Okay, so you’ve been playing the market with either the Vanguard S&P 500 ETF (VOO 0.08%) or the Invesco QQQ Trust (QQQ 0.08%). Good for you. Honestly, it’s not like you discovered cold fusion, but I guess a few percentage points is something. The QQQ has been the flashy one, all tech-fueled exuberance, but the S&P 500… it’s just there. And people seem okay with that. Which, frankly, is unsettling. It’s supposed to be diversified, right? But 35% in tech? That’s not diversification, that’s just…lazy. It’s like saying your diet is healthy because you eat a salad… with a side of fries and a milkshake. It’s the idea of healthy.
And here’s the thing that really gets me. Everyone’s so focused on returns, returns, returns. Like we’re all just chasing the highest number. What about risk? What about the sheer, unadulterated concentration of everything in a handful of companies? It’s like putting all your eggs in a basket…made of glass…carried by a guy on a unicycle. It’s just…asking for trouble. And nobody seems to care! They’re just thrilled with the numbers. It’s infuriating.
What Is In These Things, Anyway?
Look, I get it. Most people know what these ETFs are supposed to do. The Vanguard fund tracks the S&P 500. The Invesco fund…well, it tries to track the Nasdaq-100. But let’s be honest, it’s basically a tech fund with a complicated backstory. They call it “not a pure tech ETF,” which is like saying a shark isn’t a predator. Technically true, but deeply misleading. 64% in tech, another 18% in consumer discretionary – Amazon, Tesla… it’s practically a tech fund in disguise. And nobody wants to admit it!
So, here’s the choice: do you want a fund that’s openly tech-heavy, or one that pretends it’s not? It’s a philosophical question, really. And frankly, I’m exhausted by the pretense.
Risk and Concentration: Are We Even Paying Attention?
Over the last decade, the QQQ has outperformed the S&P 500. Fine. But that’s when everything was going up. Of course, it looked good. It’s easy to look good when you’re riding a wave. But the QQQ is also 22% more volatile. 22%! That means it swings around more, and that means more risk. And nobody seems to factor that in. They just see the higher return and think they’re geniuses. It’s maddening. It’s like winning a raffle – it feels great, but it doesn’t mean you’re skilled.
And here’s the kicker. If the market decides tech is no longer the place to be, that QQQ could fall faster than a lead balloon. And then what? Then you’re stuck with a high-risk laggard. And I’m supposed to be okay with that? I’m supposed to just shrug and say, “Oh well, it was fun while it lasted”? No. Absolutely not.
Which ETF Deserves Your Money?
Look, the QQQ has been a good performer. I’ll grant you that. But at this point, I think the Vanguard S&P 500 ETF is the slightly less terrible option. The market is starting to broaden out, and that gives the S&P 500 a small advantage. If the economy slows down, or if the labor market cools off, investors might start looking for safer havens. And expensive tech stocks? They’re not exactly known for their stability.
Over the long term, a more diversified S&P 500 ETF is the better play. It’s not exciting. It’s not glamorous. But it’s…responsible. And frankly, in this market, responsible is a radical concept.
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2026-01-18 03:12