Nasdaq 100 Index ETF and How to Invest for Profit

hello full Compounders welcome back to the channel today we're diving into one of my favorite investment opportunities out there the NASDAQ 100 index if you've ever wondered about investing in The Magnificent Seven companies that is Apple Amazon alphabet meta platforms Microsoft Nvidia and Tesla you're in the right place the NASDAQ 100 brings together 100 of the largest and most Innovative non-financial companies listed on the NASDAQ Stock Exchange why should you consider investing in the NASDAQ 100 and how can you get started started let's break it down together this video is for educational purposes only and should not be considered Financial advice I am not your financial adviser and you're responsible for your own financial decisions why invest in the NASDAQ 100 the NASDAQ 100 index isn't just any index it's a vibrant collection of technology and Innovation driven companies that have reshaped our world here are six reasons to consider the NASDAQ 100 for your Investment Portfolio number one robust growth the NASDAQ 100 is synonymous with growth driven by its heavy waiting towards technology and Innovation sectors companies in the index are often at the Forefront of Cutting Edge advancements from cloud computing to artificial intelligence fueling above average growth rates if you have invested $11,000 in NASDAQ 100 10 years ago in 2014 you would now have $5,440 versus $3,290 if you had invested in the S&P 500 while past performance does not guarantee future results the indexes track record reflects the robust growth and resilience of its constituents companies reason number two the magnific ific 7 you get to invest in the Magnificent 7 cohort which are Apple Amazon alphabet meta platforms Microsoft envidia and Tesla this cohort of Technology leaders represents around 40% of the value of the NASDAQ 100 I did a video about them you can check it out right here number three diversification while the index is Tech heavy it also includes companies from various sectors like retail biotechnology and more helping to spread the risk investing in a NASDAQ 100 can diversify your portfolio away from traditional Industries and towards future focused sectors for example in addition to the Magnificent 7 the NASDAQ 100 includes businesses like Costco PepsiCo T-Mobile in amen Honeywell and Starbucks reason number four Global exposure investing in the NASDAQ 100 means investing in companies with a global footprint many of the index's constituents derive significant revenue from outside of the United States offering exposure to the global economic growth reason number five Innovation and Leadership the indexes companies are not just participants in their Industries they are often the leaders driving Innovation and setting the standards investing in the NASDAQ 100 means investing in companies that are shaping our future and reason number six they're easily accessible through ETFs with ETFs like QQQ and QQQ M investing in the NASDAQ 100 has never been more accessible these funds allow investors to buy into all the 100 companies at once with a single share making it easy and affordable to gain exposure to some of the most dynamic companies in the market how to invest in the NASDAQ 100 one option is to buy each of the 100 stocks in the index this solution is very comfortone for most people however investing in the NASDAQ 100 is easier than you might think thanks to exchange traded funds or ETFs an ETF is like a basket of shares that trade under a single ticker symbol on the stock exchange you buy and sell an ETF the same way that you would buy or sell a stock ETFs that hold the NASDAQ 100 stocks allow you to buy shares that represent a portion of the NASDAQ 100 making it possible to invest in many companies at once without having to buy individual stocks here's a step-by-step guide to getting started number one choose a brokerage open an account with an online broker that offers ETFs look for platforms with low fees and good educational resources let me suggest momo.com which offers no commissions on ETF trades when you use the link in the description below to open an account with Mumu you would be helping the channel as they would pay us a referral fee number two research QQQ and QQQ M these are the two popular ETFs that track the NASDAQ 100 they offer similar exposure to the index but come with different expense ratios and investment focuses we'll dive deeper into the differences between the two shortly number three decide on your investment approach consider how much you're willing to invest and whether you want to make a one-time investment or invest regularly over time I suggest using dollar cost averaging dollar cost averaging is a strategy where you invest a fixed amount of money at regular intervals regardless the share price this approach helps you mitigate the impact of Market volatility over time number four buy shares once you've decided on the ETF and investment strategy use your broker's account to buy shares you can usually do this online through the broker's website or the mobile app number five Monitor and adjust keep an eye on your investment and the performance of the NASDAQ 100 as you become more comfortable with investing you might choose to adjust the strategy and or explore other investment opportunities now let's review the ETFs when it comes to investing in the NASDAQ 100 there are two ETF options triple Q QQQ and QQ qm both are offered by the same insurer by besco and both track the NASDAQ 100 index but they cater to different investors triple Q or QQQ also is known as the Invesco QQQ trust it's one of the oldest and most popular ETFs tracking the NASDAQ 100 it's known for its liquidity meaning that it's easy to buy and sell their shes quickly this makes QQQ a favorite among active Traders and institutional investors however its popularity and liquidity come at a cost specifically a slightly higher expense ratio its expense ratio is 0.20% or 20 basis points on the other hand qqm or the Invesco NASDAQ 100 ETF is a newer offering designed with long-term investors in mind it has a lower expense ratio than QQQ the expense ratio of QQQ qqm is 0.15% or 15 basis point versus the 20 basis point charged by QQQ this can make a significant difference in your portfolio's growth especially if you're Investing For the Long Haul QQQ might not have the same level of trading volume as QQQ but for investors focused on buying and holding this is less of a concern both QQQ and qqm have almost identical returns this is expected since they track the same index as of March 25th 2024 the 10e annual return for QQQ is 18.47% the 5-year annual return is 20.9 2% the three-year annual return is 12.61% and the one-year annual return is 46.79 the QQ qm has a slightly better return but it only has 3 years of operation so the three-year annual return is 12.67% about six basis points better than QQQ and the one-year annual return is 46.947500 so which one should you choose if you're a beginner or someone looking to invest for the long term without frequent trading QQQ M's lower expense ratio offers a better value on the other hand if you're an active Trader looking for liquidity and you're okay with a slightly higher cost for the ability to move in and out quickly QQQ might be the way to go most likely if you're a subscriber of our Channel you are an investor and not a Trader so QQQ m is the preferred ETF that's the one that I use now investing in an SQ 100 through ETFs like QQQ and qqm offers a fantastic opportunity to participate in the growth of some of the world's most Innovative and successful companies including the Magnificent 7 whether you're drawn to the liquidity and popularity of QQQ or the lower expense ratio and long-term focus of qqm both ETFs provide a gateway to the technological advances driving the modern economy for beginner investors starting with qqm and employing a dollar cost averaging strategy can be an excellent way to build your investment per this approach not only makes investing more accessible but also teaches the importance of consistency and patience in achieving Financial growth remember every Investor's journey is unique and what works for one person may not work for another it's essential that you consider your financial situation goals and risk tolerance when making investment decisions and remember to always be compounding see you in the next video take care

Channel: Always Be Compounding Club

Views: 830

Keywords: how to invest, investing, stock market, stock market for beginners, how to invest money, how to build wealth, how to invest in the stock market, passive income, financial freedom, investing in stocks, investing for beginners guide, personal finance, income generation, investment plan, investing savings, stock portfolio, magnificent 7 stocks, S&P500, nasdaq, nasdaq100, nasdaq investing, nasdaq stocks, QQQ, QQQM ETfs, etf

Id: RgifQmgAuC4

Length: 8min 21sec (501 seconds)

Published: Thu Apr 11 2024