Is SPY And QQQ (And Maybe Love) All You Need?

On keeping investing simple, or not [View in browser]( [The Juice Logo] Proprietary Data Insights Top Financial Pro ETF Searches This Month Rank Name Searches #1 SPDR S&P 500 ETF 2,475 #2 Invesco QQQ 431 #3 ProShares UltraPro QQQ 405 #4 ProShares UltraPro Short QQQ 286 #5 Direxion Daily Semiconductor Bull 3x Shares 178 #ad [Top Stock Picks for Massive Profits]( Brought to you by [The Alt]( [Are Alternative Investments a gray area? The Alt can add some color.]( [ The Alt - Are Alternative Investments a gray area? The Alt can add some color.]( The most profitable investors stay informed and up to date. Stay on top of Alternative Investment trends with credible articles and videos directly to your inbox with our hand-curated newsletter The Alt. [Subscribe now.]( Is SPY And QQQ (And Maybe Love) All You Need? It’s fitting that today’s Trackstar top five of the top-searched ETFs by financial professionals includes three leveraged ETFs in the third, fourth and fifth positions. Because leveraged ETFs provide the perfect extreme contrast to the simple and straightforward, long-term investing approach we will advocate today. Also fitting that, as usual, the SPDR S&P 500 ETF (SPY) and Invesco QQQ ETF (QQQ) take the two top spots. They’re the two easiest ETFs to understand. SPY replicates the results of the S&P 500 Index. QQQ replicates the results of the Nasdaq-100 Index. Look up a quote of SPY alongside the actual S&P 500 and you’ll see near identical results. Same goes for QQQ. A leveraged ETF uses debt or options to amplify the returns of a stock market index. Take, for example, #3 in today’s Trackstar list—the ProShares UltraPro QQQ (TQQQ). TQQQ aims for daily investment results of three times the daily return of the Nasdaq-100 Index. Number four on the list—the ProShares UltraPro Short QQQ (SQQQ)—strives for daily investment results equal to three times the inverse of the daily return of the Nasdaq-100 Index. The key word in that last paragraph is daily. On any given day, TQQQ and SQQQ will generate the exact same return as QQQ, but times three. If QQQ is down 1.93%, expect TQQQ to be down roughly 5.79% and SQQQ to be up by right around the same amount. You can buy leveraged ETFs—long and short—to replicate two or three times the returns of not only indices, but even individual stocks. You can, but, in most instances, you shouldn’t. As a long-term investor, you might think if I’m bullish SPY or QQQ, why not buy an ETF that generates two or three times the performance? Because of the key word daily. The instruments used to achieve the amplifying effect function on a daily basis. They do not replicate long-term results. In fact, the typical holding period for a leveraged ETF, such as TQQQ or SQQQ, is one to two days. They’re meant for experienced traders and financial advisors (thus, their appearance in Trackstar, filtered to financial pros only), not new or long-term investors. For as accessible as investing has become, it’s remarkable how complicated it can be. It would be easy to fall for a leveraged ETF as a way to double or triple the returns of a long-term position in SPY or QQQ. That’s part of why The Juice is here. To let you know when it’s not only not that easy, but potentially dangerous. Accessible investing isn’t necessarily about [myriad, fancy, flashy and seemingly lucrative options](. To us, access means the ability to participate in long-term market upside without prohibitive commissions and fees. And that’s SPY and QQQ. Interestingly, QQQ markets itself as a superior alternative to SPY. And, to some extent, it has a point. Invesco, the firms that offers QQQ, tells us not only that a $10,000 investment in the ETF 10 years ago would be worth about $56,788 today, but that, over the last year, QQQ has produced 1.67X the returns of SPY (+32.86% versus 19.56%). SPY, managed by State Street Global Advisors, focuses its marketing on the idea that an investment in the ETF gives investors access to the broad U.S. economy. It also points out that information technology stocks compose nearly 28% of SPY’s holdings. No doubt, an investment in SPY gives you exposure to many of the same stocks as tech-heavy QQQ. We’re talking about Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), Tesla (TSLA) and Nvidia (NVDA). With SPY, you get exposure to roughly five times the number of stocks, including names you won’t find in QQQ, such as Exxon Mobil (XOM), Visa (V), Walmart (WMT) and McDonald’s (MCD). While there’s no doubt, QQQ has produced superior returns over time, this is largely because of its tech-heavy concentration. We believe tech will continue to lead this market, in part because of the AI boom, but this doesn’t mean you should ignore all other sectors. So there’s sense in both marketing approaches. Yes, QQQ has been prolific. However, this doesn’t mean this will always be the case. With SPY, you do have a one-stop shop for the names that help drive the economy within and outside of tech. An investment in both gives you out-sized tech exposure without disregarding other sectors. Over the last five years, SPY has returned around 52% compared to approximately 102% for QQQ. If you could invest in only two things, we think SPY and QQQ—any and all other noise aside—make the most sense. The Bottom Line: This is the beauty of ETF investing. It takes the guesswork out of investing by eliminating the need for individual stock picking. If you invest for long-term goals, such as retirement, try not to let the allure of extraordinary returns throw you off course. If history continues to repeat itself, you’ll be in pretty good shape with regular investments into SPY and QQQ for the long haul. Once you’re well-established in this strategy, you can branch it into other ETFs and single stocks. Just not leveraged ETFs! In tomorrow’s Juice, we get into our favorite ETF beyond SPY and QQQ. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D591782?utm_medium=ic-nl&utm_source=112780 ) News & Insights Freshly Squeezed - [Check Out The Juice’s Favorite ETF Screener]( - [Daily Stock Advice With Actionable Insights]( - [10 Best Silver ETFs]( - [10 Best Performing Asia Pacific ETFs in 2023]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D591782?utm_medium=ic-nl&utm_source=112780 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Pixel] [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list](. Manage your subscriptions with our [preference center](. [Unsubscribe here.]( View our privacy policy [here](. Copyright ©2023 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](