No. of Recommendations: 8
If there is a concern that a person does not want a large concentration in a stock, then a lower return may be acceptable.
For the sake of completeness, I would add this possibility:
If there is a concern that a person does not want a large concentration in a stock, then a HIGHER return may be acceptable.
Again, think of QQQ as "QQQE plus or minus a huge random number for how a tiny number of specific super-cap stocks are doing in the markets".
Emphasis on "or minus". Both outcomes are possible.
Some might who believe the very largest stocks in the US market will forever be outperformers. Fair enough, but they should have a good reason to believe that.
If they do, it won't be based on the statistics from deep history. e.g., an equally weighted portfolio of the 5 largest market cap stocks in the S&P 500 underperformed the S&P 500 by about -3.6%/year 1997-2016 inclusive. That's enough for me not to want to overweight them because of that factor. Note the other thread today on somebody wanting to short some of them.
Jim
