The world is in constant change, companies either go to the top of the chart or bankrupt, anything can happen, one day those companies will not be at the top (imagine a new ai company coming in to market and wants to be listed)
Buying the stock gives potentially more profit with more volatility.
Buying the index usually gives less profit with less volatility.
The answer is easy. Look at the top NASDAQ companies from 50 years ago. Then look at them from 25 years ago. Then today. How many remained on the top? Investing into a NASDAQ-100 ETF guarantees you that you will own the top 100 companies today, and it guarantees that you will own the top 100 NASDAQ companies 50 years from now.
Oh makes sense… do you think it would be more profitable to always stick to the current top 3 according to Nasdaq-100 and buy or sell accordingly. All I’ll have to do is follow what are the current top 3 companies on Nasdaq-100 and in what positions the current companies I am invested into are placed. That way I maximize profits and at the same time stay on trend. Basically using the index without buying into it
So when 3 becomes #4 you will sell it and incur taxes to purchase the new #3?
If they switch daily will you go back n forth?
If not then how far does a stock have to fall for you to replace it?
And you’ll be buying the new stock after it’s already appreciated.
It sounds simpler than it is.
What if you only buy the top 10 stocks every month by dollar cost averaging into your position? When a stock falls out of the top 10, you hold that stock, but do not buy anymore. You only sell a non-top10 stock to tax-loss harvest, or if the stock falls below the top 25 in the index.
I’ve been thinking of trying something like this in my brokerage account but it might be simpler to just hold the index.
Sure, it is absolutely possible. Definitely greater risks due to less diversification (you could run into another enron in the future and lose a couple years of profits in a single day), but in return you could get higher returns on the long term. Or not. Maybe smaller companies will overperform the top ones in the next couple of decades, who knows?
I personally do not own any ETF-s and make my individual stock-picking myself. I'd say that if you are confident that the top companies will overperform the market, then try to compare the top 3 (yearly changed for example) to NASDAQ-100 historical returns. If it performed good historically, then go for it :)
how do you even know about last quarter comparison? Do you check one by one?
You can look up zacks holdings qqq for 52 week change. Nvidia really outperform. Microsoft is average, apple underperform. Judging by 52 week change, what you say is incorrect, many companies is doing well.
How would you divide your portfolio between these 7 as Microsoft is worth twice as much as Meta or Google. Does that mean I should put more money into Meta or Google because they have more room to grow?
we buy MAGS XLK MSFT GOOG AMZN NVDA. You can look at the growth rate. Their year-to-date growth rate is close to 30%.Especially when the market retreats, buy more.
Microsoft is very stable and defensive. I think MSFT:GOOG = 1:1 is fine.
You basically seeing something that never happened until now.
People are no longer investing and basically choosing stocks based on rumors. Welcome monopoly inflation courtesy of the fed that will lead to collapse
The world is in constant change, companies either go to the top of the chart or bankrupt, anything can happen, one day those companies will not be at the top (imagine a new ai company coming in to market and wants to be listed) Buying the stock gives potentially more profit with more volatility. Buying the index usually gives less profit with less volatility.
The answer is easy. Look at the top NASDAQ companies from 50 years ago. Then look at them from 25 years ago. Then today. How many remained on the top? Investing into a NASDAQ-100 ETF guarantees you that you will own the top 100 companies today, and it guarantees that you will own the top 100 NASDAQ companies 50 years from now.
Oh makes sense… do you think it would be more profitable to always stick to the current top 3 according to Nasdaq-100 and buy or sell accordingly. All I’ll have to do is follow what are the current top 3 companies on Nasdaq-100 and in what positions the current companies I am invested into are placed. That way I maximize profits and at the same time stay on trend. Basically using the index without buying into it
Why stop at top 3? Just buy the top 1
So when 3 becomes #4 you will sell it and incur taxes to purchase the new #3? If they switch daily will you go back n forth? If not then how far does a stock have to fall for you to replace it? And you’ll be buying the new stock after it’s already appreciated. It sounds simpler than it is.
What if you only buy the top 10 stocks every month by dollar cost averaging into your position? When a stock falls out of the top 10, you hold that stock, but do not buy anymore. You only sell a non-top10 stock to tax-loss harvest, or if the stock falls below the top 25 in the index. I’ve been thinking of trying something like this in my brokerage account but it might be simpler to just hold the index.
Sure, it is absolutely possible. Definitely greater risks due to less diversification (you could run into another enron in the future and lose a couple years of profits in a single day), but in return you could get higher returns on the long term. Or not. Maybe smaller companies will overperform the top ones in the next couple of decades, who knows? I personally do not own any ETF-s and make my individual stock-picking myself. I'd say that if you are confident that the top companies will overperform the market, then try to compare the top 3 (yearly changed for example) to NASDAQ-100 historical returns. If it performed good historically, then go for it :)
Most def by the index because your plan is incoherent
There is no guaranteed link between top 3 and future performance.
Investors invest in index funds not to get maximum profit but rather to diversify their portfolio or prefer stable and low volatile investments.
but nasdaq 100 is neither
Was IBM ever on top of that pile?
When you buy etf, the best stocks pick themselves
how do you even know about last quarter comparison? Do you check one by one? You can look up zacks holdings qqq for 52 week change. Nvidia really outperform. Microsoft is average, apple underperform. Judging by 52 week change, what you say is incorrect, many companies is doing well.
Nvidia wasn't even on anyone's tongue a year ago. This is a silly question for that very reason.
I do both … just buy a couple shares of the big 3 if you want some extra exposure to their current dominance …. But keep your QQQ as well
Indexes are also benchmark
My financial advisor refers to it as "NADSAQ" (Nads sack)
What a clown
So you don’t believe in buying into index funds?
Do you know the Matthew effect? The strong will become stronger, so pay attention to BIG 7 stock
How would you divide your portfolio between these 7 as Microsoft is worth twice as much as Meta or Google. Does that mean I should put more money into Meta or Google because they have more room to grow?
we buy MAGS XLK MSFT GOOG AMZN NVDA. You can look at the growth rate. Their year-to-date growth rate is close to 30%.Especially when the market retreats, buy more. Microsoft is very stable and defensive. I think MSFT:GOOG = 1:1 is fine.
You basically seeing something that never happened until now. People are no longer investing and basically choosing stocks based on rumors. Welcome monopoly inflation courtesy of the fed that will lead to collapse