Tue Jan 20 11:10:00 UTC 2026: # Tech’s Reign Questioned: Is the S&P 500 Now a Safer Bet Than the QQQ?

The Story:
A recent analysis published by The Motley Fool suggests a potential shift in investment strategy, advocating for the Vanguard S&P 500 ETF (VOO) over the Invesco QQQ Trust (QQQ). While QQQ, heavily weighted in tech stocks, has delivered impressive returns in the past decade, the market may be broadening beyond the tech sector. This shift presents a vulnerability for QQQ, making the more diversified S&P 500 ETF a potentially safer and more advantageous option moving forward, particularly if economic slowdown concerns materialize.

Key Points:

  • The Invesco QQQ Trust (QQQ) is heavily concentrated in tech stocks, comprising roughly 64% of its portfolio, plus an additional 18% in consumer discretionary (including Amazon and Tesla).
  • The Vanguard S&P 500 ETF (VOO) is more broadly diversified, but still holds about 35% in tech stocks.
  • Over the past decade, QQQ has returned an average of 20.8% per year, compared to 15.9% for VOO.
  • QQQ is about 22% more volatile than the S&P 500, making the VOO a safer choice if one accounts for risk.
  • The market may be rotating away from tech, potentially making QQQ a high-risk laggard.

Key Takeaways:

  • Past performance is not necessarily indicative of future results, especially in a shifting market landscape.
  • Diversification can mitigate risk, particularly in the face of economic uncertainty.
  • Investors should carefully consider their risk tolerance and investment goals when choosing between sector-specific and broad-market ETFs.
  • The “Magnificent Seven” may not continue their dominance.
  • A slowing economy might boost the performance of more defensive stocks found in the S&P 500.

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