If You'd Invested $1,000 in QQQ 20 Years Ago, Here's What You'd Have Today
Key Points
The Nasdaq 100 has been one of the market's best-performing indices over the past 20 years.
In total, an investment would have returned more than 16% per year.
But you would have gotten that only if you'd ridden out multiple 20%+ declines along the way.
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Twenty years ago, investing $1,000 in stocks might not have seemed like enough to make a big difference in your portfolio.
It turns out that the Invesco QQQ ETF (NASDAQ: QQQ) would have proven many people wrong.
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Over that time, this fund generated an average annual return of 16.6%, or more than 2,000% in total. That $1,000 would have grown into more than $21,000! And that's with not another penny being added along the way.
But earning that kind of return would have required a remarkable amount of patience and discipline. Even though the tech bubble popped more than 20 years ago, investors in the past two decades would have had to endure 20% corrections in 2018 and 2020, as well as a drawdown of more than 30% in 2022.
Image source: Getty Images.
Many investors would have waved the white flag on the Invesco QQQ ETF at least once during that time. But that's why a long-term buy-and-hold strategy is so important.
When people try to time the market, they usually sell only after stock prices have fallen, which essentially locks in losses. And they typically don't reenter the market until much of the subsequent recovery has already occurred.
In other words, they capture the losses and miss out on the gains. That pattern can significantly damage long-term returns.
Of course, returns over the next 20 years are anybody's guess. But the best opportunity to capture those gains is to invest and simply let the long-term power of compounding do its thing.
Should you buy stock in Invesco QQQ Trust right now?
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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!*
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David Dierking has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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