning above-average returns, this could be the right ETF for you. But if you're a more risk-averse investor, an S&P 500 ETF or other broad-market fund may be a safer option.

The right investment can supercharge your savings, and Invesco QQQ can be a smart choice for many people. While it won't be the right fit for everyone, if you're looking for an ETF that takes the guesswork out of investing while potentially earning much higher-than-average returns, it could be a great addition to your portfolio.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.


21.

9 economic trends to watch in 2024

2024-01-01 18:55:19 by Sam Ro from Yahoo Finance

Wall Street economists and market strategists entered 2023 expecting a recession and predicting unusually weak returns for stocks.

What we got was resilient economic growth and a 24% surge in the S&P 500.

Today, everyone’s a bit more optimistic. Many economists expect continued growth, albeit slower growth. Those who warn of recession add that any downturn is likely to be short and shallow. Meanwhile, market strategists are looking for average stock returns.

Let’s take a closer look at the big stories driving these 2024 forecasts.

1. Labor market: How cool will it get?

U.S. employers have added jobs for 35 consecutive months. But the pace of job creation has been slowing steadily over the past two years.

This cooling trend is echoed in the falling level of job openings.

According to the BLS’s Job Openings and Labor Turnover Survey, employers had 8.73 million job openings in October, down from the March 2022 high of 12.03 million.

The ratio of job openings relative to the number of unemployed people is near prepandemic levels. (Source: FRED via TKer)
The ratio of job openings relative to the number of unemployed people is near prepandemic levels. (Source: FRED via TKer)

During the month, there were 6.50 million unemployed people — meaning there were 1.3 job openings per unemployed person. This ratio — one of the most obvious signs of excess demand for labor — is almost back to down to prepandemic levels.

While it is true that the level of job openings remains high, it’s nowhere near its level earlier in the economic recovery. In other words, labor demand isn’t as hot as it used to be.

For more, read: The hot but cooling labor market in 16 charts

Workers prepare to lift a new pedestrian bridge into place at the Stamford Transportation Center on August 26, 2023 in Stamford, Connecticut. (Photo by John Moore/Getty Images)
Workers prepare to lift a new pedestrian bridge into place at the Stamford Transportation Center on August 26, 2023 in Stamford, Connecticut. (Photo by John Moore/Getty Images)
John Moore via Getty Images

2. Inflation: Is the worst behind us?

A wide variety of inflation metrics have been improving significantly since mid-2022.

Importantly, the core PCE price index — the Federal Reserve’s preferred inflation gauge — is hovering near the central bank’s target 2% level.

According to BEA data, the core PCE price index rose by just 0.1% month over month in November. On a six-month annualized basis, that metric is at a very comfortable 1.9%.

The Fed’s preferred measure of inflation is at target levels. (Source: BEA via @RenMacLLC)
The Fed’s preferred measure of inflation is at target levels. (Source: BEA via @RenMacLLC)

While it’s great news that inflation rates are near target levels, Fed Chair Jerome Powell has made clear that he’d like to see those rates stay there for more than just a few months before declaring any kind of victory.

For more, read: The end of the inflation crisis

3. Monetary policy: Tight for how long?

The Fed has been tightening monetary policy by hiking interest rates over the past two years in its effort to bring inflation down.

With inflation rates near target levels, most agree that monetary policy doesn’t need to be tightened further. In fact, most experts, including many central bankers think the Fed will actually begin to cut interest rates in 2024.

The Fed spent much of the past two years hiking rates. Are rate cuts near? (Source: FRED via TKer)
The Fed spent much of the past two years hiking rates. Are rate cuts near? (Source: FRED via TKer)

Generally speaking, looser monetary policy would be good news for the financial markets. However, there’s also the possibility that future rate cuts are a response to significant deterioration in economic data, which would be bad news.

Of course, any actual decision to cut rates will depend on the direction of the incoming economic data including data on growth and inflation.

For more, read: Views on the economy have shifted dramatically over the past year and When the Fed-sponsored market beatings will end

4. Sentiment: Finally a vibe-spansion?

One of the most fascinating economic developments of the past three years is the resilience in consumer spending despite a major deterioration in consumer sentiment.

While the “vibes” have been negative, this bullish contradiction has generally been positive for economic activity, corporate profits, and stock prices.

More recently, the vibes have been on an upswing, with the University of Michigan’s consumer sentiment index and the Conference Board’s consumer confidence index both taking noticeable legs up in their most recent editions.

Sentiment is improving. (Source: University of Michigan via TKer)
Sentiment is improving. (Source: University of Michigan via TKer)

From the University of Michigan: “Consumer sentiment soared 13% in December, erasing all declines from the previous four months, primarily on the basis of improvements in the expected trajectory of inflation.“

From the Conference Board: “December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months.“

For more, read: Don't underestimate the American consumer

5. Economic growth: Slowdown, recession, or something else?

The economy has gone from very hot to pretty good over the past two years as massive unusual tailwinds have been fading.

In the context of inflation, this has been a positive development, as easing demand has allowed prices to cool.

For now, it’s looking like we’re experiencing a bullish “Goldilocks” soft landing scenario where inflation cools to manageable levels without the economy having to sink into recession.

Simply put, the economy has been normalizing.

But the normalization has also meant deterioration in metrics like debt delinquencies. And it could eventually mean a more meaningful increase in the unemployment rate, which currently sits at unusually low levels.

At 3.7%, the unemployment rate is near its 50-year lows. (Source: FRED via TKer)
At 3.7%, the unemployment rate is near its 50-year lows. (Source: FRED via TKer)

It’s probably premature to sound alarms, especially considering the financial strength of U.S. consumers. (More here, here, here, here, and here.)

U.S. household finances continue to be very healthy. (Source: FRED via TKer)
U.S. household finances continue to be very healthy. (Source: FRED via TKer)

Nevertheless, it’s always prudent to at least consider the possibility that growth will plateau and perhaps turn negative in the coming months.

For more, read: The economy has gone from very hot to pretty good and Be mindful of the warning signs

6. Corporate profit margins: Will they hold up?

Record-high corporate profit margins may have been the most unexpected big story of 2021, 2022, and 2023.

As inflation rates surged in 2021, analysts were convinced rising costs would crush profit margins. But the opposite happened: Profit margins actually rose to record levels. During this period, many companies were able to pass higher costs to their customers through higher prices. Combined with improved operating efficiencies, this dynamic led to record profits. It was a reminder that it’s “dangerous to underestimate Corporate America.”

Surprising to some, high profit margins have persisted. And after a modest dip in a year ago, profit margin expansion resumed in Q2 and into Q3 of 2023.

Profit margins are near record levels. (Source: BMO via TKer)
Profit margins are near record levels. (Source: BMO via TKer)

Thanks to improved operating efficiencies, manybut not all — strategists expect profit margins to stay high, which could help amplify earnings growth even with modest revenue growth.

For more, read: A bullish earnings story is brewing

7. Interest expense: Will it become a problem?

Similar to how most homeowners locked in their mortgages at very low rates, large corporations did a lot of refinancing in recent years, locking in low interest rates before borrowing costs surged.

As a result of these activities, nearly half of S&P 500 debt is set to mature after 2030, and interest expenses haven’t really budged amid elevated rates.

Debt servicing costs haven’t really budged despite rising rates. (Source: Goldman Sachs via TKer)
Debt servicing costs haven’t really budged despite rising rates. (Source: Goldman Sachs via TKer)

That said, there will still be some companies having to refinance debt in a more challenging borrowing environment.

We’ll have to keep an eye on the oscillations in interest rates and corporate bond spreads as we consider the impact of new borrowing.

For more, read: Why higher interest rates haven't crushed corporate profits

8. Corporate earnings: Better or worse than the growth expected? 

As we often say at TKer, earnings are the most important driver of stock prices in the long run. It’s literally the bottom line.

As the bottom line, earnings will be sensitive to almost every other big story we’ve discussed above. Economic strength will be reflected in sales. Inflation will affect nominal sales as well as costs. And profit margins will determine how much of those sales hit the bottom line.

Currently, analysts expect S&P 500 earnings to rise about 10% year over year in 2024 and another 12% in 2025.

Most companies usually report quarterly earnings that beat analysts’ estimates. (Source: Deutsche Bank via TKer)
Most companies usually report quarterly earnings that beat analysts’ estimates. (Source: Deutsche Bank via TKer)

There are two things to remember when it comes to earnings estimates as 2024 unfolds: 1) Analysts typically cut their earnings estimates going into quarterly earnings season, and 2) most companies beat analysts’ quarterly earnings estimates.

For more, read: How to think of analysts' earnings estimates

9. Stock market: Will it do what it usually does?

It is incredibly difficult to predict precisely what the stock market will do in any given year.

Even metrics like earnings growth and the forward P/E ratio, regardless of whether they are high or low, have a very weak relationship with the next-12 month’s market performance.

We do, however, know that the stock market usually goes up. Since 1950, we’ve been in a bull market 83% of the time.

There are tons of charts and stats I could share showing why the odds favor the bulls.

For now, I’ll share two from Carson Group’s Ryan Detrick.

First: “[S]tocks have been higher during an election year of a new President going back to the past 10 Presidents! Even the historically strong pre-election year can’t say that. Higher the past 10 times and up 12.2% on average isn’t anything to ignore and that is inline with a potential low double-digit return in 2024.“

President Biden’s fourth year could be a positive one. (Source: Carson Group)
President Biden’s fourth year could be a positive one. (Source: Carson Group)

Second: “[W]hen stocks have dropped more than 10% (like 2022), then jumped more than 10% (like this year), that following year tended to be quite solid, up six out of six times with an 11.7% gain on average, which would likely make most bulls smile in ’24.

The second year of this market rebound could be a good one. (Source: Carson Group)
The second year of this market rebound could be a good one. (Source: Carson Group)

Oppenheimer’s Ari Wald had another two fascinating stats.

First: “Looking at bull cycles following a recessionary vs. non-recessionary bear, we’ve found the latter are usually steadier (lower year-1 returns followed by higher year-2 returns) and last just as long (median=32 months). The 37% gain since Oct. 2022 is on par with typical returns following a non-recessionary reset, and the median return between months 15 and 27 (Dec. 2023 to Dec. 2024) has been 13% which is the basis for our expectation for S&P 5,400.“

Stocks typically go higher after what we just experienced. (Source: Oppenheimer)
Stocks typically go higher after what we just experienced. (Source: Oppenheimer)

Second: “2024 will mark the 11th time since 1928 when the S&P 500 ended the prior year with a gain and was still flat-to-negative over a two-year period, indicative of positive momentum developing within a longer-term reset in price. In the ensuing year, the S&P 500 posted a median gain of 12.5% and traded positively 9 out of 10 times (90%). These returns are consistent with a year-2 bull cycle.“

Stocks usually go higher after a flat two years. (Source: Oppenheimer)
Stocks usually go higher after a flat two years. (Source: Oppenheimer)

I think it goes without saying that there are no sure things in life and the stock market. Just because something usually happens does not mean it always happens.

That said, we shouldn’t be surprised if the stock market does what it usually does.

For more, read: Wall Street's 2024 outlook for stocks

Expect revised targets 

TKer published Wall Street’s 2024 outlook for stocks on Dec. 3 when the S&P 500 was just below 4,600. At the time, the mean and median target year-end targets for the index was 4,800, implying about a 4% return.

In the days that followed, stocks continued to rally. And that came with strategists publishing more bullish forecasts for stocks, with at least two revising their targets higher. Currently, the mean and median year-end targets for the S&P 500 is 5,000.

But the S&P is now trading at around 4,770, implying about a 5% return.

Most strategists see the S&P 500 going to 5,000 or higher. (Source: TKer)
Most strategists see the S&P 500 going to 5,000 or higher. (Source: TKer)

Unless there’s a big deterioration in stock prices and their fundamentals in the coming weeks, expect Wall Street strategists to revise their targets higher, as they generally like to forecast 8%-10% gains in prices on rolling 12-month bases.

Having said all that, as I always say, predicting the stock market over one-year periods is incredibly difficult.

For more, read: The bulls get some company 

Beware the unknown 

Uncertainty is always high. It’s one of the cold hard truths about the stock market.

While there’s uncertainty about all the big talked-about stories — including the stories above — it’s the stuff that we’re not talking about that seemingly emerges out of nowhere that tends to be most destabilizing to markets.

Will there be a big unexpected event in 2024 that sends shockwaves through the economy and markets? Unfortunately, we’ll only know in hindsight.

For more, read: Sorry, but uncertainty will always be high 

Zooming out 

There are lots of unanswered questions out there. This is always the case when it comes to investing in the stock market.

For long-term investors, the best we can do is be as informed as possible as news comes in as we put in the time.


22.

Before You Buy the Invesco QQQ Trust ETF, Here Are 3 I'd Buy First

2023-12-25 12:15:00 by Adam Levy, The Motley Fool from Motley Fool

GettyImages-ETF exchange traded fund index fund

The Invesco QQQ Trust ETF (NASDAQ: QQQ), which tracks the Nasdaq-100, is one of the most popular ways for investors to get exposure to the often high-flying tech sector. Tech stocks account for the majority of the index's value.

Investors who held it in 2023 have been rewarded -- shares of the ETF have surged by more than 50% for the year. But those returns were largely driven by just a handful of stocks -- the "Magnificent Seven." Those tech giants are the largest U.S. companies today, and therefore hold outsized positions in the market-cap-weighted QQQ Trust, accounting for approximately 39% of the fund's total value.

And while there's a lot to like about the Magnificent Seven, there may be better opportunities for investors seeking market outperformance than buying shares of the Invesco QQQ Trust ETF. Here are three to consider first.

Blocks spelling out ETF with a green up arrow.
Image source: Getty Images.

1. QQQ's less expensive sister

If you're dead set on owning an index fund that tracks the Nasdaq-100 index, there's a better alternative for buy-and-hold investors.

In 2020, Invesco launched the Invesco Nasdaq 100 ETF (NASDAQ: QQQM). It follows the same trading rules as QQQ Trust, but its expense ratio is 5 basis points lower -- 0.15% versus 0.2%.

It may seem weird that Invesco decided to launch an ETF that competes with one of its most popular funds. But QQQ is an older ETF, and it has grown to over $200 billion in assets under management. Many shareholders may be sitting on big capital gains, locking them into the fund. Meanwhile, its size ensures adequate volume for traders looking to move in and out of the fund quickly without losing their trade to the bid-ask spread.

Therefore, Invesco can still make plenty of money by keeping its original QQQ Trust expense ratio at 0.2%. But to attract new investors, it needs to remain competitive with other fund issuers offering similar Nasdaq-100 index funds. The Invesco Nasdaq 100 ETF is its answer to the trend among its peers of ever-declining expense ratios.

The new Nasdaq 100 ETF is a better alternative for buy-and-hold investors looking to put new money to work in the stock market. While 5 basis points might not sound like much, there's no reason to leave money on the table.

2. Growth stocks with less of a premium

The phenomenal run of the biggest growth stocks in the market has pushed the valuation of the Nasdaq-100 index up significantly. The index has a price-to-earnings (P/E) ratio of 29.65 and a forward P/E of 28.49. A year ago, its P/E ratio was just 23.52.

Investors can find better values for growth stocks by looking beyond the biggest names. Small-cap growth stocks have gone unloved by the market in 2023.

The SPDR S&P 600 Small Cap Growth ETF (NYSEMKT: SLYG) currently trades at a forward P/E ratio of just 15.3. That's nearly half the price of the Nasdaq-100.

Of course, small-cap growth stocks come with a lot more risk. There's a reason they've been beaten down by the market in 2023. Rising interest rates are especially hard on small-cap growth companies, which use debt to finance their growth. What's more, investors put a bigger discount on the present value of their hoped-for future earnings due to the higher rates available from risk-free assets in the market.

While small caps should trade at a discount to cash-rich large caps and megacaps in the current environment, they still look extremely cheap today. Their upside over the long run is much higher, as small caps can grow much faster than large caps. And you'll only pay an expense ratio of 0.15% for the SPDR S&P 600 Small Cap Growth ETF, compared to 0.2% for the QQQ Trust ETF.

3. Consider shifting to value

Value stocks have fallen out of favor in recent years, but this could be a great time to look to them as a way to diversify away from the large-cap growth stocks that have lately dominated the action in the market. Historically, small-cap value stocks have produced the best long-term returns for investors -- even better than small-cap growth stocks.

Despite the recent underperformance of small-cap value stocks, there are reasons to think the tide is turning. For one, the Federal Reserve has forecast that it will start cutting its benchmark interest rates in 2024, and there's growing optimism that it will cut them more quickly than previously expected, which would ease some of the pressure on small-cap companies. Moreover, small-cap value stocks right now are, relatively speaking, extremely good bargains.

What's more, because relatively few Wall Street analysts cover small-cap value stocks, there are more opportunities for active stock pickers to outperform the benchmark index. That makes an actively managed fund like the Avantis U.S. Small Cap Value ETF (NYSEMKT: AVUV) a worthwhile addition to retail investors' portfolios. It trades today at a P/E ratio below 8, and its expense ratio is just 0.25%. While those fees are slightly higher than those charged by the Invesco QQQ Trust, the Avantis fund can help you diversify your stock holdings, and in theory should provide stronger returns for long-term buy-and-hold investors. That said, as an actively managed fund, there is potential for it to underperform its benchmark, the Russell 2000 Value index.

Considering the heavy concentration the Nasdaq-100 has in just a few massive companies right now, index fund investors may want to diversify their holdings into smaller companies. Those who would prefer to lean on growth stocks have several great small-cap fund options, but many investors may want to expand their holdings to include some small-cap value stocks at current prices as well.

Should you invest $1,000 in Invesco Exchange-Traded Fund Trust II-Invesco Nasdaq 100 ETF right now?

Before you buy stock in Invesco Exchange-Traded Fund Trust II-Invesco Nasdaq 100 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco Exchange-Traded Fund Trust II-Invesco Nasdaq 100 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

Adam Levy has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


23.

New to Investing? Here's Your First Investment in 2024.

2023-12-22 12:30:00 by Keithen Drury, The Motley Fool from Motley Fool

Person smiling while looking at a tablet

Getting started investing can be a challenge. First comes opening a brokerage or retirement account, like a Roth IRA. Then comes the hardest decision: What will your first purchase be? This can be quite nerve-racking, as you probably don't have a large account balance, so not losing money is a top priority.

Still, you want to make money (that's why you're investing, right?), so balancing the two can be difficult. However, if you're starting off, I think there's one investment that makes perfect sense and can provide the balance you need.

The QQQ is filled with some of the most innovative companies in the market

Your first investment likely shouldn't be an individual stock unless you've done your research and have high conviction in the company. Instead, I'd recommend an index fund to begin, as this will give you instant diversification across many companies.

The market is full of fantastic and not-so-great funds, so this can be difficult. However, one of the best funds to own over the past decade has been the Invesco QQQ (NASDAQ: QQQ), which mirrors the Nasdaq-100 index. The Nasdaq-100 is often referred to in the media as "the tech-heavy Nasdaq," and for a good reason. The largest 10 positions in the fund are made up of some of the largest tech companies out there.

Company Allocation
Apple 11.1%
Microsoft 10%
Amazon 5.5%
Nvidia 4.3%
Meta Platforms 3.7%
Broadcom 3.5%
Alphabet Class A 2.8%
Alphabet Class C 2.8%
Tesla 2.7%
Costco
2.2%

Data source: Invesco. Makeup as of Dec. 14, 2023.

With many of these companies being today's innovators with ideas for tomorrow, it makes sense that this cohort will likely keep winning. While an S&P 500 fund may be a more conservative approach, that index isn't as heavily weighted toward the companies that have produced the greatest innovations. That's why the QQQ has outperformed other index funds that mirror the S&P 500, like the SPDR S&P 500.

Return Period QQQ Total Return SPY Total Return
Year to date  52% 24%
3-year 36% 34%
5-year 153% 93%
10-year 420% 217%

Data source: YCharts.

Those are some great returns, and anyone would be happy with that kind of performance. But with the Nasdaq-100 having such a strong 2023, can investors expect another successful year in 2024?

The QQQ has typically followed up fantastic years with even better ones

Over the past 20 years, there have been eight times when the QQQ has delivered a 20% or greater return (when dividends are included). The average return for seven of those times (because we don't know what 2024's result will be) was 25.1%, with only two years (2018 and 2022) losing money. So, on average, the QQQ has performed spectacularly after a similarly great year.

Another consideration for some investors is that 2024 is an election year. But the QQQ has done quite well in previous election years (as long as you don't include 2008, but that wasn't the election's fault).

Year QQQ Return
2004 10.5%
2008 (41.7%)
2012 18.1%
2016 7.1%
2020 48.6%

Data source: ETFreplay.com.

Now, the setup for each of these years was completely different, and 2024 is no exception. So there is no guarantee that by investing in the QQQ now, you'll be up 25% by next year. However, if you're committed to a long-term buy-and-hold approach, then taking a position in the QQQ now is a genius move, as the long-term returns for this index have been outstanding.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 11, 2023

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet, Amazon, Costco Wholesale, Invesco QQQ Trust, SPDR S&P 500 ETF Trust, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.


24.

3 Unstoppable ETFs to Stock Up on in 2024

2023-12-21 11:00:00 by Katie Brockman, The Motley Fool from Motley Fool

bull vs bear market gold

Exchange-traded funds (ETFs) can be fantastic investments for many people, especially those looking for a simple, no-hassle option.

An ETF is a basket of securities bundled together into a single investment. When you invest in one, you're actually investing in dozens, hundreds, or even thousands of stocks at once. This not only makes building a diversified portfolio a breeze, but it also helps take the guesswork out of what to buy.

Not all ETFs are created equal, however, and some are better investments than others. These three would be great additions to most portfolios as we head into 2024.

1. iShares Core S&P 500 ETF

The iShares Core S&P 500 ETF (NYSEMKT: IVV) tracks the S&P 500, so it includes all the same stocks that the index does, and mirrors its performance over time. If you're looking for a safer and more reliable investment, this ETF could be a smart fit for your portfolio.

S&P 500 ETFs, in general, are incredibly consistent. In fact, analysts at Crestmont Research examined the index's long-term performance and found that for every single 20-year period in history, the index ended with positive total returns. So if you had invested in an S&P 500 ETF or index fund at any point (or bought that same portfolio yourself, back before ETFs existed) and simply held it for 20 years, you would have made money.

While the S&P 500 naturally experiences fluctuations and even steep declines in the short term, it has a long track record of recovering from downturns. If you're feeling nervous about the market or simply want an investment that can stand the test of time, an S&P 500 ETF is a safe bet.

In addition, the iShares Core S&P 500 ETF has a rock-bottom expense ratio of just 0.03%. This is far lower than many other ETFs, and the difference could save you thousands of dollars in fees over time.

2. Invesco QQQ Trust

Invesco QQQ Trust (NASDAQ: QQQ) is a growth ETF containing primarily tech stocks. It tracks the Nasdaq-100 index, which is composed of the 100 largest non-financial companies listed on the Nasdaq.

This fund was launched in 1999, making it one of the older ETFs in existence. It also has a history of beating the broader market. Over the past 10 years, the Invesco QQQ Trust has averaged a total rate of return of over 17% per year. The iShares Core S&P 500 ETF, for comparison, earned an average return of just under 12% per year in that time.

While this investment could help you earn above-average returns, it also carries more risk than a broad-market fund. High-growth stocks (particularly tech stocks) tend to be more volatile than their more established counterparts. When the market is thriving, this ETF can earn higher-than-average returns. But it can also suffer steeper-than-average declines during downturns.

Before you invest in the Invesco QQQ Trust, then, consider how much risk you're comfortable taking. If you can handle more extreme ups and downs in exchange for potentially higher returns over time, this could be a smart investment for you.

3. Vanguard Growth ETF

The Vanguard Growth ETF (NYSEMKT: VUG) occupies somewhat of a middle ground between the iShares S&P 500 ETF and Invesco QQQ. It's designed to earn above-average returns over time, but it also has ample diversification.

This ETF contains 221 stocks, and its composition is split between smaller, high-growth companies and blue chip stocks. Its 10 largest holdings make up around half of its total value, and these stocks include major names like Apple, Microsoft, Nvidia, and Visa.

The other half of the fund is made up of smaller stocks with the potential for explosive growth. Balancing solid companies with up-and-coming stocks can help limit your risk while enhancing your potential earnings.

Like the Invesco QQQ, the Vanguard Growth ETF carries more risk than an S&P 500 ETF or another broad-market fund. But over the past 10 years, it has earned an average rate of return of just under 14% per year -- higher than the iShares S&P 500 ETF, but not quite as high as the Invesco QQQ.

Which one you choose to invest in will depend largely on your goals and risk tolerance. If you're looking for a safe and steady investment, an S&P 500 ETF is probably your best bet. On the other hand, if you're willing to take on more risk for the chance at higher-than-average returns, a growth ETF could be a good fit for your portfolio.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

 

*Stock Advisor returns as of December 18, 2023

 

Katie Brockman has positions in Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, and Visa. The Motley Fool has a disclosure policy.


25.

16 Most Promising QQQ Stocks According to Hedge Funds

2023-12-20 14:59:40 by Muhammad Jamal Akbar from Insider Monkey

In this article, we will take a look at the 16 most promising QQQ stocks according to hedge funds. To skip our analysis of the recent trends, and market activity, you can go directly to see the 5 Most Promising QQQ Stocks According to Hedge Funds.

The Invesco QQQ Trust (NASDAQ:QQQ) is an exchange-traded fund that tracks the performance of the Nasdaq-100 Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The Index is rebalanced quarterly and reconstituted annually. As of December 18, nearly half of the Fund portfolio was allocated to the Information Technology sector with 49.7% weightage, followed by 14.9% for Communication Services, and 14.6% for Consumer Discretionary.

The fund is designed to provide investors with exposure to the largest and most actively traded stocks on the NASDAQ. The Invesco QQQ Trust (NASDAQ:QQQ) is one of the most popular ETFs in the United States and had nearly $227 billion in assets under management as of December 18. Over the past decade, the Invesco QQQ Trust (NASDAQ:QQQ) has outperformed the S&P 500 nine out of ten times.

The Index has outperformed the market so far this year supported by several major technological advancements as well as operational measures undertaken by its components. Recent advancements in generative artificial intelligence is one of the biggest developments in the technology space this year with significant potential to disrupt nearly all aspects of our lives in the upcoming years. GPU-maker NVIDIA Corporation (NASDAQ:NVDA) has been the one of the biggest beneficiaries of this advancement so far, with share price up nearly 236% year-to-date. The Nasdaq-100, as a whole, has gone up nearly 54% year-to-date, compared to nearly 24% for the S&P 500 Index. You can read more about the recent interest rate cuts which have led to the latest rally in the stock markets here.

Our list of 16 most promising QQQ stocks according to hedge funds includes some of the most notable names in the stock markets and includes several trillion dollar companies. These companies account for 51.5% of the ETF portfolio weightage, as of December 18. The shares of these companies have benefited from multiple factors recently, including cost cutting measures, AI revolution, and macroeconomic factors such as slowdown in interest rate increases, among others. The list includes chipmaker and hardware beneficiary of AI boom, NVIDIA Corp (NASDAQ:NVDA), and two trillion-dollar software & internet companies, Alphabet Inc. (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT), competing for the leadership position on the search engine and software side of things.

Our list also includes other leading technology companies such as Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Elon Musk’s electric vehicle company, Tesla, Inc. (NASDAQ:TSLA), among others.

A robotic arm holding a semiconductor chip, emphasizing the precision and quality of the company's production equipment.

Methodology

We sifted through holdings of the Invesco QQQ Trust (NASDAQ:QQQ) and sourced the hedge fund sentiment for each stock from Insider Monkey’s database. As of September 30, 2023, Insider Monkey tracks 910 elite money managers. We narrowed down our selection to stocks that were the most widely held by hedge funds. Finally, we ranked our picks in ascending order of the number of hedge funds that have positions in them.

16. T-Mobile US, Inc. (NYSE:TMUS)

Number of Hedge Fund Holders: 79

T-Mobile US, Inc. (NYSE:TMUS) is a wireless network operator based in Bellevue, Washington delivering an advanced 4G LTE and a transformative nationwide 5G network through its flagship brands, T-Mobile, and Metro by T-Mobile. It had nearly 118 million total customers as of September 30, 2023.

T-Mobile US, Inc. (NYSE:TMUS) has been aggressively working on its plan to return value to stockholders. During Q3 2023, the company repurchased $2.7 billion worth of its shares and introduced a dividend for the first time in the company’s history. The remaining authorization for additional stock repurchases and dividends through December 2024 is $17.5 billion.

As of Q3 2023, 79 of the 910 hedge funds tracked by Insider Monkey owned shares of T-Mobile US, Inc. (NYSE:TMUS), valued at $11.0 billion. Its largest shareholder was Warren Buffett’s Berkshire Hathaway with ownership of 5.2 million shares valued at $734 million.

In its “ClearBridge Dividend Strategy” Q3 2023 investor letter, ClearBridge Investments, an investment management company, made the following comments about T-Mobile US, Inc. (NYSE:TMUS):

“T-Mobile is the best-in-class player in the wireless space, delivering the strongest growth with the lowest cost structure and the best consumer proposition. T-Mobile’s strength is rooted in its advantaged competitive position. Its superior spectrum holdings enable it to provide better wireless service at meaningfully lower cost. T-Mobile’s annual capital expenditures run about $10 billion, on the order of half the amount its peers must spend. Due to its lower cost structure, T-Mobile can undercut its competitors on price while still generating compelling profitability and returns. This combination — superior service at lower prices — has enabled TMobile to outgrow its competition. In the three years since completing its merger with Sprint, T-Mobile has grown its post-paid subscriber base by about 22%. Over the same period, AT&T’s has grown by about 14%, while Verizon’s by less than 5%. [. . .] Free cash flow in 2023 is expected to come in around $13.5 billion, up from less than $8 billion last year. In 2024 free cash flow is expected to grow by over 20% to approximately $17 billion — providing a 10% yield based on today’s stock price.”

15. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 81

Based in Austin, Texas, Tesla, Inc. (NASDAQ:TSLA), designs, develops, manufactures, sell and leases fully electric vehicles and energy generation and storage solutions. Its current portfolio of products includes Model 3 and Model S sedans, Model Y, Model X SUVs, and Cybertruck, while upcoming products include Tesla Roadster and Tesla Semi – a light commercial vehicle.

Tesla, Inc. (NASDAQ:TSLA) produced 430,488 vehicles in Q3 2023 and delivered more than 435,000 vehicles during the same period. The company has six large scale manufacturing facilities across the world, including its first plant in California, and gigafactories across Nevada, New York, Shanghai, Texas, and Berlin.

Tesla, Inc. (NASDAQ:TSLA) started delivering its long-awaited Cybertruck with a delivery event held its gigafactory in Austin, Texas, on November 30. According to crowdsourcing data, more than 2.0 million Tesla Cybertruck have been preordered.

Tesla, Inc. (NASDAQ:TSLA) shares were held by 81 hedge funds with total value of $5.8 billion, as of September 30. Cathie Wood’s ARK Investment Management, and Philippe Laffont’s Coatue Management were the biggest shareholders of the company with ownership of nearly $1.0 billion worth of shares, each.

14. Booking Holdings Inc. (NASDAQ:BKNG)

Number of Hedge Fund Holders: 81

Based in Norwalk, Connecticut, Booking Holdings Inc. (NASDAQ:BKNG), is a leading provider of online travel and related services with a presence in more than 220 countries and territories across the world. The company provides its services primarily through six online platforms: Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable. It boasts more than 28 million listings of hotels, homes, apartments, and other unique places to stay across its platforms.

As of Q3 2023, 81 of the 910 hedge funds tracked by Insider Monkey held shares of Booking Holdings Inc. (NASDAQ:BKNG), worth $8.0 billion. Its largest shareholder was Arrowstreet Capital with ownership of 0.5 million shares valued at $1.6 billion.

RiverPark Advisors, an investment advisory firm, made the following comments about Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2023 investor letter:

“Booking is the world’s leader in online travel, operating in 200 countries with brands including Booking.com, priceline.com, agoda.com, Kayak, Rentalcars.com and OpenTable. The company has been a dominant on-line travel agency for more than a decade with a high-margin business model that requires limited capital expenditures, typically less than 3% of revenue, producing $6.2 billion of free cash flow for 2022 and $7.2 billion expected for 2024. The company has used its free cash flow for episodic acquisitions as well as to return cash to shareholders. BKNG is well positioned in travel as the largest player in online lodging bookings and the second largest player in alternative accommodations.”

13. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 83

New York-based Datadog, Inc. (NASDAQ:DDOG) provides a monitoring platform for cloud applications. Its SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, real-user monitoring, and many other capabilities to provide unified, real-time observability and security for the entire technology stack.

On November 7, Datadog, Inc. (NASDAQ:DDOG) released its financial results for Q3 2023. Its revenue increased by 25% y-o-y to $548 million while it generated a net income of $23 million, compared to a net loss of $26 million. Its normalized EPS of $0.45 exceeded consensus estimates by $0.11.

On December 7, Stifel analyst Brad Reback upgraded Datadog, Inc. (NASDAQ:DDOG) to ‘Buy’ from ‘Hold’ and raised the price target for its shares to $140 from a previous price target of $98.

According to the Insider Monkey data on 910 leading hedge funds, 83 hedge funds were long Datadog, Inc. (NASDAQ:DDOG) shares as of Q3 2023. Marshall Wace LLP was the largest hedge fund shareholder with ownership of 3.1 million shares valued at $282 million.

12. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 86

Intuit Inc. (NASDAQ:INTU) is a global financial technology platform allowing consumers and small businesses to manage their finances, get and retain customers, save money, pay off debt and do their taxes with ease, among other solutions. Its platforms include TurboTax, Credit Karma, QuickBooks, and Mailchimp and serve over 100 million customers.

On November 28, Intuit Inc. (NASDAQ:INTU) released its financial results for the quarter ended October 31, 2023. Its total revenue increased by 15% y-o-y to $3.0 billion, while it reported a net income of $241 million. It reported a normalized EPS of $2.47 for the quarter, $0.49 more than the analyst consensus. The company also declared a quarterly cash dividend of $0.90 per share, which represents a 15% increase compared to the previous year.

Following the earnings release, Mizuho analyst Siti Panigrahi raised the price target for Intuit Inc. (NASDAQ:INTU) shares to $625 from $600 and maintained a ‘Buy’ rating.

As of Q3 2023, 86 of the 910 hedge funds tracked by Insider Monkey held Intuit Inc. (NASDAQ:INTU) shares valued at a combined total of $6.2 billion. Ken Fisher’s Fisher Asset Management was its largest hedge fund shareholder with ownership of 2.8 million shares valued at $1.5 billion.

11. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 87

San Jose, California-based Broadcom Inc. (NASDAQ:AVGO) is a global technology leader that designs, develops, and supplies semiconductor and infrastructure software solutions. Its  solutions include data center networking and storage, enterprise, mainframe, and cybersecurity software focused on automation, monitoring and security, smartphone components, telecoms, and factory automation.

On May 26, 2022, Broadcom Inc. (NASDAQ:AVGO) announced that it had agreed to acquire VMware, Inc. (NYSE:VMW), a leading enterprise software solutions provider, in a cash and stock transaction valued at $61 billion. The transaction was finally closed on November 22, 2023.

Broadcom Inc. (NASDAQ:AVGO) released its fourth quarter and fiscal year ended October 29, 2023, on December 7. It posted strong results during the year, driven by investments in “accelerators and network connectivity for AI by hyperscalers”. The company also raised its quarterly dividend payout by 14% to $5.25 per share.

Like other stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Broadcom Inc. (NASDAQ:AVGO) is among the 16 most promising QQQ stocks according to hedge funds.

10. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 90

Boise, Idaho-based Micron Technology, Inc. (NASDAQ:MU) is a leading semiconductor manufacturer providing memory and storage solutions. It delivers a portfolio of high-performance DRAM, NAND and NOR memory and storage products through Micron® and Crucial® brands.

In September, Micron Technology, Inc. (NASDAQ:MU) reported the financial results for the quarter ended August 31, 2023. It generated a revenue of $4.0 billion and a net loss of $1.4 billion. Normalized EPS of -$1.07 for the quarter, surpassed the consensus estimates by $0.11.

Following the earnings release, Rosenblatt analyst Hans Mosesmann reiterated a ‘Buy’ rating for Micron Technology, Inc. (NASDAQ:MU) shares while maintaining a $100 target price.

According to the Insider Monkey data on 910 leading hedge funds, 90 hedge funds were long Micron Technology, Inc. (NASDAQ:MU) shares as of Q3 2023, with the total shares held by hedge funds valued at $4.4 billion. Ken Griffin’s Citadel Investment Group was the largest shareholder on record with ownership of 8.1 million shares valued at $552 million.

9. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 102

Netflix, Inc. (NASDAQ: NFLX) is a leading provider of streaming entertainment services based in Los Gatos, California. It boasts more than 247 million paid memberships across more than 190 countries and offers a film and television series library through distribution deals as well as its own productions.

On October 18, Netflix, Inc. (NASDAQ:NFLX) released its financial results for Q3 2023. The company posted a revenue of $8.5 billion, which represents nearly 8% y-o-y growth, and a net income of $1.7 billion. It also added 8.8 million new paid members to its platform during the quarter which represents nearly 11% growth, nearly double the growth rate in Q3 2022.

Netflix, Inc. (NASDAQ:NFLX) is also making efforts to return capital to its shareholders through share repurchases. During the quarter, it repurchased nearly $2.5 billion worth of its shares and also increased the company’s buyback authorization by $10 billion.

On December 18, Morgan Stanley analyst Benjamin Swinburne raised the price target for Netflix, Inc. (NASDAQ:NFLX) shares to $550 from $475 and maintained an ‘Overweight’ rating for its shares.

Like other stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Netflix, Inc. (NASDAQ:NFLX) is among the 16 most promising qqq stocks according to hedge funds.

8. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 110

Based in Santa Clara, California, Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company using high-performance computing, graphics, and visualization technologies to provide computing solutions for cloud, edge, and end devices.

On June 14, Advanced Micro Devices, Inc. (NASDAQ:AMD) unveiled new EPYC processors for cloud native and technical computing for data centers. The company also revealed its AI Platform strategy which includes MI300 Series accelerator family, as well as software solutions.

On October 10, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced the signing of a definitive agreement to acquire Nod.ai to expand the company’s open AI software capabilities. Earlier this year in August, the company acquired Mipsology, and AI software company with proven expertise delivering AI software and solutions running on top of AMD adaptive computing silicon.

As of Q3 2023, 110 hedge funds tracked by Insider Monkey held shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), worth $9.2 billion. Ken Fisher’s Fisher Asset Management is its largest hedge fund shareholder with ownership of 27.8 million shares valued at $2.9 billion.

7. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 112

Adobe Inc. (NASDAQ:ADBE) is a leading digital media and digital marketing solutions company based in California. Its software and cloud solutions are packaged into three cloud solutions: Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud.

On September 15, 2022, Adobe Inc. (NASDAQ:ADBE) announced that it had entered into an agreement to acquire Figma, a collaborative design platform, for $20 billion comprising half cash and half stock compensation.

The proposed merger faced significant scrutiny from multiple regulatory authorities including U.K. antitrust authority, the Competition Markets Authority, or CMA, and the European Commission which opened a full-scale investigation into the merger.

On December 18, Adobe Inc. (NASDAQ:ADBE) and Figma announced that the companies have mutually agreed to terminate their previously announced merger agreement. Adobe Inc. (NASDAQ:ADBE) will make a cash payment of $1.0 billion to Figma as a “termination fee”.

As of Q3 2023, Adobe Inc. (NASDAQ:ADBE) shares were held by 112 out of 910 hedge funds tracked by Insider Monkey with a total value of $8.2 billion. Its largest shareholder was Fisher Asset Management with ownership of nearly 4.5 million shares valued at $2.3 billion.

6. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 134

Apple Inc. (NASDAQ:AAPL) is a leading technology company focused on the designing, manufacturing, and marketing of smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services. It released worldwide the latest version of its flagship smartphone titled iPhone 15 on September 22 earlier this year. Sales for the models have remained strong in the early period and analysts expect positive results from the release.

The quarterly revenue of Apple Inc. (NASDAQ:AAPL) once again declined by 1% on a y-o-y basis in the quarter ended September 30. The company posted a revenue of $89.5 billion and a net income of $23 billion, which translated to an adjusted EPS of $1.46.

As of Q3 2023, Apple Inc. (NASDAQ:AAPL) shares were held by 134 of the 910 hedge funds tracked by Insider Monkey with the total shares held by hedge funds valued at a whopping $179 billion. Warren Buffet’s Berkshire Hathaway was its biggest shareholder with ownership of 915.6 million shares valued at $157 billion.

In its Baron Technology Fund Q3 2023 investor letter, Baron Funds, an investment management firm, made the following comments about Apple Inc. (NASDAQ:AAPL):

“Despite [the] quarterly fluctuations in product sales, we are encouraged by several long-term trends, including: (1) revenue from higher-margin services like the App Store, iCloud, and Apple Pay, which are growing faster than the overall business, driving better revenue visibility and higher free-cash-flow (FCF) margins; (2) continued gains in global market share in smartphones, wearables, and other hardware categories; and (3) consistent returns of capital to shareholders via share repurchases and dividends. On top of these trends in the core business, Apple is thoughtfully investing in new categories like augmented reality, search, financial services, and streaming media content. We took advantage of weakness in the quarter to add to our position in Apple.”

Click to continue reading and see 5 Most Promising QQQ Stocks According to Hedge Funds.

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Disclosure: None. 16 Most Promising QQQ Stocks According to Hedge Funds is originally published on Insider Monkey.


26.

ARKF ETF: Up 86% YTD, Should You Buy or Sell?

2023-12-17 10:27:26 by TipRanks from TipRanks

With an impressive ~86% gain year-to-date, the ARK Fintech Innovation ETF (NYSEARCA:ARKF) is catching the eyes of investors. While the fund deserves credit for its strong 2023 performance, caution is likely warranted going forward due to its lack of diversification, disappointing performance over the long run, and high expense ratio. Furthermore, investors should note that analysts have a fairly underwhelming price target for ARKF. I am neutral on the ETF.

What is the ARKF ETF’s Strategy?

ARKF is one of several popular ETFs from Cathie Wood’s firm ARK Invest. Like its ARK counterparts, the fund is actively managed and focused on disruptive technology companies. In this case, ARKF is focused specifically on fintech stocks.  

ARK Invest defines these as companies involved in “mobile payments, digital wallets, peer-to-peer lending, blockchain technology, and financial risk transformation.” Think companies like Coinbase Global (NASDAQ:COIN), Shopify (NYSE:SHOP) and Block (NYSE:SQ), which are three of ARKF’s top holdings.  

ARKF’s Holdings

ARKF owns 30 stocks, and its top 10 holdings make up nearly two-thirds of the fund’s assets. You’ll find an overview of ARKF’s top 10 holdings from TipRanks’ ETF holdings tool below.

As you can see, this is not a very diversified fund, and it gives investors a lot of exposure to its top holdings. Coinbase, in particular, has a large weighting of 13.2%. 

Coinbase has had a banner year, posting a 340% gain year-to-date, which has helped drive ARKF higher. 

But Coinbase typically trades in line with the ebbs and flows of the crypto market and the price of Bitcoin (BTC-USD) in particular, which can be volatile. When the price of Bitcoin goes down, COIN stock’s price often declines significantly. This leaves ARKF holders with exposure to plenty of potential volatility. 

Just as this large position in Coinbase has benefited ARKF this year, this heavy level of concentration also has the potential to hamper ARKF if it sells off. For this reason, it’s worth noting that the average price target for Coinbase stock implies downside potential of 37.2% from its current price.  

In addition to this large Coinbase stake, ARKF also has a large position in Block. Block also often trades in tandem with Bitcoin, so, again, ARKF gives investors quite a bit of exposure to the potential volatility of the crypto market. 

Other prominent holdings include e-commerce players like Shopify and Global-E (NASDAQ:GLBE), online gambling and daily fantasy sports provider DraftKings (NASDAQ:DKNG), and online brokerage Robinhood Markets (NASDAQ:HOOD).   

Underwhelming Long-Term Performance

ARKF is up big this year, but this is a departure from its performance in recent years. For example, the fund lost 65.1% in 2022 and 17.8% in 2021. To ARKF’s credit, it returned 108% in 2020, but as you can see, its performance has been volatile and inconsistent from year to year. 

As of November 30th, ARKF has annualized losses of 20.3% over the past three years, which is a fairly disappointing performance, especially since the broader market performed well during this time frame. 

For example, the Vanguard S&P 500 ETF (NYSEARCA:VOO), which simply invests in the S&P 500 (SPX), returned 9.7% on an annualized basis over this same time frame. 

Tech-oriented ETFs, like the Technology Select Sector SPDR Fund (NYSEARCA:XLK) and the Invesco QQQ Trust (NASDAQ:QQQ), which would be even more appropriate peers for ARKF, outperformed it by an even larger margin. As of November 30th, XLK has an annualized three-year return of 15.4%, while QQQ has an annualized three-year return of 9.7%.

It’s hard to make the case for investing in ARKF when it has underperformed both the broader market and these tech-focused funds over the past three years.  

High Expense Ratio

Another negative aspect of ARKF is that it is an expensive fund. An expense ratio of 0.75% means that investors putting $10,000 into the fund will pay $75 in fees over the next year. 

These fees can really add up over time. For example, if the fund returns 5% per year going forward and maintains this 0.75% expense ratio, these same investors would pay $240 in fees over three years. 

Looking further out, assuming the same parameters, these investors would pay $417 in fees over five years and a steep $931 in fees over a decade. Meanwhile, XLK and QQQ, the tech-focused ETFs mentioned above, feature expense ratios of just 0.10% and 0.20%, respectively, making them bargains compared to ARKF. 

Investors putting $10,000 into XLK would pay just $10 in fees in year one. Using the same parameters discussed above, these investors would pay just $32 in fees over three years, $56 in fees over five years, and $128 in fees over 10 years. 

Meanwhile, investors putting the same amount into QQQ would pay $20 in year one, $64 over three years, $113 over five years, and $255 over 10 years. Below, you can check out a comparison of ARKF and these two larger ETFs using TipRanks’ ETF Comparison Tool, which allows investors to compare and contrast up to 20 ETFs at a time based on a wide variety of customizable inputs.

ARKF is an actively managed ETF, so it’s unsurprising that it is more expensive than these index funds, but given the fact that it has underperformed them over the past three years, it’s difficult to justify paying this premium for ARKF. 

Is ARKF Stock a Buy, According to Analysts?

Turning to Wall Street, ARKF earns a Moderate Buy consensus rating based on 21 Buys, nine Holds, and zero Sell ratings assigned in the past three months. The average ARKF stock price target of $25.35 implies 3.7% downside potential.

Alternatives Abound

ARKF has had a monster year, and Cathie Wood and ARK Invest deserve credit for the major comeback the fund has staged this year. However, I’m not enthusiastic about ARKF’s future performance, given its lack of diversification, its less exciting long-term track record, and the high fees it charges. 

While not directly analogous, other tech-centric ETFs like XLK and QQQ have provided better returns for a cheaper price over a three-year time frame, so investors would be wise to consider these investment opportunities before looking to ARKF. 

Disclosure


27.

2 ETFs I Like More Than Invesco QQQ Trust for 2024

2023-12-16 13:05:00 by Stefon Walters, The Motley Fool from Motley Fool

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Reflecting on the stock market in 2023, I can honestly say many major indexes and companies performed better than expected. All three major indexes (S&P 500, Dow Jones Industrial Average, and Nasdaq Composite) are positive for the year, and unless something drastic happens, they should finish the year that way.

One of the bigger winners of 2023 has been the Invesco QQQ ETF (NASDAQ: QQQ), which mirrors the Nasdaq-100 index. The Nasdaq-100 tracks the 100 largest nonfinancial stocks trading on the Nasdaq stock exchange. Its popularity has made it the second-most traded ETF in the U.S., based on daily volume traded.

Surges from megacap tech stocks can be credited for much of the Invesco QQQ ETF's success in 2023 and should continue to drive its growth. That said, regardless of how lucrative the Invesco QQQ ETF has been, there are two ETFs I like more going into 2024: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and Vanguard Growth ETF (NYSEMKT: VUG).

A more diversified approach with the S&P 500

The Invesco QQQ ETF contains companies from all major sectors, excluding financial, but it's mostly made up of technology companies. The technology sector is 57.1% of the ETF, far above the second-place consumer discretionary sector at 18.7%. That's much more concentrated than the Vanguard S&P 500 ETF.

The S&P 500 tracks the 500 largest public U.S. companies, so the Vanguard S&P 500 ETF contains roughly five times as many companies as the Invesco QQQ ETF. This allows the Vanguard S&P 500 ETF to cover a lot more ground with a single investment.

Here are the top five sectors in each ETF and how much of them they make up:

Invesco QQQ ETF Vanguard S&P 500 ETF
Technology: 57.10% Information technology: 28.10%
Consumer discretionary: 18.73% Healthcare: 13.20%
Healthcare: 7.12% Financials: 12.70%
Telecommunications: 5.48% Consumer discretionary: 10.60%
Industrials: 4.87% Communication services: 8.70%

Data source: Invesco QQQ ETF and Vanguard S&P 500 ETF fund pages. Table by author.

The concentration of technology companies has benefited the Invesco QQQ ETF because of the growth of the technology sector in general, but there's no guarantee that it will continue that way. The sector isn't invincible and has had its fair share of struggles.

The Nasdaq-100 finished 2022 down close to 33%, while the S&P 500 was "only" down by 19%. The Vanguard S&P 500 ETF's diversification helps reduce sector-specific risks, offering more stability during downturns in any specific sector, including technology.

^SPX Chart
^SPX data by YCharts

The Vanguard Growth ETF is a good mix of the two

The Vanguard Growth ETF focuses on large-cap growth stocks. It can be the sweet blend between the diversification of the Vanguard S&P 500 ETF and the growth-centric nature of many of the Invesco QQQ ETF's holdings. The Vanguard Growth ETF hasn't had the year the Invesco QQQ ETF has, but it's up over 42% in 2023 -- more than double the S&P 500's returns.

The Vanguard Growth ETF contains 221 companies, and many of its top holdings overlap the Vanguard S&P 500 ETF and Invesco QQQ ETF's holdings. The only companies in the Vanguard Growth ETF's top 10 holdings that aren't in the Invesco QQQ ETF's top 10 are Eli Lilly and Visa.

Although the Vanguard Growth ETF is still tech-concentrated (Apple and Microsoft make up over 25% of it), the number of holdings allows for a broader reach. This wider coverage provides a more balanced investment approach, satisfying investors who want the stability of large-cap stocks while being more aggressive with exposure to growth opportunities.

It doesn't have to be one or the other

Each ETF has its unique value proposition, so different parts may appeal to different investors. It's not a this-or-that situation where you have to choose one, but if you're going to invest in multiple ETFs, be mindful of the overlap of companies. This is extra important, considering most market-cap-weighted ETFs will contain many of the same megacap companies.

A portfolio with hundreds of companies can have its advantages, but some of those advantages go away if the vast majority is concentrated in a few companies. By carefully balancing your investments between ETFs (not just these three, but in general), you can capitalize on each one's unique strength while mitigating risks.

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Stefon Walters has positions in Apple, Microsoft, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Vanguard Index Funds-Vanguard Growth ETF, Vanguard S&P 500 ETF, and Visa. The Motley Fool has a disclosure policy.


28.

How the Invesco QQQ ETF Could Turn You Into a Millionaire

2023-12-15 12:27:00 by Stefon Walters, The Motley Fool from Motley Fool

GettyImages-135538001-d773358147f2445688c73d4ac04e9b88

Comparing 2022 losses to 2023 gains has truly shown a tale of two years for many stocks and major U.S. stock market indexes. A prime example of this contrast is the Nasdaq-100 index, which was down 33% in 2022 and is up over 46% in 2023, as of Dec. 6.

Despite swings, the Nasdaq-100 has averaged 17.6% annual total returns over the past decade, roughly 5.7 percentage points more than the S&P 500.

^NDX Chart
^NDX data by YCharts.

Note that averaging 12.25% annual returns would be enough to turn a $100,000 lump sum, or $1,200 per month, into $1 million in 20 years.

There's no way to predict the Nasdaq-100's trajectory, but it's in a position to maintain a strong performance over the next couple of decades, giving investors a shot at making a lot of money. But how to invest in it without separately buying shares in all 100 stocks?

The most popular way to invest in the Nasdaq-100

The Nasdaq-100 index tracks the largest 100 nonfinancial companies trading on the Nasdaq Stock Exchange. It's similar to the popular Nasdaq Composite, but much more concentrated (roughly 100 stocks versus more than 3,000) and missing small-cap and mid-cap companies.

The Invesco QQQ ETF Trust (NASDAQ: QQQ) is an exchange-traded fund that mirrors the Nasdaq-100 but trades on the stock exchange like regular stocks. Just like you can buy shares of Coca-Cola on your brokerage platform, you can buy shares of the Invesco QQQ ETF Trust.

The concentration of megacap tech stocks has recently benefited the Nasdaq-100 as those stocks have risen. The ETF's top five holdings are below, along with the year-to-date gains as of Dec. 6.

Stock Percentage of the QQQ ETF Year-to-Date Gains
Apple 11.11% 49%
Microsoft 10.29% 55%
Amazon 5.60% 75%
Nvidia 4.22% 218%
Meta Platforms 3.74% 165%

Source: Invesco. Gains are rounded to the nearest percentage.

Having close to 35% of the fund in these five stocks isn't the most diversified approach, but the Invesco QQQ ETF Trust's heavy hitters could be the catalyst to helping investors hit the $1 million mark.

It's going to come down to some of the top players

The Invesco QQQ ETF's growth will rely heavily on emerging market trends. There's the rise of electric vehicles, advancements in healthcare technology, AI developments, the growth of e-commerce, increased cloud computing, and other developments that are bound to shape the next few decades.

There are no guarantees, but I think a lot of the Invesco QQQ ETF's top holdings will be the companies driving many of these developments, ushering them into the mainstream, and profiting in the process. With that should come sustained growth.

Technology is the most represented sector (57.1%) in the Invesco QQQ ETF, but other top sectors, like consumer discretionary (18.73%), healthcare (7.12%), and telecommunications (5.48%), all contain notable companies that should help drive growth. For example, look at the performance of Lululemon Athletica, Intuitive Surgical, and T-Mobile over the past decade.

TMUS Total Return Level Chart
TMUS Total Return Level data by YCharts.

Their performance won't be as impactful as the top companies, but with only 100 total holdings, every bit of growth counts.

You don't want the ETF taking up your whole portfolio

The Invesco QQQ ETF's concentration can offer significant growth opportunities, but there is risk in being so reliant on the technology sector (or any one sector in general). It looks like its top holdings should continue growing at impressive paces, but the saying "don't put all your eggs in one basket" is timeless for a reason.

Investors should not lose sight of the importance of diversification. The ETF isn't meant to be a one-stop-shop for your portfolio. That said, it can serve a great role in a portfolio and has the potential to turn investors into millionaires.

Should you invest $1,000 in Invesco QQQ Trust, Series 1 right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Amazon, Apple, Intuitive Surgical, Lululemon Athletica, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends T-Mobile US and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.


29.

ARKW ETF: Time to Pump the Brakes after 94% Gain

2023-12-15 03:41:12 by TipRanks from TipRanks

The ARK Next Generation Internet ETF (NYSEARCA:ARKW) is enjoying a banner year in 2023, with a 94.4% gain year-to-date. Its strong performance granted ARK founder and CIO Cathie Wood the right to run a much-needed victory lap against her doubters following a tough 2022 for ARKW and several other ARK funds. 

However, after its substantial gains, investors would likely do well to pump the brakes and not chase the ETF’s performance. While 2023 has been rewarding for ARKW’s holders, the fund lacks diversification, has a lackluster track record over the longer term, and charges a sky-high expense ratio. 

What is the ARKW ETF’s Strategy? 

ARKW is an actively-managed ETF that invests in the theme of next-generation internet.

ARK defines next-generation internet companies as those that “are focused on and expected to benefit from shifting the bases of technology infrastructure to the cloud, enabling mobile, new and local services, such as companies that rely on or benefit from the increased use of shared technology, infrastructure and services, internet-based products and services, new payment methods, big data, the internet of things, and social distribution and media.”

These companies can include those involved in cloud computing and cybersecurity, e-commerce, big data and artificial intelligence (AI), mobile technology and the Internet of Things, social platforms, and blockchain technology. 

Technology stocks, cryptocurrency, and AI have been some of the market’s big winners in 2023, driving ARKW’s stellar 2023 performance. 

What Does ARKW’s Portfolio Look Like? 

ARKW holds 35 stocks, and its top 10 holdings make up 63% of the fund. This isn’t a very diversified ETF, and it is fairly top-heavy when it comes to its top few holdings. 

Below, you’ll find an overview of ARKW’s top 10 holdings using TipRanks’ holdings tool.

As you can see, Coinbase Global (NASDAQ:COIN) is ARKW’s largest position, with a large 11.8% weighting. 

Coinbase has posted an incredible 357% gain year-to-date, doing much of the heavy lifting to propel ARKW higher in the process. 

However, as we have seen in the past, Coinbase can be extremely volatile, and when the price of Bitcoin (BTC-USD) and other cryptocurrencies go down, shares of Coinbase often fall rapidly. So, just as the large Coinbase position has benefited ARKW in 2023, it has the potential to drag ARKW down, going forward. 

The average COIN stock price target of $95.78 implies 37.7% downside potential from here, so this is something that investors should be aware of.

In addition to this large position in Coinbase, ARKW also has a large position in the Grayscale Bitcoin Trust (OTC:GBTC). Thus, ARKW gives investors a lot of exposure to the potential volatility of the crypto market through these two concentrated positions. 

Additionally, TipRanks’ Smart Score isn’t very enthusiastic about ARKW’s top holdings. The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating. 

Only two of ARKW’s top 10 holdings, Block (NYSE:SQ) and Roblox (NYSE:RBLX), feature Outperform-equivalent Smart Scores of 8 or higher. Seven of these top holdings feature Neutral-equivalent Smart Scores, and Unity Software (NYSE:U) fares particularly poorly, with the lowest possible Underperform-equivalent Smart Score. 

In summary, while some of ARKW’s top positions have done very well this year, driving ARKW’s strong performance, there is plenty of potential for volatility from here, and the portfolio receives a fairly lackluster rating from the Smart Score. 

ARKW has a Neutral-equivalent ETF Smart Score of 7 out of 10.

Underwhelming Performance

While ARKW has been a strong performer this year, this hasn’t always been the case. 

The fund struggled mightily in 2022, with a loss of 67.5% for the year. The year before was also a challenging one for the fund, as it lost 16.7%. 

I give ARKW credit for bouncing back in 2023, but this has not been a consistent long-term winner. In fact, as of November 30th, the fund has lost 20.1% on an annualized basis over the past three years (as of November 30th). Over the past five years, it has gained a more respectable 7.8% on an annualized basis. 

Based on this performance, ARKW has badly lagged behind other popular technology-focused ETFs like the Invesco QQQ Trust (NASDAQ:QQQ) and the Technology Select Sector SPDR ETF (NYSEARCA:XLK).

As of November 30th, QQQ has returned 9.7% on an annualized basis over the past three years and 18.9% over the past five years, both of which are far superior to ARKW’s returns.  

Similarly, as of the same date, XLK has posted an even better 15.4% annualized return over the past three years and 18.9% over the past five.

Exorbitant Expense Ratio

This brings us to the final concern about ARKW. While ARKW has underperformed these popular technology ETFs, it is also much more expensive than both of them. ARKW charges a sky-high expense ratio of 0.87%. QQQ charges 0.20%, while XLK charges an even lower 0.10%. 

This means that ARKW charges $87 in annual fees on an investment of $10,000, while QQQ charges $20 and XLK charges just $10. 

The disparity in these fees adds up to make a significant difference over time. Assuming that each fund returns 5% per year, the investor that put $10,000 into ARKW will pay an incredibly steep $1,072 in fees after 10 years. Meanwhile, the QQQ investor and the XLK investor will have paid just $255 and $128 in fees, respectively. 

While ARKW is actively managed and thus inherently more expensive than these index funds, it has underperformed them by a significant margin, so it hasn’t generated the type of track record to credibly justify these higher fees. 

Below, you’ll find a comparison between ARKW, QQQ, and XLK created using TipRanks’ ETF Comparison Tool, which enables users to compare up to 20 ETFs at a time based on a variety of factors.

Is ARKW Stock a Buy, According to Analysts?

Turning to Wall Street, ARKW earns a Moderate Buy consensus rating based on 26 Buys, 10 Holds, and zero Sell ratings assigned in the past three months. The average ARKW stock price target of $72.99 implies 2.7% downside potential.

Pump the Brakes 

In conclusion, 2023 has been a great year for ARKW, and its holders deserve to celebrate a bit after trying times in 2021 and 2022. However, I would not chase the fund from here and would advise caution due to its lack of diversification, high concentration in several volatile names, underwhelming performance track record, and steep expense ratio. 

Investors interested in themes like technology, AI, and the internet can alternatively consider popular tech ETFs, like QQQ and XLK, which give exposure to many of these same themes. These ETFs come with a lower price point and have superior track records of long-term performance.

I am a fan of Wood and admire her investing style, ability to go against the grain, zeal for finding disruptive technology companies, and the conviction that she has in her ideas. Nevertheless, for the reasons mentioned earlier, this ETF is a pass for me.

Disclosure


30.

I Just Opened an Investment Account for My Newborn. Here Was My First Purchase

2023-12-14 15:15:00 by Keithen Drury, The Motley Fool from Motley Fool

Elder person planting flowers with their grandchild

The most important investment decision you'll ever make is to start investing. Time is your best friend in investing, and if you start an account when your loved one (or friend) is young, you'll set them up for the best possible outcome.

I recently did the same for my newborn, hoping to set her up for college, retirement, or other expenses she'll incur early on in adulthood. Some may think determining my first investment for her would be difficult, but it was a no-brainer for me.

The Nasdaq-100 lists some of the best companies

My first purchase for my daughter was the Invesco QQQ Trust (NASDAQ: QQQ). This ETF tracks the Nasdaq-100, which comprises some of the most innovative companies in today's society. Take a look at the top 10 holdings in the fund and tell me that these companies won't continue changing the world over the next couple of decades.

Company Allocation
Apple (NASDAQ: AAPL) 11.3%
Microsoft (NASDAQ: MSFT) 10.4%
Amazon (NASDAQ: AMZN) 5.7%
Nvidia (NASDAQ: NVDA) 4.3%
Meta Platforms (NASDAQ: META) 3.7%
Broadcom (NASDAQ: AVGO) 3%
Alphabet Class A (NASDAQ: GOOGL) 2.9%
Alphabet Class C (NASDAQ: GOOG) 2.9%
Tesla (NASDAQ: TSLA) 2.8%
Adobe (NASDAQ: ADBE)
2.2%

Data source: Invesco. Makeup as of Dec. 6, 2023.

This group is a solid pick, and the other constituents of the Nasdaq-100 are also strong candidates to help this investment move forward. Within this group are exciting trends, like cloud computing, generative AI, electric vehicles, and more. 

But why did I choose the QQQ over other investment options, like an S&P 500 index fund or a total market fund? The truth is, I didn't. The investment account also contains the Vanguard S&P 500 (NYSEMKT: VOO) and Vanguard Total Stock Market (NYSEMKT: VTI) ETFs, which are added for balance.

The Nasdaq-100 notoriously became inflated during the dot-com burst in the early 2000s, and I'd like to balance out the account with more conservative picks because another tech bubble will likely occur at some point. Even with that threat, I still think the QQQ is the best pick of the three.

The QQQ's performance has been stellar

Over the past decade, the QQQ has trounced the other two funds.

QQQ Total Return Level Chart
QQQ Total Return Level data by YCharts.

The dominance also stretches back even further. If I had taken the same investing approach 18 years ago (to simulate what would have happened if someone did what I'm doing) with $1,000, this would be the result.

QQQ Total Return Level Chart
QQQ Total Return Level data by YCharts. Note: The VOO fund was created in 2010, so another S&P 500 index fund was used.

Ending up with nearly double your money at the end of the run is incredible, and that is why I'm choosing to invest in the QQQ at a higher concentration over the others. So, why don't I go all-in on the QQQ versus the others if I'm confident in its outperformance?

Well, tech is rather hot right now, and it has led to some inflated valuations. While it's not near the levels seen during the tech bubble, they are high. I want to keep the account fairly balanced, so having both options is smart, especially because the S&P 500 doesn't have the same tech concentration as the QQQ.

There's nothing wrong with the other indexes, but grabbing a share or two of the QQQ is a surefire way to set your kids up for long-term investment success. And it's also a fantastic way to invest for retirement.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Adobe, Alphabet, Amazon, Invesco Qqq Trust, Series 1, Tesla, Vanguard Index Funds-Vanguard Total Stock Market ETF, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Adobe, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard Index Funds-Vanguard Total Stock Market ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2024 $420 calls on Adobe and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.


31.

How ETFs can jumpstart retirement investing

2023-12-13 18:31:57 by Nicholas Jacobino from Yahoo Finance Video

Investing for retirement can seem daunting, with seemingly endless possibilities, With so many economic headwinds, it can be nerve wracking to choose the right place to start. According to a survey from BlackRock, a staggering 57 million Americans lack access to a 401(k) or employer-sponsored retirement plan and 40% of those surveyed feel they are off-track for retirement goals. Rachel Aguirre, BlackRock US Head of iShares Product, joins Yahoo Finance to discuss the results of the survey and give insight into why ETFs should be on the top of Americans list to start investing for retirement. Aguirre gives advice on investing: "It is just absolutely necessary that people begin to invest in the market and we know that that has been challenging in the recent history just because of the volatility that we have been experiencing in the market. But, here's the thing, one of the things we like to say is that time in the market is so much more important than trying to time the market. It's nearly impossible to time the market, but if you are a long-term investor, you have to be in the market." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.


32.

PPI Flat Month Over Month, +2.0% Year Over Year

2023-12-13 15:14:00 by Mark Vickery from Zacks

November Producer Price Index (PPI) results are out this morning, further demonstrating how far levels of inflation have come down this year. Headline PPI month over month was flat — 0.0%, down from the +0.1% expected and up from the anomalous -0.5% the previous month. Stripping out volatile food and energy prices, we also wind up at 0.0% — flat with the downward revision for October levels. Ex-food, energy and trade, +0.1% is the number, which is in-line with expectations.

That said, month-over-month inflation reads often do have near-term issues that may make things hazy. Year over year, headline CPI came in at +0.9%, 10 basis points (bps) lower than expected and 40 bps from last month’s +1.3%, as well as the lowest print since January’s +0.3%. Core year over year reached +2.0% — the exact optimum level of inflation the Fed seeks — and 20 bps below estimates. This is also 40 bps under the downwardly revised +2.4% reported for October. Ex-food, energy and trade, we get +2.5% — the lowest print since February of 2021.

Thus, not only are we seeing PPI numbers continue to move in the preferred direction for the Fed, we’re already back to pre-Covid levels. We’re now seven straight months sub-3% on core PPI year over year, and we should remember that this data feeds into the Fed’s preferred economic metric, Personal Consumption Expenditures (PCE). (The next PCE report is expected Friday, December 22.) These figures have, in fact, come down precipitously, from +9.6% in April of 2022 and +5.7% in January of this year.

All of this is to say the Fed is now even less likely to move on interest rates this afternoon at 1:00pm ET. In fact, the now dis-inflationary reads on PPI wholesale pricing may actually wring a few words about potential interest rate cuts next year. There was some idea that perhaps Fed Chair Jay Powell was going to forego any sort of discussion about cutting rates, but the fact of the matter is, PPI numbers this morning are really helping the “soft landing” scenario come into focus.

Pre-market futures are up again, but not more so than they were prior to the PPI print. This would indicate that what Powell has to say about the future of interest rates is of higher value to market participants than today’s PPI — or even yesterday’s decent Consumer Price Index (CPI) figures. Regardless, however — and whether or not the Fed wishes to declare victory over inflation — PPI looks to have been the first economic metric to have reached the Promised Land.

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33.

Want to Invest in the "Magnificent Seven" Stocks? Buy This Top ETF.

2023-12-13 11:45:00 by Matthew DiLallo, The Motley Fool from Motley Fool

A person near several upward pointing arrows.

The "Magnificent Seven" stocks have produced magnificent returns over the years. The seven companies focused on technology megatrends -- Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla -- have absolutely obliterated the S&P 500:

Magnificent Seven Stock

1-Year Return

5-Year Return

10-Year Return

Apple

36%

358%

906%

Amazon

64%

78%

765%

Alphabet (Google)

43%

154%

380%

Meta Platforms (Facebook)

182%

132%

441%

Microsoft

51%

242%

844%

Nvidia

175%

1170%

10510%

Tesla

31%

860%

1600%

S&P 500

17%

76%

150%

Data source: Ycharts.

The tech trends driving their market-crushing returns (e.g., artificial intelligence, cloud computing, e-commerce, and electric vehicles) still have long growth runways ahead. That could give the Magnificent Seven the power to continue outperforming. However, instead of buying all seven stocks, investors could consider taking an even more passive approach by investing in an exchange-traded fund (ETF) with a high concentration of those stocks. The Invesco QQQ Trust (NASDAQ: QQQ) stands out for its outsized exposure to the Magnificent Seven.

What is the Invesco QQQ Trust?

The Invesco QQQ launched more than two decades ago. It tracks the Nasdaq-100 index, an index of the 100 largest nonfinancial companies listed on the Nasdaq exchange. The Invesco QQQ has grown into one of the largest ETFs by assets under management (AUM). It currently holds over $220 billion of client assets, making it one of the five largest ETFs by AUM in the world. It's the second-most traded ETF in the U.S. by average trading volume, showcasing its popularity among investors.

The ETF has also been a top performer over the years. It has delivered an average annualized total return of 17% over the last decade, compared to a nearly 10% average annual total return for the S&P 500. This ETF would have grown a $10,000 investment made a decade ago into nearly $50,000 today. For comparison, the same investment in an S&P 500 index would have grown to only roughly $30,000.

Driving that outperformance is the underlying growth of the companies in the index. That group has grown much faster than other benchmarks over the past 10 years:

Metric

Nasdaq-100

S&P 500

Russell 1000

Revenue

9.9%

4.9%

5.9%

Earnings

12.9%

8.5%

9.3%

Dividends

11.4%

7.8%

6.9%

10-year compound annual growth rates. Data source: Invesco.

Concentration has played a key role in the index's outsized growth. It holds 100 companies (as opposed to 500 or 1,000) heavily weighted toward faster-growing stock market sectors (technology made up 57% of its holdings). That concentration on companies benefiting from major growth trends has helped power faster financial growth and higher shareholder returns.

A magnificent way to play the Magnificent Seven

The Invesco QQQ Trust is in an excellent position to continue outperforming because it concentrates on companies with outsized growth prospects. It all starts at the top. The fund's top holdings are the Magnificent Seven stocks:

  • Apple: 10.8% of the fund's holdings.
  • Microsoft: 9.5%
  • Amazon: 5.3%.
  • Nvidia: 4.3%
  • Meta Platforms: 3.8%.
  • Tesla: 3.2%.
  • Alphabet: 3.1% (class A shares) and 3.1% (class C shares)

Overall, those seven companies comprise 43% of the fund's holdings, with the other 93 stocks making up the remaining 57%. That's almost double their weighting in the S&P 500 (and related S&P 500-focused ETFs). Given their outsized weighting in the index, these companies are helping drive higher returns relative to the S&P 500.

The group has outperformed the market this year. According to data from Goldman Sachs, they had gained an average of 71% through mid-November compared to a 6% average gain for the other 493 stocks in the S&P 500 index. If it weren't for the Magnificent Seven's outsized gains and large allocation, the index wouldn't have rallied 19% this year.

Goldman Sachs expects the Magnificent Seven to have another strong year in 2024, predicting they will again outperform the S&P 500. An analyst at the investment bank wrote that "The seven stocks have faster expected sales growth, higher margins, a greater reinvestment ratio, and stronger balance sheets than the other 493 stocks and trade at a relative valuation in line with recent averages after accounting for expected growth." Given the Nasdaq-00's higher weighting to this group, the Invesco QQQ is an excellent way to play their potential continued outperformance.

Concentrated at the top

The Invesco QQQ has been a great ETF investment over the years. It has delivered outsize returns for its investors because it concentrates on owning some of the fastest-growing companies benefiting from tech megatrends. That makes this ETF a great way to passively invest in the Magnificent Seven.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Matthew DiLallo has positions in Alphabet, Amazon, Apple, Meta Platforms, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Goldman Sachs Group, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.


34.

The Average Retirement Savings for American Households Is Just $87,000. These 3 Stocks Could Help You Beat That.

2023-12-12 13:15:00 by Justin Pope, The Motley Fool from Motley Fool

Piggy bank stuffed with cash money savings investing

Saving for retirement is one of the most important goals you'll have in life. Yet it's so distant that it sneaks up on people, sending them into a stressful, late-career panic to make up years of lost ground.

According to research by The Motley Fool, the average retirement savings for American households is just $87,000. That's barely higher than the average American household's annual income -- and it's probably not nearly enough to fund basic living expenses for the rest of your life.

But there is always time to take action to improve your financial future, and investing is an excellent tool for building a nest egg to survive and enjoy your later years. Stick these three stocks in a diversified portfolio and you'll likely retire above the average.

1. Nvidia

You'll need some growth to boost your nest egg, especially if you're catching up. But you can't risk your precious money in speculative penny stocks or other risky ventures that are just as likely to evaporate. Nvidia (NASDAQ: NVDA) could be the answer you're looking for. The company has been one of Wall Street's hottest names this year due to the explosion of artificial intelligence and the resulting need for AI computer chips, which Nvidia dominates with a roughly 80% market share.

Yes, the stock is already up over 200% this year, but hear me out. Artificial intelligence isn't all hat and no cattle. Corporations are pumping massive investments into developing their AI technology, which runs on powerful chips. According to Statista, the global AI opportunity could grow 20-fold by 2030 to $2 trillion. And is growth going to just stop after that? Probably not. Nvidia will likely grow far larger than its current size, making it an excellent stock if you look 10, 20, or even 30 years ahead.

The stock's valuation isn't even that expensive despite its hot 2023. Analysts believe the company's earnings will compound at a 39% growth rate over the long term. Today Nvidia's forward P/E ratio is just under 38. The resulting PEG ratio of just one signal that Nvidia is cheap for the growth you could get in the future. Nvidia could fail to meet expectations, but the company's tremendous momentum in recent operating results implies that the future is bright.

2. Invesco QQQ Trust, Series 1

Picking individual stocks isn't necessary for successful investing. Exchange-traded funds like the Invesco QQQ Trust (NASDAQ: QQQ) can be great tools to easily build diversity into your investment strategy. Large technology companies have dominated Wall Street for years, and that's where the Invesco QQQ focuses.

Its top holdings include Apple, Microsoft, Amazon, Meta Platforms, Nvidia, Alphabet, and Tesla. These companies combine to make up roughly 44% of the total fund. Instead of trying to trade in and out of these big names based on their valuations, you can buy QQQ and let a professional worry about that. Broad exposure to big tech through QQQ has beaten the market for nearly a quarter-century.

QQQ Total Return Price Chart
QQQ Total Return Price data by YCharts

That doesn't guarantee the same results moving forward, but it's hard to see the fund falling on its face as long as big tech stays relevant. Just remember that ETFs like the Invesco QQQ charge fund managers fees, which is called the expense ratio. The QQQ's expense ratio is 0.2%, or $2 for every $1,000 you invest.

3. Vanguard S&P 500 ETF

The most straightforward investment strategy is to hitch your wagon to the broad stock market and ride it higher. The S&P 500 is an index constructed of 500 of America's largest companies, and is traditionally considered the go-to benchmark for stock market performance. There are ETFs like the Vanguard S&P 500 ETF (NYSEMKT: VOO) built to mimic the S&P 500.

Technically, investing in stocks is riskier than simply sitting on your money, but you have to risk money to make money. Inflation will slowly eat away at your savings if you don't invest. Notably, the stock market is safer over the long term than most would think.

^SPX Chart
^SPX data by YCharts

For example, the S&P 500 fell nearly 20% in 2022. This year, it's up almost 20%. It's a zig-zag that can drive anyone mad if you obsess over its volatility. However, zoom out and the chart looks much different. You can see that the stock market has historically gone higher over time because America's economy has steadily grown over decades. Steadily buy Vanguard S&P 500 ETF, and there's a good chance your money will eventually grow. The market averages about 10% annual returns over the long term.

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*Stock Advisor returns as of December 7, 2023

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.


35.

Bitcoin's Pullback: 4 Questions to ask Yourself

2023-12-12 13:00:00 by Andrew Rocco from Zacks

Bitcoin: Know What You Own

On Wall Street, it is imperative that investors understand the “character” of their stock or asset. After a more than 150% gain this year, Bitcoin bulls took some chips off the table over the weekend. The world’s largest cryptocurrency sliced lower by 7.5% within minutes over the weekend before paring some of its losses. For those who track Bitcoin, the violent price action is nothing new. Assets like Bitcoin tend to have a “bucking bronco” nature, with wild swings in both directions. With volatility comes opportunity. How can we, as investors, ride these trends?

·       Is my position size too large? Amateur investors tend to position size far too large.If you are too affected by price swings, try to decrease your position size. Position size allows you to hold through normal fluctuations and helps to calm emotions.

·       What is my average cost on the position? How much room you give an asset on pullbacks should be directly correlated to position size. For example, we have a double-digit gain on our ProShares Bitcoin Strategy ETF (BITO) position in the Technology Innovators Portfolio. If you are playing with “the house’s money” as we are, you can afford to sit through more violent swings. Conversely, if you are underwater in a position, you must allow less slack to the downside.

·       What is my “portfolio heat?” Are you having a profitable year? If you are having a profitable year in your overall portfolio, you can take on more risk. Risk mitigation should take center stage if you are struggling and are down on the year.

·       Is the chart pattern intact? When push comes to shove, most investors try to latch onto a trend and ride it higher. Investors can leverage moving averages to determine whether a trend is intact or broken unbiasedly. Understand that the moving average period will vary depending on one’s timeframe. For example, swing traders like myself tend to utilize the intermediate-term 50-day moving average as a point of reference.

Position Size: Smaller Size Decreases Your Risk of Ruin

Investors should have a fixed amount of capital they are willing to risk on a given trade. For example, I never risk more than 1% of my aum (assets under management) on a given trade. In other words, if the account I manage is $100,000, the most I will lose on one trade is $1,000. By keeping my risk small, I do not have to be overly concerned with the risk of any individual trade and can suffer a string of losses and still live to trade another day.

 

Zacks Investment Research
Image Source: TradingTact.com

Average Cost: Earn the Right to Sit Through Pullbacks

Let’s say investor A bought XYZ stock (trading at $125) at $120, and Investor B bought the same stock at $100. Because investor B enjoys a much larger cushion in XYZ, he can be much more patient with pullbacks. Be patient with winners while ruthlessly cutting losers.

Portfolio Heat: Understand the Big Picture

Because most stocks are correlated in some fashion, you must understand your overall portfolio’s risk. When a portfolio has few winners, a pullback in the market will increase what I call “portfolio heat.” If you have closed several winners and are having a strong year in the market, you can afford to sit through some portfolio heat. On the other hand, if you are breakeven or worse year-to-date, protecting profits is job #1. Remember, if you protect your downside risk, the upside will eventually take care of itself. Never put yourself in a position where you can blow up your account.

Charts: Trend Filters Keep You on the Right Side

A simple 200-day moving average filter overlayed on the Nasdaq 100 ETF (QQQ) has kept investors on the right side of the market over the past five years. Above the 200-day moving average, investors should be net long stocks. Conversely, below the 200-day moving average, investors should decrease market exposure and actively manage downside risk.

Zacks Investment Research
Image Source: TradingView


 

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36.

Annual Changes to the Nasdaq-100 Index®

2023-12-09 01:00:00 by Nasdaq, Inc. from GlobeNewswire

Nasdaq, Inc.

NEW YORK, Dec. 08, 2023 (GLOBE NEWSWIRE) -- Nasdaq (Nasdaq: NDAQ) today announced the results of the annual reconstitution of the Nasdaq-100 Index® (Nasdaq: NDX), which will become effective prior to market open on Monday, December 18, 2023.

The following six companies will be added to the Index: CDW Corporation (Nasdaq: CDW), Coca-Cola Europacific Partners plc (Nasdaq: CCEP), DoorDash, Inc. (Nasdaq: DASH), MongoDB, Inc. (Nasdaq: MDB), Roper Technologies, Inc. (Nasdaq: ROP), and Splunk Inc. (Nasdaq: SPLK).

The Nasdaq-100 Index® is composed of 100 of the largest non-financial companies listed on The Nasdaq Stock Market® and dates to January 1985 when it was launched along with the Nasdaq Financial-100 Index®, which is comprised of 100 of the largest financial stocks on Nasdaq®. These indexes act as benchmarks for financial products such as options, futures, and funds. The Nasdaq-100® is reconstituted each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.

The Nasdaq-100 Index® is the basis of the Invesco QQQ Trust (Nasdaq: QQQ) which aims to provide investment results that, before expenses, correspond with the Nasdaq-100 Index® performance. In addition, options, futures and structured products based on the Nasdaq-100 Index® and the Invesco QQQ Trust trade on various exchanges.

As a result of the reconstitution, the following six companies will be removed from the Index: Align Technology, Inc. (Nasdaq: ALGN), eBay Inc. (Nasdaq: EBAY), Enphase Energy, Inc. (Nasdaq: ENPH), JD.com, Inc. (Nasdaq: JD), Lucid Group, Inc. (Nasdaq: LCID), and Zoom Video Communications, Inc. (Nasdaq: ZM).

Information

For information about the six companies to be added to the Nasdaq-100 Index®, please visit the following respective company websites:

CDW Corporation – https://www.cdw.com/content/cdw/en/about/overview.html

Coca-Cola Europacific Partners plc – https://www.cocacolaep.com/

DoorDash, Inc. – https://www.doordash.com/

MongoDB, Inc. – https://www.mongodb.com/

Roper Technologies, Inc. – https://www.ropertech.com/

Splunk Inc. – https://www.splunk.com/

About Nasdaq Global Indexes
Nasdaq Global Indexes has been creating innovative, market-leading, transparent indexes since 1971. Today, our index offering spans geographies and asset classes and includes diverse families such as the Dividend and Income (includes Dividend Achievers), Nasdaq Dorsey Wright, Fixed Income (includes BulletShares®), Global Equity, Green Economy, Nordic, and Commodity indexes. We continuously offer new opportunities for financial product sponsors across a wide spectrum of investable products and for asset managers to measure risk and performance. Nasdaq also provides exchange listing, custom index, and design solutions to financial organizations worldwide.

About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions, and career opportunities, visit us on LinkedIn, on X @Nasdaq, or at www.nasdaq.com.

The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular financial product or an overall investment strategy. Neither The Nasdaq OMX Group, Inc. nor any of its affiliates makes any recommendation to buy or sell any financial product or any representation about the financial condition of any company or fund. Statements regarding Nasdaq’s proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

- NDAQG -

Media Relations Contacts   Investor Relations Contact
Name: Camille Stafford   Name: Index Client Services
Email: Camille.Stafford@nasdaq.com   Email indexservices@nasdaq.com
     
Name: Jennifer Lawson    
Email: Jennifer.Lawson@nasdaq.com    
     

 




37.

1 Way to Turn $100,000 Into $1 Million by Retirement

2023-12-08 11:00:00 by Katie Brockman, The Motley Fool from Motley Fool

Saving for the future isn't easy, but investing in the stock market can make your goals much more achievable. There are countless options when it comes to building wealth in the stock market, but if you're looking for a low-maintenance investment that can help you make a lot of money with little effort, an exchange-traded fund (ETF) can be a good choice. While everyone's investing preferences will be different, there's one ETF that could help you turn $100,000 into $1 million or more with next to no effort on your part: the Invesco QQQ Trust (NASDAQ: QQQ).


38.

Better Growth Vehicle: Invesco QQQ Trust or Vanguard Information Technology Index Fund?

2023-12-06 13:00:00 by George Budwell, The Motley Fool from Motley Fool

Picking stocks capable of outperforming the broader markets consistently is a tremendously difficult task. A recent study, for example, showed that only 2.39% of stocks are responsible for literally all of the gains of the global equity markets over the past 30 years. This unfavorable dynamic is the core reason why super investors like Warren Buffett, George Soros, and Peter Lynch, who have dramatically outperformed the S&P 500 index over their careers, are revered on Wall Street and Main Street alike.


39.

Why the Invesco QQQ Trust Gained 11% in November

2023-12-06 01:14:00 by Jeremy Bowman, The Motley Fool from Motley Fool

It's rare for an exchange-traded fund (ETF) to move by double digits in a single month, but that's exactly what happened with the Invesco QQQ Trust (NASDAQ: QQQ) in November. Much of the ETF is made up of the "Magnificent Seven" stocks: Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla. For November, the Invesco QQQ Trust finished up 11%, according to data from S&P Global Market Intelligence.


40.

Better ETF to Buy: Vanguard Growth Fund vs. Invesco QQQ Trust

2023-12-03 13:25:00 by Jeremy Bowman, The Motley Fool from Motley Fool

Investing in exchange-traded funds (ETFs) makes sense for almost any investor. Buying ETFs is the easiest way to put together a diversified portfolio of stocks without having to do the hard work of managing them yourself.


41.

Could Investing in the Nasdaq-100 Help You Retire a Millionaire?

2023-11-30 12:15:00 by Keithen Drury, The Motley Fool from Motley Fool

While some may consider index fund investing boring, there is no easier way to put yourself on a path to success than consistently adding to an index fund. In fact, I'd argue that many investors would be better suited to doing this than buying individual stocks they don't have the stomach to hold when the market turns south.


42.

US Treasury yields climb on Fed rate cut predictions

2023-11-21 17:10:02 by Angel Smith from Yahoo Finance Video

US Treasury yields recover on cooling economic data, but concerns around the Fed's ability to deliver a soft landing are still lingering. Yahoo Finance's Jared Blikre analyzes bond market dynamics and investor sentiment on the Fed's future interest rate cuts forecasted for 2024. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.


43.

Is Invesco QQQ Trust a Buy?

2023-11-17 22:03:00 by Reuben Gregg Brewer, The Motley Fool from Motley Fool

Invesco QQQ Trust has been on a tear, up 35% over the past year, but you have to understand why that is happening.


44.

The Options Trader’s Hotlist: 7 Stocks with Compelling Prospects

2023-11-16 21:57:28 by Josh Enomoto from InvestorPlace

Even if you don’t have any intention of trading in the derivatives market, you’ll still want to consider top stocks for options trading. How come? Options provide leverage, typically in the form of 100 shares of the underlying security or asset per every one contract. You can accelerate your profits – and your losses to be sure – over a short time.

Given the “energy density” of the best options trading stocks, institutional investors – the smart money – love the derivatives market. Again, if you have zero intentions of participating, you’ll want to know what the big dogs are doing with their money. In other words, it’s financial intelligence.

Speaking of which, to decipher compelling options traders’ stock picks, I’m indebted to Fintel. Through its stock options flow screener – which exclusively filters for big block trades likely placed by institutions – I’m able to see in real time what transactions the major players are making.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

If you want a sports analogy, the options flow data is the equivalent of sabermetrics. Armed with this data, I can better predict what the next pitch might be. And on that note, below are high-potential stocks for options traders.

SPDR S&P 500 ETF Trust (SPY)

Man standing behind a Wall Street chart with S&P 500 on top of it. SPY stock.Source: Funtap / Shutterstock

I realize that this discussion centers on top stocks for options trading. However, I believe I’d be remiss if I didn’t mention the benchmark exchange-traded fund SPDR S&P 500 ETF Trust (NYSEARCA:SPY). With the SPY representing the tradable version of the S&P 500 index, it’s important to understand what the big dogs might be thinking about it. Interestingly, one trade popped up that caught my attention.

On Wednesday, an entity (or entities – we really don’t know) bought 2,886 contracts of the Feb 16 ’24 400.00 Put. For those unfamiliar with the lexicon, the date refers to the time when the contract expires. And the “400.00” refers to the strike price. Interestingly, this strike is very close to the $410.68 level that the SPY bottomed at on Oct. 27 prior to bouncing higher.

Fundamentally, it’s important to respect this put, which is why I consider it one of the “best options trading stocks.” You’re going to want to know that some of the major traders may be having concerns about the SPY.

Invesco QQQ Trust Series 1 (QQQ)

Nasdaq in focus accompanied by a green arrow and the word Source: Shutterstock

Again, I know that we’re not literally talking about top stocks for options trading. However, given that the technology sector has been the talk of town throughout this year, it’s important to understand institutional trading dynamics associated with the Invesco QQQ Trust Series 1 (NASDAQ:QQQ). In the open market, QQQ gained nearly 46% of market value. It seems the ETF will only march higher.

However, that might not be what some institutional traders believe. Notably, major entities bought 1,804 contracts of the Mar 15 ’24 355.00 Put. Interestingly, on Oct. 26, the QQQ bottomed at $343.66 before soaring higher. Still, does the tech-centric ETF have enough legs remaining to push even higher from where it stands?

Looking at fundamental data, I’m not so sure. Circumstances really haven’t improved much in the prior summer peak regarding inflation and borrowing costs. Indeed, for the latter metric, borrowing costs stand higher than in the summer. And they could rise given the stubbornly elevated inflate rate.

So, I don’t think it’s out of line that QQQ happens to be one of the options traders’ stock picks (or ETF picks, to be more accurate).

Taiwan Semiconductor (TSM)

Taiwan Semiconductor, TSMC (TSM) on phone screen stock image.Source: sdx15 / Shutterstock.com

As one of the most important semiconductor firms in the world, Taiwan Semiconductor (NYSE:TSM) will almost always attract interest. Therefore, it’s not surprising that TSM represents one of the top stocks for options trading. Since the beginning of the year, shares popped up more than 33%. In fairness, it got choppy in the summer due to broader industry headwinds. However, better times may be ahead.

According to a Bloomberg headline, TSMC – as it’s often abbreviated – saw its shares jump after posting a monthly sales gain. This latest bit of encouraging news shows that the chip industry may be in recovery mode. So, it’s not surprising that institutional investors bought significant volume of the Nov 24 ’23 105.00 Call in a bid for a short-term scalp.

In addition, some traders decided to sell puts. Basically, that’s a wager that the underlying security won’t drop below the listed strike price. In exchange, the trader receives a premium for underwriting the risk. For an important enterprise like TSMC, I believe that’s a reasonable bet because if things go sour, you’re buying TSM at a price you’re comfortable with.

Lyft (LYFT)

lyft stockSource: OpturaDesign / Shutterstock.com

When it comes to high-potential stocks for options investors, the likely assumption is to go long the security. But when it comes to derivatives market trading, you can short an enterprise by “going long” its underlying put contracts. That would give you the right (but not the obligation) to sell the underlying security at the listed strike price. Ride-sharing firm Lyft (NASDAQ:LYFT) might provide the negative fireworks.

Right now, a major entity is taking a huge risk by buying 2,182 contracts of the Nov 17 ’23 10.50 Put. That’s quite a gamble (assuming it’s not part of a complex multi-tiered strategy) not only because of the near-expiry wager but also that Lyft beat expectations for its third quarter. Still, the bears might not be wrong about this.

On Tuesday, institutional traders piled into the bought puts; specifically, acquiring 6,583 contracts of the Feb 16 ’24 10.00 Put. Fundamentally, fading revenge travel sentiments – remember, inflation is still elevated against historical norms – may crimp mobility. In turn, that could negatively impact ride-sharing platforms.

So, it might be one of the top stocks for options trading, just not in the northbound direction.

Cameco (CCJ)

CCJ Stock: Hand in long yellow glove holding a chunk of uranium materialSource: shutterstock.com/RHJPhtotoandilustration

While not the most exciting idea among top stocks for options trading, nuclear energy specialist Cameco (NYSE:CCJ) presents a relevant backdrop because of its core business. True, the underlying uranium asset presents controversies due to the terrible consequences if circumstances go awry. However, outside of extraordinary events, nuclear energy is clean and safe. As well, nothing quite commands the energy density of nuclear fuel.

Therefore, it’s not surprising that options traders are generally  bullish on CCJ. Specifically, on Wednesday, major traders sold (wrote) 995 contracts of the Mar 15 ’24 26.00 Put. Given the lowly strike price – CCJ closed that day at $43.17 – it’s doubtful that shares will drop to that point. Therefore, whatever premium collected on the trade should be relatively safe.

Indeed, I’d go so far as to say that you can write puts at a higher strike price – let’s say even up to $35 – and still do well. This is one of the best options trading stocks because the relevancy of the idea makes selling puts palatable.

Notably, analysts rate CCJ a unanimous strong buy with a $50.30 price target, implying almost 17% upside.

Citigroup (C)

The logo for Citigroup (C) can be seen on the side of an office building for the company.Source: Willy Barton / Shutterstock.com

As a major financial institution, it may be difficult to be bearish against Citigroup (NYSE:C) for an extended period. At least, that’s the lesson pessimists are discovering about the enterprise. True, C stock is down about 2% for the year. However, in the trailing five sessions, Citi shares popped up almost 7%. Does that make it one of the top stocks for options trading?

Per Fintel, the answer may be “yes” but perhaps not for the reason you’re thinking. One of the biggest trades in terms of the premium engaged – we’re talking 11.96 standard deviations above the median – stems from Citi shares. Specifically, major entities sold 10,118 contracts of the Jan 19 ’24 42.50 Call. Subsequently, they collected $1.85 million in premium.

That’s a huge bet because as of the moment – with shares closing at $44.88 on Wednesday – the call option is in the money (ITM) for buyers. So, the call seller must have confidence that shares will fall. Given the troubles the company incurred along with aforementioned broader economic challenges, a bearish wager might not be out of the question.

JD.com (JD)

JD.com (JD) logo displayed at the entrance to the company's Silicon Valley office.Source: Sundry Photography / Shutterstock.com

Since the start of the year, shares of JD.com (NASDAQ:JD) – a powerhouse in China’s e-commerce ecosystem – stumbled badly. We’re talking about a half-off haircut in market value. Yes, that might be a screaming deal for top stocks for options trading. However, sometimes a deal is too good to be true. Could that be the case for JD stock?

Surely, anything is possible so I don’t want to discount the risk involved. Nevertheless, I also couldn’t help but notice that major entities bought a significant amount of JD call options, both with near term and longer-term expiration dates. In fairness, other traders are either betting against shares with sold calls or the same traders are mitigating their risk.

With China’s economic dynamics questionable to say the least, the apprehension is understandable. Still, JD popped up 9% in the trailing five sessions. Fundamentally, the e-commerce stalwart posted earnings and revenue that exceeded analysts’ expectations. So, the optimism aligns with a reasonable thesis.

Finally, analysts rate JD a moderate buy with a $44.34 average price target, projecting 55% growth.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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45.

Investor Michael Burry of 'Big Short' fame has closed bets against S&P 500, Nasdaq

2023-11-14 20:33:06 by David Hollerith from Yahoo Finance

Michael Burry, who famously shorted subprime mortgages during the 2008 financial crisis, closed his bets against the S&P 500 and the Nasdaq 100 in the third quarter.

But he also found another industry to short: semiconductors.

NEW YORK, NY - NOVEMBER 23:  Michael Burry attends the
Michael Burry attends the New York premiere of "The Big Short." (Jim Spellman/WireImage)
Jim Spellman via Getty Images

Burry's hedge fund Scion Capital disclosed Tuesday in a federal filing with the SEC that it had closed out "put" positions on the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 index, as of the end of September. 

Those bearish bets amounted to more than $1.6 billion as of the last trading day of the second quarter. The indexes fell 3.6% and 3%, respectively, during the third quarter.

Burry gained fame for his moves during the 2008 crisis, a severe downturn that began with a US housing bust. Burry predicted a collapse in residential real estate prices as early as 2007 and then shorted a number of subprime deals through the use of credit default swaps.

He became a central figure in Michael Lewis’s 2010 book "The Big Short," and Christian Bale later portrayed Burry in a 2015 film adaptation of the Lewis book.

Scion Capital broadly shrank its exposure to the stock market in the third quarter, according to its new SEC filing, selling 76% of the stocks it disclosed at the end of the second quarter.

But Scion reopened positions in JD.com and China-tech giant Alibaba (BABA) after selling out of the companies in the second quarter. 

The hedge fund also eliminated its remaining exposure to regional lender New York Community Bank (NYCB). In the first quarter, Scion spent more than $23 million betting on financial stocks during a chaotic period marked by several prominent bank failures. 

Burry, however, isn't finished shorting stocks. 

Scion opened two new positions, one shorting 100,000 shares of BlackRock's semiconductor ETF, the iShares Semiconductor ETF (SOXX), and another 2,500 shares betting against online travel website Booking Holdings Inc. (BKNG).

The firm also purchased 1,500 shares of Booking Holdings Inc. outright.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance


46.

3 Great ETFs to Buy Now for Q4 Momentum

2023-11-14 19:14:01 by Marc Guberti from InvestorPlace

ETFs allow investors to diversify their capital across many stocks without much effort. Instead of carefully constructing a portfolio and staying on top of many positions, fund managers do all the work with most top ETFs to buy.

While you will have to pay ETF fees, some expense ratios are very low. It’s possible to find ETFs with annual expense ratios below 0.50% due to how they get managed.

However, a low expense ratio isn’t enough. Investors also want returns that mirror or beat the market’s performance. Investors looking for some Q4 momentum may wish to consider these ETFs.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

VanEck Semiconductor ETF (SMH)

VanEck Morningstar SMID Picks

The VanEck Semiconductor ETF (NASDAQ:SMH) is a top-performing fund that tracks semiconductor stocks. The fund has gained 56% year-to-date due to the rising importance of artificial intelligence. SMH is up an impressive 233% over the past five years, comfortably surpassing the market indices.

Even more impressive is that the VanEck Semiconductor ETF has generated an annualized return of 22.61% over the past 10 years. The fund has a 0.25% expense ratio and over $10 billion in total assets under management. SMH has been around since Dec. 20, 2011. Shares offer a 30-day SEC yield of 0.76%. 

The fund’s top three holdings are Nvidia (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing (NYSE:TSM) and Broadcom (NASDAQ:AVGO). Each position comprises roughly 20%, 13%, and 7% of the fund’s positions.

Semiconductors are important components for many devices, gadgets and resources. Artificial intelligence (AI) will only increase the demand for these resources, but these were all bullish investment opportunities before AI came into the picture.

Invesco QQQ Trust Series 1 (QQQ)

Invesco logo in blue with mountain imageSource: Shutterstock

The Invesco QQQ Trust Series 1 (NASDAQ:QQQ) fund mirrors the Nasdaq 100. When tech stocks soar, QQQ goes up, too. The fund has gained 43% year-to-date and is up 125% over the past five years.

QQQ is one of the most popular funds in the financial market. That means plenty of liquidity and very few issues with bid-ask spreads. Invesco also has 3x leveraged ETFs that follow QQQ. These funds include ProShares UltraPro Short (SQQQ) and ProShares UltraPro QQQ (TQQQ). The leveraged funds are riskier.

QQQ has been around since 1999 and focuses on big tech. The fund has a 0.20% expense ratio and invests in 100 companies. QQQ has $210 billion in assets under management.

The fund’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Apple and Microsoft comprise over 10% of the fund’s total assets. Amazon stock is third, with 5.68% of the fund’s total assets.

ARK Innovation ETF (ARKK)

The website for the Ark Invest Disruption Innovation ETF ARKK.Source: Spyro the Dragon / Shutterstock.com

The ARK Innovation ETF (NYSEARCA:ARKK) focuses on innovative companies, but what does that mean for investors? While the fund looked unstoppable from 2017 to 2021, shares shed over 80% of their value from peak to trough.

With this context, investors became more skeptical of the fund. The ARK Innovation ETF primarily invests in companies that exhibit high revenue growth. It’s normal for the fund to make riskier investments that feature companies burning through cash.

The idea behind these growth investments is that companies will eventually turn profits and reward long-term investors. It took Amazon almost a decade to generate a profit. The company continued to reinvest any profits, which resulted in net losses for many years. 

Some investors remain patient during those stretches. The ARK Innovation ETF attracts those types of investors. 

The fund has a 0.75% expense ratio and has been around since 2014. ARKK’s top three holdings are Coinbase (NASDAQ:COIN), Roku (NASDAQ:ROKU) and Tesla (NASDAQ:TSLA). These three stocks comprise 27% of the fund’s total assets.

On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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47.

Jim Chanos Adjusts Portfolio, Cuts Stake in SPDR S&P Regional Banking ETF

2023-11-14 18:03:06 by GuruFocus Research from GuruFocus.com

Insights into the Renowned Short Seller's Latest 13F Filings

Renowned for his short-selling acumen, Jim Chanos (Trades, Portfolio) has made a name for himself on Wall Street by identifying and capitalizing on overvalued securities. His latest 13F filing for the third quarter of 2023 offers a glimpse into his long positions, revealing strategic moves in a diverse portfolio. Chanos, who founded Kynikos Associates in 1985, is known for his meticulous research and his ability to spot fundamental discrepancies in market valuations. His investment philosophy is rooted in the belief that while stocks have unlimited potential to rise, they can also plummet to zeroa scenario he has witnessed more often than the former.

Jim Chanos Adjusts Portfolio, Cuts Stake in SPDR S&P Regional Banking ETF

New Additions to the Portfolio

During the third quarter, Jim Chanos (Trades, Portfolio) expanded his portfolio with a new position:

  • His most notable new buy was INVESCO QQQ Trust (NASDAQ:QQQ), acquiring 2,134 shares. This addition represents 0.24% of the portfolio, with a total value of $764,550.

Exiting Positions

Chanos also decided to exit several holdings completely:

  • He sold all 61,774 shares of Enviva Inc (NYSE:EVA), impacting the portfolio by -0.13%.
  • All 15,000 shares of UTA Acquisition Corp (NASDAQ:UTAA) were liquidated, resulting in a -0.03% portfolio impact.

Significant Reductions

Notably, Chanos reduced his stake in certain stocks:

  • The most significant reduction was in SPDR S&P Regional Banking ETF (KRE), where he cut his position by 50,719 shares. This resulted in a -50.46% decrease in shares and a -0.39% impact on the portfolio. KRE traded at an average price of $44.59 during the quarter and has seen a -4.80% return over the past three months and a -24.06% year-to-date performance.

Portfolio Overview

As of the third quarter of 2023, Jim Chanos (Trades, Portfolio)'s portfolio comprised 32 stocks. The top holdings were 0.65% in SPDR S&P Regional Banking ETF (KRE), 0.24% in INVESCO QQQ Trust (NASDAQ:QQQ), 0.09% in iShares Short Treasury Bond ETF (NASDAQ:SHV), 0.09% in SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), and 0.05% in Inflection Point Acquisition Corp II (NASDAQ:IPXXU). The investments are predominantly concentrated in the Financial Services sector, which is the sole industry among the 11 represented in his portfolio.

Jim Chanos Adjusts Portfolio, Cuts Stake in SPDR S&P Regional Banking ETF

Jim Chanos Adjusts Portfolio, Cuts Stake in SPDR S&P Regional Banking ETF

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.


48.

Stock market news today: Stocks slide, snapping longest win streak since 2021, as yields jump

2023-11-09 21:09:30 by Josh Schafer from Yahoo Finance

Wall Street stocks slid on Thursday as bond yields rallied following a disappointing Treasury auction for investors and Fed Chair Jerome Powell's hawkish-toned speech on inflation.

The S&P 500 (^GSPC) fell 0.8% after the benchmark narrowly notched its eighth straight day of gains on Wednesday — the index's longest in two years. The Dow Jones Industrial Average (^DJI) fell about 0.6% and the Nasdaq Composite (^IXIC) also slipped near 0.9%.

Yields spiked after the 1 p.m. ET auction. The 10-year Treasury yield (^TNX) spiked to 4.62%, about 10 basis points. Meanwhile, the 30-year Treasury yield (^TYX) spiked to 4.8%, about 15 basis points.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

A fresh clutch of corporate reports lies ahead as earnings season winds down. Disney (DIS) shares rose after its after-hours quarterly earnings beat estimates, though they were also likely boosted by a tentative deal between Hollywood studios and striking actors. Other media stocks rallied after the news.

Meanwhile, shares in Arm (ARM) slid as investors digested its first post-IPO results, as well as the $6.2 billion quarterly loss posted by the chip designer's backer SoftBank.

In commodities, oil clawed back some losses after plunging to a three-month low on concerns about global consumption. West Texas Intermediate crude futures (CL=F) and Brent crude futures (BZ=F) added about 0.3% to trade at around $75 and almost $80 a barrel, respectively.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance


49.

Invesco QQQ Trust Is Great. Here's Why You Shouldn't Buy It.

2023-11-09 10:05:00 by Reuben Gregg Brewer, The Motley Fool from Motley Fool

This is basically Invesco QQQ's goal -- track the Nasdaq-100 index, which is simply the 100 largest stocks on the Nasdaq stock exchange. As for the fees, Invesco QQQ's expense ratio is 0.2%. Put simply, if you are looking to track the Nasdaq-100, this is a good way to do so.


50.

Stock market news today: Nasdaq, S&P 500 extend longest win streaks since 2021

2023-11-08 21:05:47 by Josh Schafer from Yahoo Finance

The S&P 500 and Nasdaq eked out gains Wednesday, narrowly continuing Wall Street's red-hot run of gains, as investors digested a fresh batch of corporate earnings amid a quiet week on the economic calendar.

The S&P 500 (^GSPC) closed up 0.1%, extending its winning streak to eight days, the longest for the benchmark index since 2021. The Nasdaq Composite (^IXIC) also rose around 0.1%, continuing its own streak for the ninth straight session. The Dow Jones Industrial Average (^DJI) came in around 0.1% lower. 

Words of caution from several hawkish members of the Fed have put a check on optimism that interest rates have peaked, sapping momentum from the rally in stocks. But 90% of traders are sticking with their bet there won't be a hike this year, and 25% expect a rate cut in March, according to the CME FedWatch tool.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Oil prices — a key input into inflation levels — slipped on Wednesday, after sinking to their lowest levels in three months the previous day as concerns grew about demand from China and the US. West Texas Intermediate crude futures (CL=F) and Brent crude futures (BZ=F) were both over 2% lower.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance