s&p 500 index fund

S&P 500 is reaching for fresh yearly highs, but this isn‘t accompanied by improvements in market breadth – neither stark nor subtle. If anything, the market has become ever more concentrated, with NVDA earnings guidance reflection taking valuations to ridiculous 188.

 

That‘s the AI side of the market, on fire and leading. The only other sectors doing well apart from tech with semis segment, are communications and consumer discretionaries – effect strong enough to overpower badly lagging industrials, materials, financials (chiefly banking), retail, smallcaps and defensives (utilities and staples), which brought about yet another daily bullish call before the opening bell Friday.

 

Debt ceiling deal hype is another factor going in for the bulls as any sell the news reaction seems to me postponed by a couple of days at least if Yellen moved the new make or break date to Jun 05 (there is still almost $40bn in TGA).

 

Friday saw much of the hope for a deal to be reached so

FX: GBP/USD - Possible Scenarios For British Pound To US Dollar

What Is An ETF? Vanguard VOO ETF vs Invesco QQQ ETF: Which is Better for You?

Dividend Power Dividend Power 29.04.2022 08:38
Investing in mutual funds and ETFs is a fundamental part of long-term investing. In addition, when comparing ETFs to individual stocks, they are typically seen as safer investments since they are more diversified. Many of these funds aim to track specific indexes. Two examples of this are VOO which seeks to track the S&P 500 Index, and QQQ, which follows the NASDAQ 100 index. However, it can be hard to figure out which might be a better investment. Below is a comparison of these two popular funds to help you reach a decision. VOO vs. QQQ: Issuer When it comes to VOO vs. QQQ from an issuer standpoint, you're dealing with two very large firms. VOO is issued by Vanguard, the largest issuer of mutual funds globally. They are also the second-largest issuer of ETFs. So, needless to say, you don't become that large without knowing what you're doing. QQQ is issued by Invesco, another large and well-known issuer of mutual funds and ETFs. With more than $1.6 trillion in managed assets, it’s safe to say investing with an Invesco fund is a pretty safe bet. VOO vs. QQQ: Underlying Index Followed As mentioned early, VOO aims to track the S&P 500 Index. The S&P 500 Index seeks to track the 500 leading publicly traded US companies. Market capitalization is the primary criterion for a company to be included in the S&P 500 Index fund, but it is not the only criterion. QQQ aims to follow the NASDAQ 100 Index. The NASDAQ 100 Index includes 100 of the largest domestic and international non-financial companies based on market capitalization listed on the Nasdaq Stock Market. VOO vs. QQQ: Expense Ratios Expense ratios can be vital information when deciding what fund to invest in. Even a tiny difference can become thousands of dollars over the course of investing in a fund for 10 to 20 years. Essentially, with managed funds, there are expenses that go along with it. These expenses could be salaries to pay analysts or portfolio managers, management fees, rent for office space, and many others. Many funds will pass some or all these expenses on to you, the investor. The amount passed to you is shown as the expense ratio. When looking at VOO and QQQ, there is a stark difference in their expense ratios. While VOO maintains a meager 0.03% ratio, QQQ has a much higher ratio of 0.2%. For QQQ, that's more than six times that of VOO, which can add up to a lot of money paid to the fund over the long term. VOO vs. QQQ: Minimum Initial Investments Minimum initial investments (MII) will vary per fund and firm. The minimum initial investment only applies when you initially invest in a fund. Many funds require $100 - $5000 or more for your first investment. After that, you are free to invest any amount you wish on subsequent investments with the same fund. VOO’s current MII is the asking price of one share on that trading day. To give you an idea, as of writing this, VOO stands at roughly $387 per share. QQQ, however, has no minimum initial investment. QQQ is currently sitting at a share price of about $320, but you can essentially invest $1. VOO vs. QQQ: Net Assets and Holdings Comparing VOO vs. QQQ, each fund's top ten holdings are identical; see below. The main difference here is that while holding the same funds, VOO has roughly 24.7% of its $1.3 trillion ($321.1. billion) total assets in these stocks. In comparison, VOO holds about 29.5% of its $808.8 billion in the top ten holdings, roughly $238.6 billion. VOO vs. QQQ Top Holdings: Although tracking different indexes, VOO and QQQ have similar holdings in their top 10. Seven of the top holds are the same with: Apple (AAPL) Microsoft (MSFT) Amazon (AMZN) Tesla (TSLA) Alphabet Class A and C (QQQ holds both, while VOO does not) NVIDIA (NVDA) Meta (FB) QQQ rounds out its top 10 with Costco (COST) and PepsiCo (PEP), while VOO holds UnitedHealth Group (UNH), Johnson & Johnson (JNJ), and Berkshire Hathaway (BRK.A, BRK.B). While sharing similar stocks as their top 10, the amount invested in each varies slightly. VOO vs QQQ: Compositions One of the areas in which the VOO vs. QQQ comparison will differ is the fund composition. As mentioned earlier, VOO aims to track the S&P 500 Index, while QQQ seeks to track the NASDAQ 100 Index. As you might imagine, the number of stocks held in each is very different. QQQ currently has 102 different stocks. There are about 507 stocks in VOO, mostly large-cap and geared toward growth. Fewer stocks could generally be more volatile when there is more market volatility. VOO vs. QQQ: Overall Performance Of course, what most investors will put at the top of their criteria when determining which fund to invest in will be the performance! When looking at the performance of both VOO and QQQ, they both have very similar returns to the indexes they aim to track. Even though we say they have similar top 10 holdings, QQQ's returns over the past 1, 5, and 10 years have been much higher. It should be noted that NASDAQ tends to hold more Technology and tech-related stocks, a booming market sector over the past decade. QQQ Performance: VOO Performance: It should still be noted that the return over each fund's lifespan is better for VOO. It could also be a less volatile fund with more stocks being held meaning it is probably more diversified. VOO vs QQQ: Which is better? When making any investment, it comes down to your comfort level. The significant factor in VOO vs. QQQ is the performance, with QQQ winning out during the tech boom era. However, overall, VOO has had better long-term returns. VOO also has a much lower expense ratio, which should not be taken lightly as QQQ will need to continue outperforming VOO significantly to make up for its fees. VOO also holds more stocks, probably making it a less volatile fund to invest in. VOO vs. QQQ: Final Thoughts Both funds are backed by large asset managers in Vanguard and Invesco. Either ETF would make good additions to an investor's portfolio. While QQQ has better recent performance, the tech boom could be over since technology stocks are struggling in 2022, and the expense ratio is higher. On the other hand, VOO has better long-term total returns and would probably be less volatile. It can also serve as a core holding in some version of the Bogleheads 3-Fund portfolio. In the end, both have strengths and weaknesses. You'll need to determine which better fits your investment style and needs. Disclosure: None Author Bio: The author is the founder of the Dividend Power site. He is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, FXMag, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 100 and 1.0% (81st out of over 9,459) of financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: The author is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 
European Bond Markets See Bear Steepening Amid Real Rate Rise

Higher, Still Higher

Monica Kingsley Monica Kingsley 28.05.2023 17:51
S&P 500 is reaching for fresh yearly highs, but this isn‘t accompanied by improvements in market breadth – neither stark nor subtle. If anything, the market has become ever more concentrated, with NVDA earnings guidance reflection taking valuations to ridiculous 188.   That‘s the AI side of the market, on fire and leading. The only other sectors doing well apart from tech with semis segment, are communications and consumer discretionaries – effect strong enough to overpower badly lagging industrials, materials, financials (chiefly banking), retail, smallcaps and defensives (utilities and staples), which brought about yet another daily bullish call before the opening bell Friday.   Debt ceiling deal hype is another factor going in for the bulls as any sell the news reaction seems to me postponed by a couple of days at least if Yellen moved the new make or break date to Jun 05 (there is still almost $40bn in TGA).   Friday saw much of the hope for a deal to be reached soon, priced in – and the tentative one announced this weekend, will likely invite a some sell the news reaction before the AI mania continues. The midnight May 31 vote on it is a downswing risk, but I‘m not looking for a stunner, and instead expect the deal to pass.   So, the only variable the market chose to override Friday, was somewhat hotter core PCE, which didn‘t result in more than a 30min dip. Jun 25bp hike is now the base case scenario, and the short end of the curve isn‘t budging in its bets on Fed pause then, and rate cuts going into 2024.   Tech still doesn‘t mind the ever widening disconnect to rates, and apart from AI FOMO, a smaller portion of the explanation is that rates on the long end are approaching their peak, and with the onset of recession (most likely Jul-Aug-Sep), these would retreat to arround midpoint of their yearly range (3.50% for 10-y).   Unless a debt ceiling deal fails, the Fed wouldn‘t back off inflation fight and balance sheet shrinking, and with the Treasury back to issuing fresh debt when commercial bank lending to the private sector isn‘t exactly expanding (crowding out effect), new buyers incl. from abroad would have to step up to the plate – and any flight to safety would have of course negative implications for the stock market standing on increasingly fever legs at a time when LEIs keep still sharply decelerating (inevitable recession)...   Keep enjoying the lively Twitter feed via keeping my tab open at all times (notifications on aren't enough) – combine with Telegram that always delivers my extra intraday calls (head off to Twitter to talk to me there), but getting the key daily analytics right into your mailbox is the bedrock. So, make sure you‘re signed up for the free newsletter and make use of both Twitter and Telegram - benefit and find out why I'm the most blocked market analyst and trader on Twitter.   Let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article contains 6 of them.   S&P 500 and Nasdaq Outlook   There is still more to squeeze from this rally, no matter how weak internally it is. Bears have to forget about 4,154, and focus on defending (not the indefensible 4,225 but) 4,235 to 4,245 area – that‘s where the bulls will run into concerted selling.   Not that it would decide the fate of this run aka hyped bull market – 4,275 is a logical target if you look at the weekly chart and consider late Apr setback‘s extension magnet for the buyers, which they aren‘t likely to break to the upside before the medium-term bearish factors and recession catch up.   So, remembering what I stated Friday: (…) That means if you‘re willing to jump in and out fast, you can take the upcoming intraday dip while benefiting from whatever upside next week brings – as a hedge to the medium-term bearish position.   that means you can either chase the remaining upside, minimum as a hedge on the long side, or revert back to or close to the original very wide stop-loss (inititally 4,320, which due to the position sizing relative to dollar value of the given move in percentage terms of your account – my max. 8% rule – shouldn‘t have put you in danger), because I remain convinced we would see meaningful S&P 500 deterioration especially over the summer months. Should the debt ceiling deal announcement not result in a meaningful sell-the-news reaction, I would prefer to reshort from higher levels than to move the current stop-loss considerably higher.   Why then the moves in stop-loss placements this week? That‘s on account of market breadth developments resulting in more or less fuel ahead in the market advance..   The first swallows thereof would coincide with Treasury turning to replenish its account at the Fed, taking off liquidity, which would have a stronger effect than any disinflation progress on Fed easing bets (and don‘t look for disinflation to help too much to drive down nominal wage pressures). What would though an investor do?   For now, it‘s still going to be about Big Tech, communications and consumer discretionaries with some non-banking financials, dividend aristocrats, and then on longer investment horizon, consumer staples, energy and generally necessities of life, these are to benefit the most.     Such an advance breadth isn‘t characteristic of bull markets – the Oct momentum and increasing breadth has become bistory already last year. See equal weighted S&P 500 if in doubt – after the earnings recession, there isn‘t enough momentum in earnings recovery apart from select few and far between.   Credit Markets   Pause in declining bonds indeed materialized, and would prove temporary and coinciding with the upcoming stock market top. For now, HYG would continue the slow appreciation path, supporting stocks during the remaining upside left. True, when the Jan-May period and the month of May isn‘t a down month, it then takes a while for the positive momentum in stocks to fizzle out, which is exactly what we‘re looking at entering Jun.   Gold, Silver and Miners   Gold with silver did catch some bid on inflation data with debt ceiling kicking the can down the road Friday advance hopes. Not only thanks to disinflation, the correction has to go further in time, but I remain bullish especially silver, and only then gold when it comes to year end closing prices – thanks to the return of inflation coupled with subpar growth, equals stagflation.       Thank you for having read today‘s free analysis, which is a small part of my site‘s daily premium Monica's Trading Signals covering all the markets you're used to (stocks, bonds, gold, silver, miners, oil, copper, cryptos), and of the daily premium Monica's Stock Signals presenting stocks and bonds only. Both publications feature real-time trade calls and intraday updates. While at my site, you can subscribe to the free Monica‘s Insider Club for instant publishing notifications and other content useful for making your own trade moves. Turn notifications on, and have my Twitter profile (tweets only) opened in a fresh tab so as not to miss a thing – such as extra intraday opportunities. Thanks for all your support that makes this great ride possible!

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