Key insights
- The author argues that even with a .com-size bubble burst, consistent investing (dollar-cost averaging) in QQQ can still yield substantial returns over the long term. While a crash would initially hurt, continued investment during the recovery period significantly boosts overall gains. However, the analysis lacks consideration for opportunity cost and alternative investment strategies, limiting its bullish implications.
Its March 10th 2000, you have major FOMO and decide to finally enter the stock market. You throw $10,000 into QQQ as a starting point hoping for major gains. Without DRIP or contributions, it would take you 15 years to break even from that crash. With DRIP, you'd make a mere 10%.
But instead, lets say you stuck to the plan and even after watching that nasty 80% drop, you kept investing $500 every month. In that same 15 year time span, with DRIP, you'd end with $264,000. That comes out to about 154% gain on the total investment. Its good but not great.
Keep doing that from 2015 to 2026, and now its worth $1.9 million (over 1000% gain on your vested money).