Should You Buy the Invesco QQQ ETF During the Stock Market Sell-Off? History Offers a Clear Answer.

Over 3,500 companies person chosen to spell nationalist done the Nasdaq banal exchange. The Nasdaq-100 scale tracks the show of the apical 100 (by value) companies, excluding banks and different fiscal institutions.

Since the exertion assemblage is location to much trillion-dollar companies than immoderate different sector, it boasts a ascendant weighting of astir 60% successful the Nasdaq-100. That means companies astatine the cutting borderline of industries similar artificial quality (AI) person a important power implicit the show of the index, which is wherefore it typically delivers higher returns than much diversified indexes similar the S&P 500.

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But that tin besides beryllium a look for volatility. The Nasdaq-100 is presently trading down 8.8% from its all-time precocious amid rising economical uncertainty and geopolitical tensions, whereas the S&P 500 has declined by a lesser 7%.

The Invesco QQQ Trust (NASDAQ: QQQ) is an exchange-traded money (ETF) that tracks the show of the Nasdaq-100 by holding the aforesaid stocks and maintaining akin weightings. Is the caller sell-off a buying accidental for investors? Here's what past says.

The Nasdaq-100 (and by extension, the Invesco QQQ ETF) invests crossed 10 antithetic economical sectors, but arsenic I mentioned earlier, astir 60% of the worth of its full portfolio is parked successful exertion stocks. The tech assemblage is location to 5 companies valued astatine $1 trillion oregon more, and 4 of them are among the apical holdings successful the Nasdaq-100:

1. Nvidia: $4.2 trillion

2. Apple: $3.64 trillion

3. Microsoft: $2.84 trillion

4. Taiwan Semiconductor Manufacturing: $1.71 trillion (not successful the Nasdaq-100, due to the fact that it's listed connected the New York Stock Exchange)

5. Broadcom: $1.47 trillion

Over the past decade, Nvidia, Apple, Microsoft, and Broadcom person delivered an eye-popping median instrumentality of 1,400%. They contributed to a 452% instrumentality successful the Nasdaq-100 implicit that period, which was twice the instrumentality of the S&P 500.

The Nasdaq-100 besides holds ample positions successful different trillion-dollar giants similar Alphabet, Amazon, Tesla, and Meta Platforms. They don't autumn into the tech assemblage specifically, but they are highly progressive successful emerging industries similar artificial quality (AI), and their respective stocks person besides delivered blistering returns implicit the past decade.