The stock market hasn’t been off to a strong start to 2026, particularly growth stocks. Investors are concerned about not only inflated valuations for many stocks but also high spending on artificial intelligence (AI) and the possibility of a bubble bursting in the near future.
While the S&P 500 has fallen by more than 1% since the beginning of the year, the Nasdaq, which is home to many of the top growth stocks in the world, has fallen by around 3%. But with the potential for even more of a decline as the year goes on due to economic and geopolitical uncertainty, is it still a good idea to invest in a fund such as the Invesco QQQ Trust (NASDAQ: QQQ), which tracks the Nasdaq’s top stocks?
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The Invesco QQQ Trust tracks the Nasdaq-100 index, which is a collection of the largest non-financial stocks on the Nasdaq exchange. That, however, makes it a very tech-heavy ETF, with right around 60% of its holdings being tech stocks. Its largest positions are also in the leading tech companies, including Nvidia, Apple, and Microsoft. Combined, those three stocks account for 22% of all its holdings.
While these stocks have helped the Invesco Trust accumulate strong returns in excess of 460% over the past decade (versus gains of just 233% for the S&P 500), that also makes the fund a bit vulnerable these days. If there’s any weakness in the tech sector or any hint of a slowdown in AI spending, these tech giants could be due for significant declines in value, which would weigh down the Invesco ETF in the process.
There is always going to be some risk with an ETF that has as much exposure to tech as the Invesco Trust has. But if you’re investing for several years or even decades, then that risk is spread out over a longer time frame and can be much more tolerable. That’s because while there may be a downturn in a given year, tech stocks can and have recovered in the past. And by investing in the Invesco fund, you don’t have to worry about tracking the best stocks, as it’ll adjust over time since it will include the largest and most valuable non-financial stocks on the exchange.
As long as you’re willing to accept the short-term uncertainty, the Invesco ETF can still be a great buy today, as the biggest payoff will come from hanging on to it for the long haul.