The U.S. is a prosperous nation that offers many opportunities for those who live there. But an ongoing retirement crisis threatens to leave millions unable to keep up with the ever-increasing living costs.
The average (median) American household has just $87,000 saved for retirement today, according to research by The Motley Fool. Considering the average household income in the U.S. is $74,580 per the U.S. Census Bureau, these nest eggs can barely cover a year of family wages.
But there is something everyone can do to improve their outlook: investing. Putting your hard-earned money to work in the U.S. stock market will let the American economy work for you, not just you for it.
Not sure how to take advantage? Here is a stock that can help you do just that.
Big technology rules Wall Street
For much of the past decade, America's largest technology companies have been the beating heart of the U.S. stock market. Often referred to as the "Magnificent Seven," these stocks include:
- Apple
- Amazon
- Alphabet (Google)
- Meta Platforms (Facebook)
- Microsoft
- Nvidia
- Tesla
You can see how each of these has grown dramatically faster than the broader stock market, represented by the S&P 500. While past results don't promise future returns, these companies are among the world's largest and most deep-pocketed, and all dominate what they do. Of course, you should diversify your investments, but these are a great starting point.
AAPL Total Return Price data by YCharts
Most people don't want to spend the time and mental effort to juggle which of these stocks to buy at any given time. So you can consider buying shares in the Invesco QQQ Trust (QQQ +0.76%) instead.
Investing in big technology stocks -- made simple
The Invesco QQQ is an exchange-traded fund (ETF), a basket of individual companies lumped together and traded under one stock symbol. One share of the QQQ gives you exposure to all the stocks that make up the fund.
Specifically, the QQQ fund holds 101 stocks, and 57% of the fund is focused on technology companies. The fund's top 10 holdings are littered with Magnificent Seven names, totaling 43% of the fund. In other words, you can ride these tremendous companies by buying one ticker, which comes with diversification to other companies as a bonus. Costco Wholesale and Broadcom also appear in the fund's top 10 list.
NASDAQ: QQQ
Key Data Points
You can see above that the Invesco QQQ has handily outperformed the S&P 500. Of course, we can't know whether or how long that will continue. ETFs change over time and will rebalance. The only cost to owning the Invesco QQQ is an expense ratio, a percentage paid to the fund managers to compensate them for managing everything. The Invesco QQQ's expense ratio is 0.20%.
How to take action
As with all stocks, they will go up and down over time. You shouldn't just plunge your money into the Invesco QQQ or any other investment. Instead, consider buying a little at a time, a dollar-cost averaging strategy. It will ensure you're never buying at the top or bottom, but it will average out over time.
Think about where you're buying and holding stocks like the Invesco QQQ. A Roth IRA can be a great retirement tool because it could save you from paying taxes in retirement.
Whatever the case, the statistics show that you may benefit from sitting down and thinking about how you're building your financial future. The sooner you take action, the more time compounding will have to do its magic for you. If you want to juice up your retirement savings, the Invesco QQQ can do that as part of a diversified retirement strategy.
