No. of Recommendations: 22
KPS
Regarding QQQE,
There is much to be said for doing it yourself rather than buying a fund. No management fees, to start with. Several brokers have one-button order entry from a list, and one-button rebalancing. But the main advantage is that you can eliminate a few firms if you so desire. For example, personally I would probably eliminate about 5 companies and buy the "Nasdaq 95 Equal Weight". (4 Chinese/Cayman domiciled VIEs last I checked, and one firm whose management I find a bit too smelly)
You can also lag changes in index membership. I don't have the data for the Nasdaq 100 list, but for the S&P 500 you do quite a bit better simply by not doing t he index inclusion changes the same day that they do...wait a year instead. The ones being added have usually just had an unusually good streak, and the ones being dropped have usually just had an unusually bad streak. On average, such streaks don't last. The added advantage is that it's a whole lot less work do to the index changes late!
This is worth reading.
https://www.researchaffiliates.com/publications/ar...By my calculation, the mere fact of Tesla having entered the index at a temporarily high valuation around end 2020 has cost investors 1.5% of their wealth. i.e., that's how much richer they'd be if instead of buying SPY they had bought the other 499 stocks the day that Tesla was added, in their usual proportions and tracking changes since, and held until yesterday. That's not because Tesla is a bad company, but just a comment on a flaw in the index tracking system.
Jim
