The Nasdaq Is NOT the Stock Market

It's just one index, of many, that is irresponsibly weighted towards a certain type of stock and completely ignores the other ones.

Also see: The World's Best Index

As a reminder, the Nasdaq100 is about 50% Technology.

And just keep in mind that this massive Tech weighting doesn't even include Amazon, Google, Facebook or Tesla, as those companies aren't even considered Technology. They're in the Consumer Discretionary and Communications Sectors.

Furthermore, the Nasdaq100 has a 0% weighting in Financials, 0% weighting in Energy, 0% weighting in Materials, 0% weighting in Industrials and 0% weighting in Real Estate.

Repeat after me: The NASDAQ is NOT the stock market.

And I'll tell you something else that's pretty hilarious. The Nasdaq100 Ex-Technology Index still has infinitely more Tech exposure than Energy and some of those other ignored areas of the market:

So I'll tell you again. If you want a lot of Technology exposure and you want to avoid all those other areas, then perhaps the Nasdaq can be a good vehicle for that specific purpose.

But as a gauge of the US Stock Market?

I couldn't think of a worse index.

Know what you own.

That's the lesson.

Don't forget to check out their fact sheets. They all have them.