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About Nasdaq 100

The Nasdaq-100 (NDX) is a stock market index that tracks the performance of 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index, meaning that the stocks’ weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components.

Key Points:

  • Composition: The index is dominated by technology companies, but also includes companies from other sectors such as telecommunications, biotechnology, media, and retail.
  • Market Cap: As of October 29, 2024, the Nasdaq-100 has a market capitalization of over $20 trillion.
  • Performance: The Nasdaq-100 is one of the best-performing stock market indexes in the world, with a long-term track record of outperforming other major indexes.
  • Volatility: The Nasdaq-100 is a more volatile index than the S&P 500, due to its concentration in technology stocks.
  • Dividends: The Nasdaq-100 has a lower dividend yield than the S&P 500, as many of its constituent companies are growth stocks that reinvest their earnings back into the business.

How to Invest in the Nasdaq-100:

There are several ways to invest in the Nasdaq-100:

  • Exchange-Traded Funds (ETFs): ETFs track the performance of the Nasdaq-100 index and trade on stock exchanges. Popular ETFs that track the Nasdaq-100 include the Invesco QQQ Trust (QQQ) and the PowerShares QQQ Trust (QQQC).
  • Mutual Funds: Mutual funds that invest in the Nasdaq-100 are another option. These funds are actively managed by professional fund managers.
  • Direct Stock Ownership: You can also invest in the Nasdaq-100 by buying shares of individual companies that are included in the index.

Important Considerations:

  • Risk: The Nasdaq-100 is a more volatile index than the S&P 500, so it is important to be aware of the risks involved before investing.
  • Diversification: It is important to diversify your investments across different asset classes and sectors.
  • Long-Term Perspective: The Nasdaq-100 is a long-term investment. It is important to have a long-term investment horizon when investing in this index.

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