How to allocate VOO and QQQ? 3 aspects help me easily to decide it

If you have decided to invest in VOO and QQQ, then you may be wondering “how should I allocate my funds in them?”

You may have seen many discussions and advice on this, and felt more and more confused.

Here, I will share 3 aspects on how you can decide the allocation amount, and how do I use these steps to allocate my funds.

Do you prefer in tech. companies (QQQ), or in different industries (VOO)?

The first aspect is to decide your preference on industrials.

If you want to earn fast in a short time, then you can allocate more on QQQ, or even put all of your money on it.

In fact, the tech companies had driven not only the market, but also the whole economy in these 2 decades, so many investors believed that investing in tech. companies would give them huge profit, and so as today.

In contrast, if you feel unsure to invest all in one industry, you can choose to invest more in VOO, which has more industries involved and lower risk.

VOO also contains the market drivers, like Microsoft, Apple and Nvidia, compared with QQQ, they have lower weights and lower effect when they are facing trouble.

Do you feel comfortable with this allocation?

The second aspect is your tolerance about the allocation, that is, your feeling about it.

If you’re comfortable with higher levels of volatility, allocating more to QQQ might be suitable to capitalize on the growth potential of technology stocks.

However, if you prefer a more conservative approach, a larger allocation to VOO may align better with your risk tolerance and goals. 

It’s essential to understand your comfort level with risk, whether you can eat and sleep well or not,  and ensure that your investment allocation reflects your objectives.

What’s your investment goal and strategy?

The last one is, what’s your goal and strategy?

If you would like to earn more in the long-run, or eye on high returns for short-run purposes, then adding more QQQ in your portfolio is adequate, if you can accept the high volatility as just mentioned.

Conversely, you can put VOO more if you want a more-steady return without any high fluctuation, no matter for a short or long time.

Of course, you can adjust the proportion per your need dynamically, to react to the market environment.

How do I allocate my funds?

Now, back to the topic, how do I allocate funds via these 3 ways?

First, as of my preference, I choose more allocation in different industries, even if I like the tech companies, so VOO is the main theme in my portfolio.

Second, to make me feel more comfortable to hold it for a long time, I allocate more VOO in my portfolio, and less QQQ.

Finally, for the long term goal and strategy, I want to earn steadily for a long time, instead of in high fluctuation, it makes me feel nervous, so again, I invest more in VOO.

In conclusion, I choose to invest VOO more with the preference and comfort steadily, and it makes it easy to hold it long, so I allocate VOO with at least 80%, and no more than 20% on QQQ for my long term combination.

If you still have no idea how to allocate it, you can try to use it the same way as me.

Leave a Reply

Your email address will not be published. Required fields are marked *