πππThe Nasdaq 100 quarterly rebalance took effect on September 21. It was dominated by a big mechanical upward adjustment in
$SpaceX(SPCX)$ which saw its index weighting more than double from 1.28% to 2.82%.
This triggered an estimated USD 15.5 billion to USD 22 billion in forced passive buying from index tracking funds like $Invesco QQQ(QQQ)$ .
The big lesson here is that Nasdaq is also compelled to sell small pieces of other stocks to make space for SpaceX.
Stocks like $Microsoft(MSFT)$ faced a minor wave of passive index selling outflows, creating a purely technical artificial dip to accumulate this Tech Giant at a discount.
Nasdaq rebalancing occurs 3 times a year. For small investors like me, I will continue to dollar cost average into $Invesco NASDAQ 100 ETF(QQQM)$ as it will continue its upward momentum over a long term horizon.
@WallStreet_Tiger @Tiger_comments @TigerStars @Tiger_SG
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments