Some one may ask “If VOO can be held over 10 years, how about QQQ?”.
After all, QQQ has more focus on Technology companies than VOO, sometimes it’s called “the representative ETF of technology”, and some people may have concerns about this.
So today, I will use my experience to share with you whether it’s worth holding QQQ for more than 10 years, just like VOO.
Is QQQ worthy to hold over 10 years?
I can say, it’s worthy to do so, and should do it right now!
Actually, QQQ is also a kind of index ETF, and tracks the Nasdaq 100 index, which selects top 100 market value companies into its composition, without Finance company.
So, if its operation is just like VOO, it is also worth it to hold it a long time, making more money in the long run.
Benefits of Long-Term Holding QQQ
So what are the benefits if we keep investing QQQ long? Here are advantage you can enjoy:
Earn more than market average
First, you can earn more than market average return, that is, VOO.
If we quote Yahoo!Finance latest data, as of July 12, 2024, no matter in short or long term, QQQ all performs better than VOO:
Take the 10-year return as example, QQQ outperforms VOO by nearly 6% each year, that means, if we keep QQQ in 10 years, we can earn 140% more than VOO.
With this big advantage, it’s reasonable enough for you to keep it long.
Benefit from latest technology trend
Next, you can benefit from the latest trend of technology.
In the past 20 years, the market was driven by the tech. giants, like Apple, Microsoft, Google, Amazon, etc..
All of these companies have one thing in common, that is their own unique technique.
For example, Apple’s Iphone, Microsoft’s operating system and cloud service, Google’s search engine, and Amazon’s shopping flow.
With their own technique, they can gain most market share when their products become popular, and earn the most benefit behind.
Moreover, they aren’t satisfied with this, they still keep researching to find out new techniques, to explore more long term growth.
That’s how the market has grown in the last 20 years. New technique drives everything.
Now, the same story is happening in AI areas.
With the common utilization of AI, it boosts productivity for all industries, making all resources work more efficiently, hence increasing the total benefit of the market.
Starting from Nvidia, followed by AMD, Microsoft, Apple, Amazon, and most importantly, TSMC, the leading chip maker that provides the source of all of these.
If you invest in QQQ, you can join such a wave for a very long time, and gain more from this.
Enjoy the potential profit behind
Last, you can earn more potential profit from it.
As mentioned in the last paragraph, with the utilization of new technology, the productivity of the whole society can be increased, efficiently using every kind of resources, lowering cost, and making more money.
When corporates’ profit rises, the more money can flow into investment, no matter in physical production, or stock market, the whole profit also lifts.
Now, AI boosts everything, and the potential behind it is more than we think. Some research says its scale will go up to $826.73 billion in 2030 .
Investing in QQQ, can bring you such tremendous profit, if you’re optimistic about it.
Potential Risks to notice
Even we can enjoy so much from holding QQQ long, however, there are some risks we need to pay attention to:
Its higher volatility than market
First, QQQ has higher volatility than VOO, that is, the market average.
If we look at the figure from Portfolio’s lab, the volatility of QQQ is clearly higher than VOO:
That means, QQQ’s price fluctuation is bigger than VOO. Assume VOO rises 1%, QQQ rises 1.7% at the same time. Conversely, when VOO drops 1%, QQQ drops 1.7% simultaneously.
With such big fluctuations, you need to be well-prepared in your mind, so you won’t be lost when the market is in turmoil.
Potential greater loss
Next, you need to also consider the potential loss of QQQ, especially when the market is crashed.
Again, we quote Portfolio Lab’s data.
Here’s the statics of the drawdown from high points in the last 10 years:
The biggest one was in 2022, when the FED continuously raised internet rates up to above 5% in one year, causing the market to lose over 20%, and QQQ lost more than 30%.
But, if we extend the timeline, the biggest loss since QQQ’s inception, 82%, was in early 2000, when the market experienced an extinguishment of the internet bubble. Even in the S&P 500, its loss was around 55%.
Of course, this is related to QQQ’s high fluctuations.
So, even if QQQ can let us earn more, it can bring more losses than we anticipated, it is also something that we need to pay attention to.
How to make it more easier
So, how can we make such a mission easier?
Here are the simple things you can do:
Forget the price, just keep investing it
The first one, also the most important one, is to ignore the price, and just keep investing in it.
The reason is, the more you focus on price, the more stress you get, and finally make incorrect decisions.
Here’s how it is.
You open your app or website to watch the price, not only one time, but many times a day. Then, each time you stare at the price, you have a new idea or concern. When these ideas and concerns accumulate, they become stress in your mind, and make you fear and worry.
This condition lasts a very long time, your fears and stress continue growing. Finally, a small correction, maybe just 5%, can combat your mind. You decide to sell them out, to get rid of this uncomfortable situation.
Actually, you don’t have to bear such process.
Reduce the frequency of checking prices, you can free yourself from enduring the painful process just mentioned, and make it easier to hold QQQ without worries.
And, keep investing in it, especially via periodic investment, making it in the simplest process. Don’t think about how to sell it, it is the key to earn it more in the long term.
Put attention to yourself, not to investment itself, nor others’ opinion
Next, put your attention to yourself, not the investment, nor other’s opinion.
This is how I deeply learned from it.
Before I started long-term investing VOO and QQQ, I put more focus on investment, all eyes on how to make big money from it. I watched finance news every day, got the analysis from experts, and surfed many forums for others’ opinions.
However, these made me exhausted, cause I couldn’t handle such tremendous information, and I made many incorrect decisions due to this.
After starting this long journey on VOO and QQQ, it reduces a lot of burden on me, and lets me know that investing is easier than I thought, and can bring real fortune to me.
Now, I focus on my personal growth, just taking a little time to check my investment balance. Magically, I gain a lot more than previous, not only in my life, but also my personal assets.
The less you focus on price, the more you get, that’s what I learned from it.
So, putting attention to yourself can make you get more fortune. Afterall, investing is just a small portion of your life.
Conclusion
Holding QQQ over 10 years is worth doing it. You can earn more than the market, and get the most potential profit for the future trend. Just to pay attention to its volatility, and potential drawdown it brings.
To make it simpler, put less focus on price, and more attention on your personal growth, it’s easier than you think, and it brings more fortunes.