The QQQ is based on the NASDAQ 100 index. hapabapa
The Invesco QQQ Trust ETF (NASDAQ:QQQ) has performed extremely well over most timeframes that investors tend to look at. Using Seeking Alpha's convenient charting feature, we can
QQQ Is Getting Overpriced, But It's Still A Hold (Upgrade)
Summary
- The Invesco QQQ Trust has performed well, but buying it at extreme highs has resulted in severe, prolonged negative returns.
- Buying the NASDAQ-100 at its highest point in 1999 resulted in a 15-year breakeven period--as bad as the Dow in 1929.
- The NASDAQ-100 index is currently priced at high valuation multiples, indicating that it may be overvalued.
- At the same time, the fund's highly innovative and dynamic constituents often beat earnings, due to technological factors not well captured in DCF models.
- For this reason I consider the fund a hold, even though conventional financial analysis techniques point to it being a sell.
Financial journalist. Passed CFA Level 1. Seeking value and dividend growth opportunities, and sharing what I find on Seeking Alpha.
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