Some people might think that in order to be successful investors, they have to learn how to pick the best individual stocks for their portfolios. Finding a winning stock early in its growth story can be exciting. However, this isn't the only way to find success in the market.
For instance, putting some of your hard-earned savings into the Invesco QQQ Trust (QQQ 0.05%) has also been a winning strategy. If you had invested $1,000 in this top exchange-traded fund (ETF) exactly 10 years ago, here's how much your position would be worth today.
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Hard to argue with the results
Over the past decade, the Invesco QQQ Trust has generated a total return of 510%, so a $1,000 initial position would be worth $6,100 as of this writing. On an annualized basis, that translates to a yearly return of 19.8%. It's impossible to argue with that type of stellar performance.
Those impressive gains can be attributed to some critical factors. Significant inflows of capital into passive investment vehicles like index funds have increased the overall amount of capital in the stock market. The economy was operating in a low-interest-rate environment for many years, and that condition incentivizes risk taking. And of course, numerous tech enterprises have enjoyed monster success and come to dominate many industries.
All of this has propelled the Invesco QQQ Trust upward. The "Magnificent Seven" stocks now represent 44% of the ETF's assets, so it benefits from some powerful secular trends.
What the future could bring
Investors shouldn't assume that any investment will perform the same way going forward as it did in the past. The ETF's future trajectory will depend on a host of conditions that are hard to predict.
It's better to manage your expectations for the fund's returns. Even if the Invesco QQQ Trust doesn't continue to deliver annualized gains of nearly 20% between now and 2035, it can still be a great investment opportunity.
