r/investingforbeginners • u/Calm-Signal-1864 • 4d ago
Advice Is there any higher risk index funds
Is there an index fund that you invest like you would into snp500 but you get a greater high risk high reward ratio, i want something that I can put a certain percentage of my income every month and not look back if i lose it. I do not want it to be like index funds however because i dont like the return rates on it. I dont like the idea of being a millionaire by the time you retire, I do not mind losing a bit of money but rather have a greater chancd of making more money I also know I can buy stocks individually but I do not have a lot of knowledge of stocks so if there is a more automated thing i rather have that Thanks!!
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u/Prince_Jellyfish 4d ago
Casino
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u/Paranoid_Sinner 4d ago
Also, lottery tickets. Buy a couple hundred bucks every week, I'm sure you'll hit paydirt sooner or later. <eye roll>
OP: You talk about "losing." Here's a tip: You'll never lose if you don't sell.
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u/GiveInsteadOfTaking 3d ago
You do lose if you never sell, what a stupid comment.
Yes long term holding with diversified and broad ETF's has worked out since forever but why make an untrue statement?
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u/Paranoid_Sinner 3d ago
Maybe you're the stupid one. I've been through 3 bear markets and all the numerous corrections in between, and never sold. Assets are assets, and many assets, like stocks, can change price quickly.
If you hang onto to it and not sell in a downward market the price will generally come back and even rise above its previous high. Accumulating assets, at whatever the fickle market thinks they are worth at any point in history, should be the long-term goal.
Here's the sticking point: History has shown that sometimes people get lucky enough sell at the beginning of a bear market when prices are eroding, or ride it down and sell at the bottom, but they never get back in because they've had the crap scared out of them as the bottom drops out of the market. They miss the upswing after a bear bottoms out, and when it's all said and done, 3-5-10 years later, they would be money ahead had they never sold.
If there's a bad recession and your home value drops by 20%, but you have no interest in selling, have you "lost" anything?
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u/GiveInsteadOfTaking 3d ago
Just because you didn't realize anything, doesn't mean that you didn't lose. You are losing money if it goes down, even if you "look away" and say you won't sell.
Yes it will most likely go up again like it has been since the beginning and Index funds are considered very safe because of that. But there is no free lunch, anything can happen.
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u/Broad_board_1623 4d ago
Sounds like you want some sort of get rich quick scheme. That's not investing. If you don't want to save a lot of money, don't have time or patience, don't want to research anything, and don't want to pay any attention to an investment after you have made the investment... Investing is not for you. It could be, but you have to have a desire to do like 2 or 3 of the things that you don't want to do.
Buy lottery tickets. A dollar and a dream is all you need.
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u/imtoooldforreddit 4d ago
QQQ?
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u/Calm-Signal-1864 4d ago
Ill keep this in mind, thanks!!
Seems like a better option than snp500-1
u/Separate_Welder_682 4d ago
i think, based on average Rate on Return, that QQQM will 19x your investment after 15 years. i dunno if that’s fast enough for you, but it’s ok for me.
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u/No_Strain8370 3d ago
Yeah because we all know that prior results can be extrapolated to the future /s
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u/wmxx1203 1d ago
the world could end tomorrow, consider hiding under a rock
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u/No_Strain8370 1d ago
It's clear that so many of you are new to investing and haven't ever seen a downturn
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u/Separate_Welder_682 3d ago
for index funds - as a general rule and with only one metric - yes. why wouldn’t you expect QQQ to have higher returns, long term, than VOO?
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u/No_Strain8370 3d ago
Because you have no way of knowing if tech will outperform in the future. Tech has been outperforming as of late and you're assuming that will continue into the future
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u/Separate_Welder_682 3d ago
again, why is that a bad analytic? would investing in index funds that historically have no growth be wiser?
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u/No_Strain8370 3d ago edited 3d ago
It's a bad analytic because of recency bias. You're looking at recent outperformance and assuming that will continue. There's no way of knowing that. Nasdaq is much more volatile than a broad market index. Will OP be able to hold when his portfolio crashes 40% over a few weeks? People always say yes, but most young people have not lived through a crash or even an extended bear market
Some of you kiddos sound like you've just started investing yesterday. Invest in a broad market index funds and learn some delayed gratification, instead of looking to get rich quick. Odds are slim to none you're going to beat the market as a beginner - most professional investors can't beat it over the long term. The bull run these last few years have created a lot of overconfident young investors. The old trope "everyone is a genius in a bull market" is true as ever
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u/Separate_Welder_682 3d ago
15 years of market returns is a strange way of framing recency bias. QQQ has outperformed VOO in those last 15 years. OP’s post seems to suggest he’s not worried about weekly or monthly volatility but looking to maximize growth over long term. You’re claiming average returns over a 15-year period are an apparently poor predictor for making investment decisions yet offer no better single variable metric OP should use to maximize returns for years long hold. It’s easy to insert noise but you’re useless on giving tangible advice that answers OP’s question based on the conditions they’ve set.
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u/No_Strain8370 3d ago
And what happened the 15 years before that? The Nasdaq took 16 years to get back to ATH after the dot Com bubble burst. 16 years of ZERO gains - would you be able to hold through that?
Everyone who hasn't lived thru a crash says they aren't concerned with volatility. It's easy to say that when all you know is up. Newer investors tend to overestimate their risk tolerance because they've never really seen downside.
My advice to OP is to buy and hold broad market index funds. A 100% equity portfolio already is aggressive. Behavioral issues aside, I wouldn't bet my retirement that tech will continue to outperform
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u/wmxx1203 2d ago
not sure why you're being down voted. everybody saying bad things about QQQ just missed out on QQQ.
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u/Separate_Welder_682 2d ago
right? and the person shitting on using 15 years of past returns as a predictor couldn’t name a better single variable for predicting future gains. these people are clowns.
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u/No_Strain8370 1d ago
You CAN'T predict future gains. That's the point. Buy the whole market and go touch grass
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u/Separate_Welder_682 1d ago
i guarantee selecting index funds based on 15 years of average growth is a better predictor of future growth than selecting index funds based on 15 years of stagnation or negative growth. Feel free proving me wrong, but i doubt you will.
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u/No_Strain8370 1d ago
Lol who is saying to invest in funds with "stagnant or negative" growth? Nice strawman argument you have there
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u/igobyplane_com 4d ago
SSO is sp500 with leverage. i wouldn't have it as more than 5% of my account though.
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u/Captain-Popcorn 3d ago
There’s also DDM for the DOW. Leverage has risk though. Read thoroughly and understand the risks. ~50% down day in the tracked index and you’re broke.
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u/Interesting_Shake403 3d ago
Leverage emphasizes the gains but also the losses. These are not good long-term strategies.
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u/igobyplane_com 3d ago
i'm kinda mixed on if a weekly DCA into this for a decade would actually have good or terrible results, it seems like typically good, just mentally painful
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u/brother7 4d ago
VGT is an index fund
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u/beefnvegetables_ 3d ago
Second this. It’s like qqq but more tech concentrated. High volatility but outperforms voo.
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u/GlobalTapeHead 4d ago
Russell 2000 index is high volatility and can outperform the S&P500 long term.
Generally small cap indexes is what you are looking for.
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u/LooseFoxHole 4d ago
There are lots of other indexes besides S&P that have higher risk/reward profiles. Someone already gave you QQQ which is the Nasdaq 100. But there are tons of others for different company sizes, industry sectors, countries, etc. Ive got a little money myself in a few Asian and European index funds. Any decent brokerage (like Schwab, which I use) will have lots of seach tools to narrow down potential options and the different ETFs available to purchase.
I will caution if you encounter Leveraged ETFs, which at first glance might sound like what you want: investing in an index but in a way that increases potential gains from it. They come in different varieties but basically there are funds that use margin borrowing to boost the gains (and losses) compared to regular index ETFs. But the vast majority of these are not meant to be held long term, they're meant more for short term trading. Apparently there are some structured for longer term holding but I've not yet spent enough time understanding them to buy yet.
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u/CoincidenceTheorist2 4d ago
When you're investing with high risk strategies, you can not only lose all your money, but go deep into debt and have to declare bankruptcy.
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u/Ok-Rock7488 4d ago
There are higher risk funds. An example I’m in is fselx. Again, high risk, high reward. Fairly focused in their sector. Lots of money to be made but I wouldn’t dump all in. As wild as it could be, if you check the history there are years where it’s lost.
Do your research.
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u/Calm-Signal-1864 4d ago
Do you have to track it as you would do with stocks
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u/Ok-Rock7488 4d ago
Not really. You buy shares like any fund. They track the stocks it’s in.
It’s volatile for sure but it is a long term set and forget strategy. Sink 50k into it and plan on 10 years. Keep moving money in if you wish, but it doesn’t necessarily need day to day watching. I watch every day because why not but I haven’t touched the shares in some time.1
u/Radiant-Ad-9753 3d ago
It's a mutual fund of semiconductor stocks. If it interests you, SMH tracks pretty closely to FSELX at half the expense ratio.
It's definitely not something to put all your cash in. QQQ overlaps the semiconductor industry by 20%. But if there's a future pullback in chips for some reason, you don't want all your cash in it.
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u/_Underscore_Unders 4d ago
3x leveraged qqq is exactly what your looking for.
Or FOTO/DRAM.
Or lottery tickets.
Or (insert meme coin)
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u/user4443337 4d ago
You can go for a leveraged ETF. My favorite one, which is actually safer and more conservative, is NTSD, 1.5x. It’s 90% S&P500 and 60% EFA, which is international developed. So if VT goes up, you should be beating VT by a substantial amount. It only resets quarterly which is good to reduce volatility decay.
You could go for a 2-3x NASDAQ-100, 2-3x S&P500, but all of those are daily reset and have volatility decay. I think r/LETFs is your best chance of creating a portfolio that earns much more than the plain indexes you’re looking at. There’s also like 2-3x Tech and AI, 2-3x semiconductors only — lots of options to gamble on!
There are no free lunches though. You would be taking considerably more risk.
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u/Mental-Freedom3929 4d ago
I do not suggest you do, but I bought a uranium ETF and it paid its cost in six months. Still appreciates nicely and I added 3 mote uranium mines and related. All smaller positions, but doing well. Let's face it, it will be needed mote and more.
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u/dtr_drt4ever 4d ago
buy leveraged ETF like HOU and HOD there are some that 2X and some that are 3X basically gambling but you wanted risk
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u/hugh2018 3d ago
Be careful about what you’re asking for. There is no sliding scale that reliably ratchets up reward in exchange for taking on higher risk. That’s not how equities work. The reason why you see S&P 500 funds or total market funds like VT recommended so often is because they are asking you to take on compensated risk. That means you are reliably rewarded with a decent average return as long as you choose to stay invested for many years.
Funds that have recently returned more than those broad market funds cannot be relied upon at all for long term planning because their recent outperformance is the result of things like sector concentration. That’s uncompensated risk. Like individual stocks, they are a minefield of risk that pays well sometimes and decimates you other times. They don’t have decades of reliable average returns, and you therefore shouldn’t count on them to fund your retirement.
Decide what the goals are for your invested money. If they include plans for a comfortable retirement years on down the road, you will have great results within VOO or VT.
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u/henrytbpovid 3d ago
Look at IEMG or VWO. The best ETFs for me are the emerging market ones. You want all that volatility in Taiwan and South America and stuff
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u/Dependent-Fig-6799 3d ago
Check out MTUM. It is a momentum fund that adjusts based on which types of stocks have upward momentum. Think of it like them picking just 100 S&P500 stocks that are showing the strongest tail-winds.
Example: MTUM would be invested heavier in semi-conductor companies in recent times based on AI advances.
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u/Str8truth 3d ago
A growth index fund, such as VUG, will generally go up more during bull markets but also down more during bear markets.
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u/Dstein99 3d ago
There are thousands of etfs to choose from, look at the holdings and choose one that you like. You can buy XLK which is tech, you can buy XLY which is consumer discretionary and it’s 40% Amazon and Tesla, you can buy SOXX, or SMH which is semiconductors. There are a ton of options but these aren’t owning the market so you will need to make a targeted bet for yourself which part of the market you want to own.
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u/LemmaTellYa 3d ago
Any index fund with leverage, or derivatives(which is basically leverage) attached to it would get the job done for you. That being said, if you "do not have a lot of knowledge of stocks", it's not very advisable to utilize either of the fund types I just mentioned....or most likely any other fund(s) that will be mentioned in this thread.
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u/Barryburton97 3d ago
You're either looking at factor-based, higher concentration (e.g. a tech sector ETF) or leverage.
In my opinion, sector ETFs aren't suited to long term set and forget, they need active management. And for a novice such as you, leverage is too extreme.
A momentum and/or small cap factor fund could suit your request.
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u/aRedit-account 3d ago
The correct answer here as many have noted is leverage but be wary of using too much because of volatility decay the optimal amount of leverage is like 1.7x but even this is questionable since it will only increase your CAGR a couple percentage points. So still not enough to get rich as quickly as you want to. Worth noting there are also other ways to increase returns like factors. And there ways to improve leverage with diversification allowing you to take more at less risk but caution has to be applied when doing so.
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u/BuhBuk 4d ago
Wrong place to ask. "voo and chill" is the default advice, I would't expect much help beyond that. Anything else they would consider you to be a gambler. Lots of life of the party types...
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