The traditional advice for equity investing is to “buy low, sell high.” However, buying when stock benchmarks are at or near record highs is a strategy that is often overlooked. In today’s market, the S&P 500 has been hitting all-time highs consistently since the beginning of the year, proving that new highs can lead to even more highs.
For example, the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) have been rewarding investors who bought in at recent highs. These exchange traded funds have been reaching new 52-week highs regularly and have seen impressive returns of 6% year-to-date and over 40% in the past year.
Both QQQ and QQQM track the Nasdaq-100 Index (NDX), which like any other equity gauge, experiences fluctuations in its movement. Historical data also shows that moving to cash after stocks hit new records is not the most effective strategy for long-term growth.
In fact, research from Schroders reveals that staying invested in the market over the long term has proven to be much more profitable than trying to time the market by moving in and out based on new highs. This strategy has consistently underperformed over the past several decades.
While QQQ and QQQM may not break records every day, investors who buy in at highs could see significant rewards over time. So, despite concerns about investing in high-flying ETFs, historical data suggests that staying invested in the market, even at record highs, can lead to substantial gains in the long run.
In conclusion, buying ETFs like QQQ and QQQM at highs could be a rewarding strategy for investors looking for long-term growth. For more news and analysis on ETFs, visit the ETF Education Channel.