Comparison of VOO, SCHD, and QQQ ETFs' Performance

QQQ outperforms VOO and SCHD in 10 years, yielding 17% CAGR, suggesting long-term holding and diversification.

### QQQ Outperforms VOO and SCHD: A 10-Year Comparison
* 📊 James compares the historical performance of three ETFs: **VOO (S&P 500)**, **SCHD (US 100 Dividend Equity)**, and **QQQ (Nasdaq 100)**.
* 📈 Using Portfolio Visualizer, QQQ has a 10-year CAGR of **17%**, outperforming VOO (**13.11%**) and SCHD (**13.53%**).
* 💰 In a 10-year scenario with $40,000 initial deposit and $500 monthly contribution, QQQ reaches **$352,000** while SCHD reaches **$263,000**.
* 💼 Increasing the monthly contribution to **$3,000**, QQQ can reach a **million-dollar portfolio** in **10 years**.
* 💡 James advises long-term holding and diversification due to QQQ's volatility: "You don't know when **QQQ is going up and when QQQ is going down**."
* 🔗 Access to the **compound interest calculator** and other tools is available on James's Patreon.
* 📉 The video emphasizes the importance of **diversification and long-term investing**, especially with high-growth but volatile assets like **QQQ**.

hey guys, it's James back with another video. In response to a comment that I got on one of my more recent videos with TJ asking, Did I do the fastest route to one million dollars: VOO versus SCHD versus QQQ? So here we are, we're going to be doing a comparison of these three separate ETFs. In more specific terms, VOO is an ETF that follows the S&P 500 index, SCHD follows the US 100 dividend equity index, and QQQ follows the Nasdaq 100 index. First up, we're going to do a historical comparison or a backtest on a website I like very much called Portfolio Visualizer. We're going to find out which one of these three separate ETFs outperforms the other two. Then we're gonna come over to my compound interest comparison calculator. We're gonna put in the top two ETFs and compare them side by side, take their dividend yields, their expense ratios, and then play around with contribution and growth numbers. We're going to play around with the monthly

edition number put in their cagger numbers. Reinvest the dividends and then put down an initial deposit for someone who would be around 30 years old. And then we'll do a speed test. We'll play around with that monthly edition number. Increase the monthly edition to see how fast we can reach a million-dollar portfolio in about 10 years. And then I'll round it out with some investing advice. Because when you see at something like this where one of these three ETFs extremely outperforms the other two, there is some precautions to be had. So with that let's go ahead and dive in and take a look at a little closer look at VOO, SCHT, and QQQ over on Seeking Alpha. VOO currently is sitting at 378. It is Vanguard's S&P 500 ETF. We're going to use a couple of these numbers right here. We're going to use the expense ratio at 0.03 percent. We're going to use the dividend yield trail 12-month trailing yield number at 1.51 percent. Take a look.

at that and then we're going to compare schd it is swab strategic trust or swabs us 100 dividend equity etf its expense ratio is 0.06 and its yield is sitting around 3.29 percent and then last but not least we have qqq it is invesco's nasdaq 100 etf tracks the nasdaq 100 the expense ratio is 0.2 percent and the 12-month trailing yield is 0.60 percent so we'll use those numbers later on in the video now that we have the three ets defined we'll come over to portfolio visualizer and compare each of these three different etfs over the time over the last about 10 years we'll do a month-to-month comparison we'll start in 1985 but the data will not go back to 1985 it will only go back as far back as the most recent funds inception date which is around 2011 2012. we're going to come all the way up to the current month and year of july

2022. We're going to simply start with $10,000. This doesn't really matter, but what we're looking for is the overall CAGR numbers or the overall growth of these three ETFs. We're gonna have no cash flows. We won't. This doesn't really matter rebalancing as we are doing a 100 percent comparison of VO versus SCHD versus QQQ in three separate portfolios. We're not going to do any any leveraging. We're going to go ahead and see what it looks like with reinvesting the dividends, and then we'll display the income at the bottom of the page. So with all those inputted into the calculator, let's take a look at which one of the three severely outperformed the other two. And when it comes down to it over the course of about 10 years, we can see that QQQ has outperformed VO and SCHD. Take a closer look at QQQ right here on the bottom. You can see its cumulative annual growth rate is about 17% per year on average over the last 10

years, where some years it was a lot higher than 17, and some years it was a lot lower than 17. And then SCHD and VOO are very close to each other at 13.53 for SCHD and 13.11 for VOO. Let's take a quick look at the best year 48 for QQQ and 32 for VOO and SCHD. And then you can see negative 30, about negative 20, and negative 10 for their worst years. But if you would have invested ten thousand dollars starting around October of 2011, this is what you could expect to have received over the course of close to about 10 to 11 years, with QQQ coming out on top. So, that is our historical comparison backtest. We can see that QQQ completely outperformed. So, let's take a look at what it would look like in the future if these the top two funds, SCHD and QQQ, performed like they did in the past with our compound interest comparison calculator. Let's go ahead and put

in the ticker symbols. Now, I know that this calculator can be fairly overwhelming if it's the first time you've seen it, so real quick, the yellow are the inputs, and the green are the outputs. And you can download this calculator over on my Patreon if you would like to play around with these numbers as I go through this calculator. And you're interested and you want to put in your own ticker symbols and determine what your portfolio would look like in 10 years, what type of income you could receive, what it would look like in 10, 20, 30, or 40 years for your fund number one and fund number two, and then how much dividends you could expect to receive for a portfolio size of a different security. And then down here in dividends per month and dividends per year if we had accurate dividend yield numbers in here, which I'm going to do that real quick with QQQ's dividend number being about 0.6 and SCHD's being 3.29. If you recall, we got these numbers from

seeking alpha. How much dividends per month, or how much dividends per year, would we expect to receive if we held this much of Fund One and Fund Two? So that's not the point of this video. Back here, over to our inputs. Let's go ahead and put the expense ratio in for QQQ and SCHD. We're looking at 0.2 percent for QQQ and 0.06 percent for SCHD. Let's take a stab at their cumulative annual growth rate. If you recall over on the Portfolio Visualizer, the QQQ's cumulative annual growth rate was around 15-16-17, and SCHD was around 13. Now, I do have some CAGR numbers calculated for the one, two, three, five, and ten here, and there could be a little discrepancy between my numbers and Portfolio Visualizer's. Portfolio Visualizer goes to the end of the most previous calendar month, which would be June, and we are somewhere at the end of July right now. So, my numbers are a little bit

different than theirs. We'll go ahead and do a comparison of what the 10-year KAGGER numbers would look like 10 years in the future. QQQ performed like it did in the past, so let's put in 17.15 and then put in 10.10 for SCHD. Let's go ahead and reinvest the dividends. And then for the average 30-year-old, you're gonna have about forty thousand dollars in their retirement portfolios. So let's go ahead and start with a base of forty thousand dollars. The average contribution to portfolios is going to be somewhere between zero and five hundred dollars a month. So let's go ahead and put in five hundred dollars a month. And what does that give us? You can see with a 500 a month edition and a 40,000 initial deposit, QQQ is going to give us 352,000 in 10 years and SCHD is going to give us 263,000 in 10 years. And then if we take a look at our long

term graph over the course of 20, 30, and 40 years. This is what we could expect with dividends reinvested here in this column and dividends not reinvested in this column. And then for fund number two, SCHD, this is what it would look like with 10, 20, 30, and 40 years of being in the stock market at your $500 a month contribution starting at $40,000. You can expect to have this much with dividends reinvested and not reinvested. Let's say you had a target for dividends per year. You wanted to achieve $1,000 in annual dividends, $10,000 a year in dividends, or $50,000 a year in dividends. This is how much of QQQ you would need and this is how much of SCHD you would need. So the next part of our video, we're going to take a look at how fast we can get to a million dollars or how fast we can achieve a million-dollar portfolio in 10 years.

with QQQ and SCHD. So, all we're going to do is go ahead and change this monthly contribution. So, let's go ahead and multiply our monthly edition by three times. If we added fifteen hundred dollars a month, it looks like it would not get us to that million-dollar figure in 10 years. We would have to go even higher. Let's take a look at what it would look like if we added three thousand dollars a month. And it looks like for QQQ, we could reach that figure in about with about three thousand dollars a month in ten years. And let's see SCHD would be a little bit behind. This is the type of income you could expect to receive from QQQ and SCHD. Now remember, QQQ only has that point six zero percent dividend yield and SCHD has that three point two nine percent dividend yield. So, you would be expecting more SC dividend from SCHD. And then last but not least, I know it QQQ does look very inviting if you were to take a

look at this historical comparison. You might be thinking, well, why would I just not go ahead and put everything in QQQ? Because QQQ has outperformed the S&P 500 and the US 100 Dividend Equity Index. Why would I not put everything in QQQ? Well, if you recall, you take a look at their best year and their worst year. Well, here's the problem. You don't know how when QQQ is going up and when QQQ is going down. So, when it comes down to it, the best investing advice that I can give is hold long term and diversify. I know some people or a lot of people that obviously you would like to buy low and sell high, but here's the problem with QQQ. Let's take a look. Let's say you see that QQQ is starting to extremely outpace the other two indices. Well, the problem is you start. You buy when QQQ is high, and then all of a sudden QQQ drops faster as you see here in the worst year versus the best year when.

markets go down. QQQ is going to go down a lot faster than the other indexes. So the problem is, you start to panic, and then you panic sell, and then you sell low, and then you see that QQQ starts to go up again. So then you buy when QQQ is high, and then you start to panic. As you can see here, over the course of the entire year of 2022, QQQ has drastically fallen at a lot faster rate than the other two indexes. And then if you panic and you sell, then you lose on probably pretty much all of the gains that you gained from when you first invested in QQQ. So the two best investing advices, pieces of advice that I can give is buy and hold for the long term, and then diversify your investments. If you guys want access to this compound interest formula calculator, head over to Patreon. You can download the calculator along with this calculator. When you purchase a subscription on Patreon, you're going to get my dividend tracker portfolio spreadsheet where I have the valuation.

for separate securities discounted cash flow model, dividend discount model, and grams model. And then also a simple budgeting tracker to determine this value. Right here, how much money you can have left over in your budget, taking into account all of your expenses and all of your income. So with that, head down in the comments, let me know what you thought, and thanks for watching.

3 Best ETFs For Long-Term Investments || #1 Is Shockingly Good

Jim The Producer

James compares the historical performance of VOO, SCHD, and QQQ using Portfolio Visualizer to see which one outperforms the others.

He then uses a compound interest calculator to compare the top two ETFs, taking into account their dividend yields, expense ratios, and growth numbers.

James also plans to give investing advice based on the comparison results and the precautions to take when one ETF outperforms the others.

Comparison of ETF Growth: QQQ Outperforms SCHD and VOO

QQQ has shown the highest average annual growth rate of about 17% over the last 10 years, outperforming SCHD and VOO.

SCHD and VOO have similar, slightly lower CAGR at 13.

QQQ also had the best performing year at 48%, while SCHD and VOO peaked at 32%.

Despite fluctuations, QQQ consistently outperformed, making it a favorable choice for investment.

Projected Dividends and Growth for Fund One and Fund Two

The video discusses the expense ratio for QQQ and SCHD, their cumulative annual growth rate, and the projected portfolio values for a 30-year-old with monthly contributions.

QQQ is projected to reach $352,000 and SCHD to reach $263,000 in 10 years with a $500 monthly contribution.

It also provides the amount of each fund needed to achieve annual dividends of $1,000, $10,000, and $50,000.

The video's next focus is on achieving a million-dollar portfolio in 10 years.

Adjusting Monthly Contributions for QQQ and SCHD

Changing the monthly contribution to three times the current amount would not reach a million-dollar figure in 10 years.

A monthly addition of $3000 could help reach that goal with QQQ slightly outperforming SCHD.

QQQ has outperformed the S&P 500 and the US 100 Dividend Equity Index, but the best investing advice is to hold long term and diversify to avoid the problem of buying high and selling low with QQQ.

The Impact of Market Panic on QQQ Investment

QQQ tends to decline faster than other indexes during market downturns, leading to panic selling and buying at low and high points.

This behavior results in significant loss of gains for investors.

The two key investing pieces of advice are to buy and hold for the long term, and to diversify investments for a more stable portfolio.