Over the past 10 years, the S&P 500 has climbed close to 200% in value. On average, that's an increase of about 12% per year. It means that your investment in it could have tripled during that time. Mirroring the S&P 500 can be a great way to build wealth over the years.
However, there could be an even better option: focusing on growth stocks.
During the same 10-year period, the NASDAQ has risen 386%. But you can do even better than that. The Invesco QQQ Trust (NASDAQ:QQQ) contains the top stocks on the NASDAQ and it has performed even better over the past decade, soaring by 476%. The exchange-traded fund (ETF) charges a fairly minimal expense ratio of 0.2%, ensuring that investors keep nearly all of the earnings they make from their investment in the fund.
The ETF is heavily tech-focused, with about 44% of its holdings coming from the technology sector. Another 20% is in communication services, and there's 19% in consumer cyclical. Other sectors make up less than 10%. Three stocks that are pillars for the fund are Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) – the only three stocks that account for 10% or more of the ETF's assets.
While there may be concerns that tech stocks are overvalued right now given that the economy isn't in the greatest shape, over the long term, they'll likely continue rising in value. Technology has been growing in importance in everyone's day-to-day lives and that's a trend that's not likely to change anytime soon. And so if you're a long-term investor looking to make the most bang for their buck without taking on significant risk, the Invesco QQQ fund could be one of the best options for you today.
