Just Buy QQQ
Why the Market Index Might Be Your Best Bet
If you’ve made it through the noise of TikTok traders, YouTube pumpers, and CNBC hot takes, you’ve probably heard someone say, “Just buy the index.”
It’s not bad advice. In fact, for most long-term investors, it might be the smartest move you can make.
This came up while I was talking to my son about building a portfolio. We were looking at the difference between picking individual stocks like Nvidia and simply owning QQQ — the ETF that tracks the Nasdaq-100. He asked a good question:
“Why not just buy the QQQ and hold it for 40 years?”
The short answer: you can. And it will probably work better than most other strategies — especially if you’re not making investing your full-time job.
Let’s unpack why.
Index Investing Is Not “Settling”
A lot of newer investors feel like buying the index is a cop-out — like it’s the choice you make if you’re not smart enough to pick winners.
That’s a myth.
When you buy an index ETF like QQQ (Nasdaq-100), SPY (S&P 500), or DIA (Dow Jones Industrial Average), you’re buying exposure to hundreds of companies across a broad swath of the economy. You’re betting on the system, not a single stock. And historically, that bet has paid off.
The S&P 500 has returned an average of ~10% per year over the last century.
The Nasdaq-100 (tracked by QQQ) has done even better over the past few decades — closer to 15–16% annually, though with higher volatility.
If you’re investing over a 30–40 year time frame, those returns compound dramatically. No stock picking necessary.
Passive Beats Most Active — Consistently
Study after study shows that most actively managed funds underperform their benchmarks over long time periods. Why? Because picking winners consistently is incredibly hard.
Even if you get it right once — say you bought Nvidia five years ago — will you know when to sell? Will you get the next one right too? Are you prepared to lose 30% during a drawdown and still hold?
Professional managers struggle with this. The average retail investor doesn’t stand a chance without serious time, discipline, and research.
With index investing, you don’t have to win that game. You just ride the average. And in the market, the average is actually very good.
The Power of “Set It and Forget It”
Here’s what I told my son: if you’re 22 and putting money into a Roth IRA that you won’t touch for 40 years, you don’t need to outsmart the market. You need to stay in it.
That means avoiding emotional trades. It means ignoring the urge to jump in and out based on headlines. And it means buying something like QQQ, SPY, or a combination of broad-market ETFs — and letting time do the work.
This is how compound interest becomes your ally. Even at 10–15% average annual growth, that investment can multiply 10–20x over four decades. Without needing to pick the next Tesla.
It’s boring. But it works.
When to Add Active Management
Now, that doesn’t mean you never touch individual stocks. If you’ve got the time, interest, and experience, active management can add value around the edges. That’s what we talked about in our conversation.
Let’s say QQQ gives you a 15% return over the long run. If you’re really skilled — and lucky — you might pick a handful of stocks that beat that. Maybe you bump your returns to 20%. Or even 25% in a good year.
That’s where something like a “Lunar Landing Portfolio” comes in — a curated group of 10–15 high-conviction growth stocks that you believe will outperform the broader market. If you’re managing your risk and sizing correctly, that portion of your portfolio can give you some upside.
But don’t confuse that with a core strategy. That’s an overlay, not a foundation.
The Core-Satellite Approach
One way to balance passive and active is with what’s called a core-satellite portfolio:
Core (70–90%): Broad-market ETFs like QQQ, SPY, or DIA. Passive, low-cost, and well-diversified.
Satellite (10–30%): Actively managed picks — individual stocks, thematic ETFs, alternatives, or even crypto.
This way, most of your money is riding the market’s long-term growth. You still get to explore themes, invest in what you believe in, and potentially outperform — but without putting your entire net worth at risk if one idea goes south.
Why QQQ?
So why do I keep coming back to QQQ?
Because if you’re betting on where the next four decades of innovation, disruption, and growth will come from, the Nasdaq-100 has a solid case:
It’s tech-heavy, but not only tech: QQQ includes companies in healthcare, consumer discretionary, and communications too.
It’s rebalanced quarterly — so underperformers drop out, and rising stars rotate in.
It represents companies with massive R&D budgets, global footprints, and competitive moats.
In other words, QQQ gives you exposure to the part of the economy that’s driving the most transformation — and has the potential to keep compounding for decades.
Don’t Overcomplicate It
There’s a temptation, especially for younger investors, to want to beat the market. To find the secret edge. To build a perfect portfolio that outperforms every year.
But the truth is, just matching the market over time already puts you ahead of most people. That’s what QQQ, SPY, and similar index ETFs allow you to do.
You don’t have to guess who wins every earnings season. You don’t have to time the Fed. You don’t have to watch the chart patterns. You just have to show up consistently — put the money in, keep it there, and let the decades do what decades do.
Next in the Series:
We’ll turn to income-focused investing — how your strategy shifts as you get older, and what it means to move from growth to yield.
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