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I read only yesterday a piece by the American Stock Exchange explaining the NASDAQ 100 Index Trust (AMEXQQQ). I had seen QQQ in the vast Motley Fool materials a few times, but hadn't gotten around to researching it. -and I've been avidly researching things Foolish for about six months now, in depth. (not a very long time, I'll admit)

The QQQ sounded like a good idea and I was going to ask about it on the message boards, when I came across the "Building a Fool Portfolio (parts 1 and 2) by Zeke Ashton (Rule Maker). The most frustrating and possibly the most exciting thing to me about investing is the continuous acquisition of new information. As soon as I think I'm on the right track, I learn something more that brings me up short.

I have an IRA that I can no longer contribute to. I have invested it approximately 30% in Vanguard Index 500, a little under 25% in Foolish Four, a little under 25% in Rule Maker companies, including CSCO, INTC, and MSFT, and 25% in a money fund, waiting for me to decide to leave it there or put part of it into Vanguard short- or mid-term bond Fund. This is pretty conservative, I guess, but I'm not in a position not to be.

My question relates to the article by Zeke Ashton and the QQQ. Would someone in my position be better off investing in the Nasdaq 500 than in individual high-tech stocks, in spite of the fact that they are Rule Maker companies?

One thing that bothers me a lot in my investments is diversification. I feel I am diversified, but doesn't that also depend on how much is invested in each stock? In addition to the FF stocks for 2000 and the Vanguard 500 Index fund, I also have two more Rule Maker stocks. Since this represents all my investments, would I be better off to be in the QQQ fund? (for added diversification). And then if the answer is yes, there is all the complication of how to get there, what with trading losses and capital gains taxes, etc.

Well, it's all a learning process, so any input would be appreciated. Thanks a lot.
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First things first.
If you invest in bond fund. Invest in long term. Yield curve paradym is changing and long term government bond fund is best.
I don't think qqq is a diverification play. It is a mid to high level risk play.
So my answer to you is no you would not be better off in qqq. IN my opinion Rule maker is less of a risk.
But thats one mans opinion. And its free.
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