This Strategy Will Work... Until it Doesn't

One of the things I noted when I was talking about performance is that QQQG and QZ are fairly new funds. One being launched in December 2023, so it just barely has a one-year number, and the other one doesn't even have a one-year number. That speaks to this trend that we've seen in the last, I want to say, 24 months of everybody and their mother taking a strategy that they had either against the S&P or a larger Russell index, identical strategy to the NASDAQ.

That has to do with just Nvidia, the Nvidia effect, and all those stocks that are super heavy in the NASDAQ that people want exposure to. So they're just reinventing a product that's been successful and applying it to a different index. That is a trend, but I don't know that it's a trend that is a valuable trend if you're building portfolios.

In essence, the screens that these products are using are kind of resulting in the same exposures. I mean, even COWZ has 54% of its portfolio in tech and has virtually an identical top 10 to the other two. So you're still getting the exposure you want, but I think over time, when markets don't persist the same way forever, even though sometimes we feel like they do, there will be a point in time where Nvidia and some of those other high-flying AI-driven tech names are not the leaders of the market.

I know it sounds crazy, but if you look at the history of the market, there's always been one or two stocks that were, like, for decades right up at the top, and then some of them don't even exist anymore. The point being is that trends change. They do last a long time. What you do want is to have a portfolio that has a universe to choose from that's somewhat diversified.

You mean companies like MCI WorldCom and AOL? Like exactly like that. You can go back even further, and you go back to, like, the 20s, 30s, and 40s, and you're talking about oil companies that all merged into each other. So yes, that's exactly what I'm saying. For that reason, I want a universe to choose from that's going to be more robust and diverse, and that's going to be COWZ.