Tech stocks have recently sold off, presenting investors with a good opportunity to buy tech-heavy ETFs. The Invesco QQQ ETF has a strong track record and gives investors exposure to top AI-related stocks.
The Invesco QQQ Trust's largest components - Apple, Microsoft, and NVIDIA - trade at such extreme multiples that it's hard to picture them rising in the near term. Invesco itself estimates that the fund's holdings have a 38.88 average P/E ratio. It's extremely uncommon for indexes to hold multiples that steep for long periods of time.
Patience is a virtue in a variety of pursuits, including investing. However, human nature is such that we often want benefits or rewards immediately.
While the S&P 500 has more than tripled investor capital in the past decade, it comes up well short of this booming ETF. Exposure to powerful tech-driven secular trends is key to this ETF's rise.
The Invesco QQQ (QQQ) was launched on 03/10/1999, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
On Tuesday, Tradr ETFs hit the ground running by launching an expansive series of new leveraged ETF products. Traditionally, most leveraged ETF products reset on a daily basis.
QQQ's strong fundamentals and higher margins justify a "Hold" rating, while SPY's rate sensitivity and growth outlook support a "Buy" rating. Election and upcoming Fed meeting are catalysts; SPY and QQQ trade at high valuations with accelerating growth forecasts. A robust labor market supports consumer spending; SPY is likely to benefit more from rate cuts, while regulatory risks affect SPY more than QQQ.
The ProShares UltraPro QQQ ETF has delivered jaw-dropping performance for long-term investors. With small caps looking rather cheap, it could be tempting to use a leveraged small cap ETF to capitalize.
Despite interest rates remaining high and signs that the labor market is cooling — among other macroeconomic headwinds — it appears the U.S. economy will skirt a recession and the consumer will remain mostly confident.
The late July/early August slump endured by major equity benchmarks now feels like a distant memory. However, the good news for investors who didn't immediately buy the dip is that gauges such as the Nasdaq-100 Index (NDX) still have some work to do to reclaim their previously notched 52-week highs.
Following late July/early August slumps, some technology-heavy indexes are rebounding. For example, the Nasdaq-100 Index (NDX) gained 5.47%.
QQQ's risk premium relative to risk-free rates has subsided noticeably in the past month. Recent macroeconomic data suggest better odds for a soft-landing scenario. A soft landing would benefit other funds beside QQQ, of course.