Then and Now – QQQ

Then and Now – QQQ

Welcome to another Then and Now post, a continuation of my series where I revisit some older blogposts and either rip them to shreds (because my thinking has totally changed on such subjects) or I’ll confirm my position on some subjects including some specific stock or ETF investments.

Today’s post is a departure from any top-stocks that I/we own.

Instead, I’ll share my investing history with a low-cost tech ETF: QQQ.

You can read about my previous Then and Now posts on certain stocks (good and bad!) at the end of this post.

Then – QQQ

Passionate readers and subscribers of this site will know, I’m a HUGE fan of not just dividend paying stocks but low-cost ETFs as well. 

The reason for owning some ETFs beyond some dividend growth stocks is simple: I cannot predict which stocks will truly succeed long-term. 

So, owning low-cost ETFs is a hedge against how I’ve largely unbundled my Canadian ETF for income, beyond holding a few U.S. stocks for mostly portfolio defence.

Weekend Reading – Playing portfolio defence and offence

Years ago, I got a reader question about whether it was best to own Vanguard VTI or iShares ITOT.

I mentioned in my reply that was like splitting hairs given both low-cost U.S. ETFs have and will likely continue to deliver very similar, strong returns. 

“Whether you invest in U.S.-listed VTI, ITOT, SPY, IVV or another low-cost U.S. fund that tracks the U.S. S&P 500 or the U.S. total market, I think you’re picking a winning long-term equity product for your portfolio.”

I’ve been right, at least historically speaking. 

VTI vs. ITOT November 2023

Source: Portfolio Visualizer.

But even before that post, I invested in a small amount low-cost tech ETF QQQ – not because I didn’t think VTI, ITOT or other S&P 500 ETFs were bad choices, not at all, just that I believed at the time Invesco’s QQQ could perform better.

“Invesco QQQ ETF gives you access to a diverse group of cutting-edge Nasdaq-100 companies — all in one fund.” – Invesco

Since launch in 1999 (gosh, I wish I owned it then!) QQQ has demonstrated a history of outperformance, typically beating the S&P 500 Index.

I started writing about and owning some QQQ (a small amount mind you) back in 2015, with an updated LIRA post in 2018 after selling my Coca-Cola stock. 

What is a Locked-In Retirement Account (LIRA)? Here is my update

I was learning then, as I’ve learned recently, that owning equities beyond Canada offers some much needed growth for my investment portfolio. Total returns really matter. 

Now – QQQ

Until this day, QQQ remains in my LIRA and I’ll continue to own it there for the coming years. I see no reason to sell this ETF anytime soon.

Will QQQ continue to outperform the S&P 500?

I don’t know. I certainly didn’t see QQQ returns being up over 40% this year, but it happened?!

Anything is possible when it comes to investing…

QQQ has done very well against the likes of IVV (an S&P 500 indexed fund) and more total market ETFs like VTI and ITOT.

Then and Now - QQQ

Source: Portfolio Visualizer.

My plan is to continue owning QQQ for the same reasons I bought it in the first place, as a small tech-growth kicker for my portfolio based on the assumption that I cannot predict the financial future better than anyone else.

Happy to hear your thoughts on this low-cost ETF that takes advantage of the U.S. tech market, or whatever else you might own, for growth as part of your lazy investment portfolio.

Mark

Selected Then and Now posts and stock ownership:

As promised above, you can see some of the stocks I’ve been buying and holding, or not (!), over the decades below. I welcome your thoughts and feedback on any of these stock selections and holding periods – happy to discuss anytime!

In the summer of 2023, I recapped why I own Canadian Natural Resources (CNQ).

I continue to own a bit of BlackRock (BLK) stock in my portfolio. 

I posted my ownership of TD Bank (TD) here after more than a decade of stock ownership.

This was my update about owning Telus (T). 

I enjoy owning low-volatility, higher growth stocks like Waste Connections (WCN)

I’ve owned Canadian National Railway (CNR) since 2016.

This is my 10-year+ ownership in Procter & Gamble (PG).

But not every purchase is a good one. Far from it! Read on about H&R REIT – and why I kicked this company to the curb!

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

12 Responses to "Then and Now – QQQ"

  1. Mike, I am a 69 year old retiree requesting your advice on investing in EDG909 recommended by my advisor as a key holding in the 30% of my portfolio allocated to fixed income. I have reservations about its mostly non investment grade holdings, its sliding scale mgt fee (1% up to 5%, 2% above 5% plus the advisor’s fee) its high minimum investment (20K), its monthly NAV valuation, monthly purchase frequency and quarterly redemption (requiring 15 day advance notice) and its 5 year track record which is all over the map. The advisor is promoting the attractive current yield over 9% and its almost 10% YTM with a 3 year duration, as well as its attractive potential for NAV increases as interest rates fall. The advisor recommends a minimum 5 year holding period which I support should I invest
    I currently have most of my portfolio in HISA yielding over 5% and am leaning towards splitting the fixed income portion 50/50 between ZAG and HISA which would more than comfortably fund my RRIF needs for the next 2 years and the drop in HISA yield as interest rates fall would be offset by the rising price of ZAG, which to me makes more sense.
    My head says the risk and other non attractive features of EDG909 I mentioned above is difficult to justify the potential higher yield
    What do you say?

    Reply
    1. Hi Brent, no advice, but keep it simple is my suggestion….and that really depends on your goals.

      Personally, here is my position on cash and any holding periods of it.
      https://www.myownadvisor.ca/how-much-cash-should-you-keep/

      When it comes to fixed income, and bonds, only you can decide:
      https://www.myownadvisor.ca/why-would-anyone-own-bonds-now/

      No advisor can predict the financial future. I’m not sure why they suggested 30% bonds to you, but that could be helpful – I don’t really know 🙂

      Personally, without too much analysis, I don’t know of many products that deliver anything like an “attractive current yield over 9% and its almost 10% YTM with a 3 year duration…” without some hidden agendas.

      So, on the flipside, for 4-5%+ yields with very low risk, I like HISAs, Cash ETFs like CBIL and UBIL, and some 1-year GICs now.

      I can’t speak for your income needs, your tolerance for risk, your spending needs near-term but I do know we want to have 1-year’s worth in cash/cash equivalents as we enter semi-retirement in another year or so and as we enter full-on retiremennt in the coming 5+ years in our 50s I will be considering up to 2-years’ worth of cash/cash ETFs/GICs for us as well as part of our cash wedge. I hope those links above and the one below offer some insights beyond what is a 100% stock/equity personal portfolio beyond that for income and growth. 🙂

      https://www.myownadvisor.ca/the-cash-wedge-managing-market-volatility/

      Mark

      Reply
  2. Me thinks more than a few investors out there are suffering from recency bias.

    Go to the TD e-Series website and the TD Nasdaq Index returned 5.89% per annum since inception date (Nov 26, 1999).

    Return for TD Canadian Index fund 6.33% per annum (same inception date as above).

    https://www.td.com/ca/en/asset-management/funds/solutions/mutual-funds/

    Time dependent of course.

    I don’t know what future performance of the various markets will be, and to be quite blunt, nobody else does either.

    Reply
    1. Very fair. All ETFs and stocks have recency though, depends on your holding period, etc.

      All I know is, I’ve doubled my QQQ money in the last few years.

      Will that happen again? I doubt it. No way QQQ returns another 45% next year.

      If it does, I own it at least.

      Reply
  3. What do you think about QQCC and QQCL from horizon etf here in Canada, vs qqq? Thanks

    Thinking of owning under non registered. Tfsa and in rrsp too to collect some dividend when nasdaq is getting toppy ( but less growth compared to just the Qs)

    Reply
    1. I don’t know too much about each, to be honest. I’m not a huge fan of covered call ETFs but I know they work for some (re: QQCL). The MER >0.80% seems high which is not really for me.

      I tend to own only CDN dividend paying stocks in our taxable accounts, a bit of a bias there.

      Mark

      Reply
  4. Hi Mark,
    I couldn’t agree more! QQQ has been one of my favs for over a decade. If you want to get exposure to the most innovative large cap US companies out there, it’s a great way to do it.

    And hey, why wouldn’t you want to do that?!?!

    Love getting your perspective on things. I don’t always agree, but that’s exactly what I’m looking for… different views.

    Please keep up the great work!

    Doug

    Reply

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