If I Were in My 20s, I'd Buy This Spectacular Nasdaq-100 Index Fund and Hold It Forever
Investors who focus on growth in their younger years could build significant wealth by the time they reach retirement.
Overview
The Nasdaq is often the stock exchange of choice for small technology companies looking to go public, because it offers lower fees and fewer compliance barriers compared to alternatives like the New York Stock Exchange. Over the last few decades, many of those budding companies have become trillion-dollar giants, which now feature in the Nasdaq-100.
The Nasdaq-100 is an index of the 100 largest companies listed on the Nasdaq, excluding banks and financial institutions. Over 65% of the value of its entire portfolio is parked in the high-growth technology sector, which is why it usually outperforms the more diversified S&P 500 (SNPINDEX: ^GSPC) index.
Details
Higher returns typically come with higher volatility, but that might be a worthwhile trade-off for younger investors, because it can lead to a much stronger financial position later in life. If I were in my 20s, here's why I'd buy the Invesco QQQ ETF (NASDAQ: QQQ), which mimics the Nasdaq-100, and hold it forever.
Source
Originally published at www.fool.com.