Thinking of adding QQQ?

[Flyfish1]

SO, I finally finished my rollover IRA process and they liquidated my non self directed holdings, which in my case was all the buy/hold investments - which for many years was SPY and RSP. (Not talking about the bond side of the portfolio.)
So, now I have a reset situation - was going to go either back to SPY or VTSMAX, but then started to think maybe having some NASDAQ exposure would be smart.
I looked at Portfolio Visualizer and adding QQQ definitely helps the returns a bit but also increases the volatility a bit. I would not exceed QQQ holdings of more than 40% vs SPY /VTSMAX as the volatility gets too uncomfortable for me.
Any thoughts on adding QQQ?

 

[Al18]

The SP500 entered into a correction on Friday. All stocks look pretty choppy thru the end of this year.

 

[Kings over Queens]

I'm long on QQQ with about $400,000 held across IRA's and our brokerage account. Almost 18% of our portfolio across the board is in indexed holdings, including QQQ.

As I get older (56) the desire for a simple low cost set it and forget it portfolio is very attractive. Cubes have been beaten up recently, but they will bounce back. Same with the FXAIX.

 

[RetiredAt49]

I hold a sizable amount of QQQ in my portfolios because (as OP points out via Portfolio Visualizer) QQQ has had great returns. However, the majority of my portfolio is in VTI and VOO - I use them as tax loss harvesting partners in my taxable brokerage account and they have similar returns.

 

[tutan]

Yes the power of QQQ as Invesco used to say on their fund page. As you already know both SPY and QQQ hold big percentages in AAPL, MSFT, GOOGL, AMZN, NVDA. I also have about 7% in QQQ but will probably move all stocks to VTI or VT (Vanguard world stock) to simplify and diversify more.

 

[Flyfish1]

Yes the power of QQQ as Invesco used to say on their fund page. As you already know both SPY and QQQ hold big percentages in AAPL, MSFT, GOOGL, AMZN, NVDA. I also have about 7% in QQQ but will probably move all stocks to VTI or VT (Vanguard world stock) to simplify and diversify more.

Hmmm: just found this site: https://www.etfrc.com/funds/overlap.php
Interesting how much overlap there is on these ETF's. Might need to rethink this.

 

[Al18]

If you are looking for diversification, try SCHD

 

[Closet_Gamer]

I break the large cap component of my AA into sub-allocations for QQQ, S&P500, and DIA (Dow). I also have some in DLN and VTV for a bit of a dividend/value tilt.

Setting aside DLN and VTV, I think there is value to having some across the other three indices. As we have seen, sometime they zig when another index zags. It can create good rebalancing opportunities.

YMMV

 

[erkevin]

If you are looking for diversification, try SCHD

and it is at, or about at, its 52 week low.

 

[Flyfish1]

If you are looking for diversification, try SCHD

Agree on the diversification and less overlap component, but I have large allocation to dividend stocks/funds/CEF's so SCHD with a yield below money market has no place in the dividend side and when placed in the buy and hold/passive index side of my portfolio vs SPY/VTSMX/QQQ or a combination thereof it underperforms. So - not a choice for me.

 

[milford]

Use QQQM instead... its basically the same fund with lower ER, geared towards long term investors vs. traders.

 

[DrRoy]

It's a bet on largely big cap tech.

 

[Flyfish1]

Use QQQM instead... its basically the same fund with lower ER, geared towards long term investors vs. traders.

Good call thanks - I did not know of that fund.

 

[RetireBy90]

Have you considered Russell 2000 (IWM is one fund) ? Doesn't seem to have any overlap from the previous link provided and PE of 10 says Yahoo finance. Gives you the smaller cap exposure for longer term investments.

 

[Time2]

Hmmm: just found this site: https://www.etfrc.com/funds/overlap.php
Interesting how much overlap there is on these ETF's. Might need to rethink this.

Thanks for that link, disappointed to see 86% overlap between VTI and VOO. My two largest holdings.

Putting SCHD against either VTI or VOO shows a 10%-11% overlap.
VTI and QQQM has a 38% overlap.
Decisions, decisions, and besides that, I have a chunk of cash in a 5.1% money market, is it time to buy into an ETF?

Decisions, decisions.

 

[Flyfish1]

Have you considered Russell 2000 (IWM is one fund) ? Doesn't seem to have any overlap from the previous link provided and PE of 10 says Yahoo finance. Gives you the smaller cap exposure for longer term investments.

Yes, but a lot of my dividend payers are mid and small cap stocks so that would put too much exposure in that sector. Thx.

 

[target2019]

My investing life is pretty simple now. There's GROWTH, there's VALUE, and there's BLEND.

Rollover IRA is busy for me too. There I am buying VXF (extended market), SCHG (growth), very short bonds, and money fund.

RMD's are right around the corner, so this keg is getting tapped...

 

[Qs Laptop]

Have you considered Russell 2000 (IWM is one fund) ? Doesn't seem to have any overlap from the previous link provided and PE of 10 says Yahoo finance. Gives you the smaller cap exposure for longer term investments.

Small caps have been dreadful for the last 3 years, though they might start rebounding now that the Fed appears to be done hiking rates.. Also, buying into Russell 2000 index exposes you to 1,000 of the worst small cap stocks out there. Yes, I know that is the nature of an index fund, but you're buying a ton of losers along with the winners.

 

[Sunset]

Small caps have been dreadful for the last 3 years, though they might start rebounding now that the Fed appears to be done hiking rates.. Also, buying into Russell 2000 index exposes you to 1,000 of the worst small cap stocks out there. Yes, I know that is the nature of an index fund, but you're buying a ton of losers along with the winners.

Ouch... You may be totally corrrect, glad I only nibbled a bit at it, and only because experts said it was a great way to diversify....

 

[thefist]

A simple way to look at QQQ, it is a large company GROWTH fund. A great choice if that’s what you are looking for.

 

[CincyDave]

Hmmm: just found this site: https://www.etfrc.com/funds/overlap.php
Interesting how much overlap there is on these ETF's. Might need to rethink this.

Interesting site, Is anyone aware of a smilar site for mutual funds or one where you can compare mutual funds and ETFs together?

 

[thefist]

Interesting site, Is anyone aware of a smilar site for mutual funds or one where you can compare mutual funds and ETFs together?

Morningstar fund X-ray does this. Some brokerages include the M* fund X-ray as one of their offered services.

Another metric you can look for is Active Share. Active share tells you how a fund compares to its benchmark. For example, VOO will be near 0% compared to S&P500, since it is an index fund. There is no active management of VOO.

For comparison, MPGFX (mairs & powers growth) is 75%, showing it is actively managed.