1 Unstoppable ETF That Can Turn $350 Per Month Into Over $1 Million #NewsETFs

A great habit for investors to get into is to put money into the stock market every month. By creating this habit, it can eliminate the temptation to try to time the market and worry about when’s the best time to invest. And making it part of your budget and plans every month can increase the likelihood that you’ll stick with it.

If you’re able to set aside $350 each month to invest in an exchange-traded fund (ETF), then that might be sufficient to grow your portfolio to more than $1 million over the long term. Even though the stock market has been doing well and valuations may be high, I’ll show you how that can be possible amid a more conservative annual growth rate.

An ETF that you can feel comfortable investing in every month

If you’re putting money into the stock market every month, it’s important to have stocks or ETFs that you feel comfortable with, which effectively become your go-to options. Taking some of the decision-making out of the process so it’s as routine and automatic as practicable will make it easier to follow it and stay on track.

A top ETF that can be a great option for all long-term investors is the Invesco QQQ Trust (QQQ 1.57%). Since the fund tracks the top 100 nonfinancial stocks on the Nasdaq index, it takes the guesswork out of determining which are the best growth stocks to buy. And by focusing on the largest companies, it means you also aren’t taking on a big risk by investing in unprofitable businesses or ones with shaky business models. Targeting smaller growth stocks can lead to better returns, but it also exposes you to much more risk.

The largest holdings in the ETF are names that investors will likely be extremely familiar with, including Tesla, Nvidia, Meta Platformsand other big tech stocks. The fund also charges a relatively modest annual expense ratio of 0.20%.

What your portfolio’s value may look like over the years

During the past 10 years, the Invesco QQQ Trust has generated total returns (which include reinvested dividends) of 420% versus 241% for the S&P 500 index. That averages out to a compounded annual growth rate of 17.9%.

QQQ Total Return Level data by YCharts

The problem is that such a high growth rate may not persist for the long term, especially with the markets being as bullish as they are right now. The S&P 500 index, for example, has averaged an annual return of about 10% over the long run. To be a bit more conservative, let’s assume that the fund will grow at a more modest rate of 9%, which can result in more realistic expectations. And if the returns end up being higher, then that means your balance will also be better than projected.

Here’s what a $350 monthly investment growing at 9% annually could look like over the years.

Calculations by author.

Under these assumptions, it would take about 35 years for monthly investments of $350 to eventually grow to a value of more than $1 million. But if the returns end up being higher than that or if you can afford to invest some extra money over the years, that can accelerate these gains; this is just an outline of what the portfolio’s balance might look like.

Setting realistic expectations can ensure you don’t end up being disappointed

By using more modest growth rates in your assumptions, you can increase the odds of success in your long-term investing plans. If you’re on track to reach your goals at a modest growth rate, then you could blow past them if the rate ends up being higher. And more importantly, you’re less likely to miss those goals by being too optimistic about your future returns.

But by staying committed to the strategy and putting aside money every month into safe long-term investments such as the Invesco QQQ Trust, you can ensure you’re likely to come out much further ahead than if you didn’t follow that strategy.