VOO and QQQ are two highly recommended long-term investment tools that have garnered significant attention and discussion in recent years.
However, for many individuals, the biggest challenge in investing in VOO and QQQ is insufficient funds. You might wonder, “If I’ve finally saved up $1000, can I still invest in VOO and QQQ?”
In this guide, I’ll address whether this is feasible and, if so, how you can invest optimally. This includes considerations such as selecting a brokerage, deciding between lump sum or dollar-cost averaging, and how to allocate your investment amount. Finally, I’ll highlight important considerations post-investment.
Can I invest in VOO and QQQ for just $1000？
Yes, even with just $1000, you can invest in VOO and QQQ, and it’s quite straightforward, just follow the steps below.
How to choose brokerage？
First, we need to decide which broker to use?
If you live in the US, you have multiple choices, like Charles Schwab, Fidelity, Vanguard, Interactive Broker and Robinhood, all of them are popular selections.
These US brokers provide the fractional share transaction with lowest $1, and dividend reinvestment plan, making us much easier to invest without any limitation.
But if you’re non-US residents, you still have lots of choices.
Some US brokers, like Firstrade, Charles Schwab and Interactive Broker, also offer non-US residents to open accounts. Or, you can contact your local brokers if they have a sub-brokerage function, that is a way to buy them.
The basic rule is to select a broker depending on your convenience, after considering how to transfer your money, and the minimum amount for investing.
Should you invest all at once or through regular installments?
Next, we need to decide whether to invest all at once or to gradually buy through regular installments.
Here, I would recommend investing all at once.
The advantage of investing all at once is that it can potentially generate more profit compared to regular installments. Moreover, you never know if future stock prices will be higher or lower. Instead of waiting for a lower point, it’s better to buy all at once now, making it easier to enjoy profits sooner.
Of course, if you are a bit more risk-averse, you can choose to invest gradually through regular installments. However, the profit effect may not be as good as investing all at once.
How should you allocate your investment between VOO and QQQ?
Next, we need to decide how much you want to invest in VOO and QQQ.
The recommendation here is to allocate at least 80% to VOO and up to 20% to QQQ.
The reason for this allocation is that while QQQ may offer better performance than VOO, its volatility is too high, which can easily lead to psychological pressure and temptations to sell stocks.
Since the goal is to steadily grow this $1000, allocating the majority of the funds to the relatively stable VOO would be a more prudent approach, making it easier for you to manage and relax.
Of course, it’s also possible to increase the proportion of QQQ to over 50%, but only if you’re comfortable with facing significant volatility while still being able to maintain your composure.
Next, what should you do after buying?
Finally, after purchasing VOO and QQQ, you have the following tasks:
1.Avoid watching news and forums.
2.Limit opening investment apps to check balance and price.
3.Remember to reinvest dividends, whether manually or automatically.
By attending to these tasks, you can ensure the longevity of your investments, allowing your initial $1000 to grow significantly over time!
But in fact, you can do more about this…
$1000 is a great milestone for your investment, if you’re under some financial pressure. However, $1000 has a little effect on your asset accumulation, even if you choose the one with the highest return.
To let the $1000 grow faster, one more thing you need to do is invest periodically.
You should view the $1000 investment as a start, and keep on accumulating your wealth with more money. No matter you invest $100 or $10 per month since that, it’s a big step to fasten your pace for owning your asset.
If you can increase your periodic investment amount, your money will grow faster with the speed you never imagined, so you can reach the reign of financial independence, and enjoy your better life.