Why I invest in QQQ and hold AMZN

Half my portfolio is the boring answer — FZROX and FZILX, bought automatically, never touched. This article is about the other part, and I want to be upfront that it's the part I'd have the hardest time defending to someone who asked me for advice rather than for what I do.

QQQ. It tracks the Nasdaq-100: the largest non-financial companies on the Nasdaq, which in practice means a portfolio weighted heavily toward large technology firms. I hold it because the businesses I understand best are in it, and because I'm willing to be more exposed to software and semiconductors than the whole-market average.

That last sentence is the entire argument, and it's worth being clear that it isn't a valuation argument. I'm not claiming these companies are cheap. I'm saying I want more of them than the market's default weighting gives me, which is a preference, not an edge.

The honest cost: QQQ overlaps enormously with the total-market fund I already own. The largest US technology companies are already the largest holdings in FZROX. Adding QQQ doesn't buy me new companies — it buys me more of the same companies. Concentration, not diversification. Anyone doing this should know that's what they're getting, because the fund's name doesn't say it.

There's also a version of this that's cheaper. QQQ has an expense ratio of 0.20%, which is roughly twenty times what a broad index fund costs, and QQQM tracks the same index for less. QQQ has more trading volume, which matters if you're trading it, and I'm not. That's a fair thing to hold against my own position.

AMZN. A single company, roughly 10% of my portfolio. I've held it a long time, I've read the annual reports, and I have an actual thesis: the retail business is the visible part, and AWS is where the profit comes from. I'm comfortable owning it in a size where being wrong would hurt without being ruinous.

That sizing is the only part of this I'd defend as a general principle. A single company can go to zero for reasons that have nothing to do with how carefully you read its filings — a regulator, a lawsuit, a technology shift, a chief executive making one bad call. The question isn't whether you're right. It's what happens to you if you aren't.

So the rule I hold myself to: no single position large enough that losing all of it would change my plans. Not my retirement date, not my emergency fund, not what I can afford next year. If a position grows past that, I trim it back. That's the only discipline making the rest of this defensible.

Why not just hold the index and stop? Honestly: because I'd be more tempted to do something stupid. Having a bounded amount of conviction money means the rest stays on autopilot, and the autopilot part is where nearly all the actual returns come from. A 20% allocation I'm allowed to have opinions about is what keeps me from having opinions about the other 80%.

If you're deciding whether to do something similar, the order matters. This is what I do *after* the match, the emergency fund, the high-interest debt, and a broad core — not instead of them. The boring version of this portfolio would have done nearly as well, with less to think about. That's not modesty; the odds genuinely favour the index.