When we talk about NASDAQ, we can talk about two different things. NASDAQ is not only an American stock exchange, it is also a well-known index. Because the term NASDAQ refers to two different things, many people do not really understand what the term means. Do you also belong to this group? Then read on, because on this page you can read more about investing in the NASDAQ.
How can you invest in the NASDAQ index?
You can choose to invest directly in the NASDAQ index. In this case, you do not buy shares of a specific company listed on the NASDAQ stock exchange. Instead of buying shares you track the entire stock exchange with a single investment.
The NASDAQ index includes all stocks listed on the NASDAQ stock exchange: This is no less than 3000 stocks. If the shares increase in value together, you make a profit. If the total value of the NASDAQ stocks goes down, you lose money.
The NASDAQ index is very popular among investors. This is because the technology companies that belong to the NASDAQ exchange generally have good profit figures. Moreover, you are not dependent on one company when you invest in the NASDAQ index. If the companies on the stock market are performing well, you can make a profit.
What are the best ways to invest directly in the NASDAQ index?
Active speculation on the NASDAQ's price development
You can choose to actively speculate on the NASDAQ's price development. You can do this by trading a derivative on the famous index. A good party to actively speculate on NASDAQ price movements is Plus500. With CFDs, you can respond to short-term ups and downs on the NASDAQ price. Use the button below to try active speculation on the NASDAQ for free with a demo:
Buying an ETF on the NASDAQ index
Would you rather invest in the long term in the NASDAQ index? Then it may be smart to buy an ETF on the index. An ETF is an index fund that tries to track the index as precisely as possible. When you periodically invest an amount in an ETF on the NASDAQ, you can benefit from long-term price developments. A good broker where you can buy ETFs is DEGIRO. With DEGIRO you pay no transaction costs when you buy & sell ETFs included in the core selection. Use the button to open an account directly with DEGIRO:
How to buy NASDAQ shares?
You can also choose to invest in a few shares listed on NASDAQ. It is then important to carry out sufficient research, as stock prices can rise and fall rapidly. A good broker where you can buy NASDAQ stocks is eToro. At eToro, you do not pay commissions on your share transactions, which allows you to achieve better results with your investments. Use the button below to directly open an account with eToro:
What is NASDAQ?
The abbreviation NASDAQ stands for National Association of Securities Dealers Automated Quotations. This is quite a mouthful and that is why everyone is actually talking about NASDAQ. NASDAQ is an American stock exchange and is mainly known for its technology stocks. The stock exchange has existed since 1971 and has lower admission requirements than many other American stock exchanges. Because of this, you can see that especially many new companies do their IPO on the NASDAQ.
The NASDAQ stock exchange
NASDAQ is an American stock exchange founded in 1971. At the time, it was the first and only electronic exchange in the world. On the NASDAQ, mainly technological shares are traded, i.e. shares of companies with a technological background.
The stock exchange includes ICT companies, but also companies in biotechnology. These are well-known companies in relatively young industries.
What is the NASDAQ index?
The value of NASDAQ has collapsed by more than 80% in the past: this happened after the terrorist attack on the World Trade Centre and the bursting of the Internet bubble. The credit crisis also caused the NASDAQ's share price to fall sharply.
You can also choose to invest in the NASDAQ-100. This index contains only the largest 100 funds listed on the index. By using ETFs, you can invest in this index yourself.
In which stocks can you invest on the NASDAQ stock exchange?
If you want to invest on the NASDAQ stock exchange, you buy one or more shares of a company listed on this stock exchange. These are companies like Facebook, Alphabet (Google), Amazon, Microsoft, Netflix, Apple and so on.
When you buy a Netflix share and this company makes a profit, you benefit as a shareholder. And is your share worth a lot more after a few weeks, months or years? Then you can choose to sell it at a profit.
What is the NASDAQ's current exchange rate?
Are you curious how the NASDAQ's exchange rate is developing? The chart below shows the price at which you can buy or sell a CFD on NASDAQ directly.
Investing in the NASDAQ stock exchange or index?
If you are active as an investor on the NASDAQ stock exchange, you generally invest in one company. If you invest in the index, you indirectly invest money in all companies that are linked to this stock exchange. You can decide for yourself which method you like most.
Would you prefer to invest in one company? Then select this company on the NASDAQ stock exchange. If you prefer to spread your opportunities and risks a bit, then invest in the NASDAQ index. In this case, you are not dependent on one company on the NASDAQ exchange.
You can easily invest in the NASDAQ shares through a so-called broker. Do you want to know with which brokers you can best invest in NASDAQ? Then take a look at our overview of the best brokers:
What are the dangers and risks of investing in NASDAQ?
Many people believe that with an investment in NASDAQ their risks are diversified. For most people it is certainly the case that an investment in NASDAQ is more stable than arbitrarily buying up shares. Nevertheless, it is important to investigate the content of the instrument in which you invest in the NASDAQ.
Within the NASDAQ 100, for example, you can see that the three largest stocks make up a large part of the index. Apple, Amazon and Microsoft determine more than 30 percent of the value of the index. When you add Facebook, Alphabet and Tesla to the list, you already have half of the index. Your risk diversification is therefore in many cases not that great when you invest in NASDAQ. If these shares do not perform well, the return on your investment will almost certainly be disappointing.
It is therefore important to examine carefully which shares are included in an index. Determine the weight of the individual shares: in this way you can determine whether the index helps you to achieve a solid level of risk diversification. If certain shares maintain a dominant position, it is important to at least take a close look at those companies.