Daily Stock Pick: October 25th, 2022

Stocks ticked lower in early trading as investors awaited earnings results from big tech names, Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), and Microsoft (MSFT).  The move lower this morning came after a tech-led rally lifted the major indices last week, proving once again – the dip buyers stand ready.

“In the near term, we believe indiscriminate selling has created attractive entry points, particularly into some high-growth-potential stocks,” said Tony DeSpirito, CIO of U.S. fundamental equities at BlackRock.  

Over the long run, the stock market has a history of rebounding and moving higher.  That’s especially true for stocks that have significant growth potential.  But along with the potential for supercharged returns from large-cap growth comes the potential for volatility.  Investing in a fund fixed on growth can help diversify your portfolio while reducing risk.  

Today we’ll focus on one of the most widely traded funds worldwide.  It’s also quite useful as a buy-and-hold investment in the historically volatile tech sector.  Read on to learn more.   

The Invesco QQQ Trust (QQQ) is one of the most widely traded ETFs worldwide, as is evident from its high average daily trading volume.  QQQ is often used as a trading vehicle by short-term players but is also helpful as a buy-and-hold investment for those looking to maintain a hand in the historically volatile tech sector.  

Often referred to as “the triple Q’s,” the fund offers exposure to non-financial stocks listed on the NASDAQ.  QQQ has a relatively narrow portfolio (only 100 names) and is much more concentrated in its top names, which makes it more volatile than many other ETF options with more diverse exposure.  The fund and its underlying index, the NASDAQ 100, are rebalanced quarterly and reconstituted annually.   

QQQ holds some of the world’s biggest innovators, including Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN).  The fund is well-favored by the Wall Street pros for its strong performance, tax efficiency, and low cost.  It should be noted that the expense ratio for QQQ is one of the lowest in the industry.

The Invesco QQQ Trust (QQQ)

  • Weighted Average Market Cap  $851.7B
  • Price / Earnings Ratio   24.43
  • Price / Book Ratio  6.54
  • YTD Daily Total Return  -30.33%
  • YTD Return  -30.68%
  • Yield  0.74%
  • Expense Ratio  0.20%
  • Net Assets   215.24B
  • Number of Holdings  103
  • Top Holdings   Apple (APPL), Microsoft (MSFT), Amazon (AMZN)