Nasdaq Correction: Buy This Unstoppable ETF at a Discount

3 months ago 50

Unlock banal picks and a broker-level newsfeed that powers Wall Street.

Katie Brockman, The Motley Fool

Tue, Mar 11, 2025, 5:00 PM 4 min read

The Nasdaq (NASDAQINDEX: ^IXIC) has officially entered correction territory, falling by adjacent to 13% since mid-February, arsenic of this writing. Monday marked the index's worst single-day driblet since 2022, arsenic it plunged by 4% -- fueling concerns astir a looming carnivore marketplace oregon recession.

The aboriginal is inactive uncertain for the market, and cipher knows whether banal prices volition rebound oregon we're headed for a deeper downturn. But implicit the agelong term, it's astir guaranteed that the marketplace volition recover.

Silhouette of a carnivore with banal marketplace clang chart.

Despite galore investors' concerns, close present could beryllium a fantastic accidental to "buy the dip" and put portion prices are lower, perchance mounting yourself up for hefty gains erstwhile the marketplace yet bounces back. If you're looking for a tech ETF to snag astatine a discount, the Vanguard Information Technology ETF (NYSEMKT: VGT) could beryllium a large bargain close now.

The Vanguard Information Technology ETF contains 316 stocks from each corners of the tech sector. With the tech-heavy Nasdaq successful correction territory, galore of the stocks wrong this ETF person besides been deed hard successful caller weeks.

The money itself has dropped by astir 11% since the opening of the year, portion its apical 3 holdings -- Apple, Nvidia, and Microsoft -- person fallen by astir 9%, 20%, and 10%, respectively, successful that period.

Historically, though, this ETF has a beardown past of pulling done unsmooth patches. Since its inception successful 2004, it's survived the Great Recession, the COVID-19 crash, and the astir caller slump passim 2022 -- each portion earning full returns of adjacent to 1,000%.

VGT information by YCharts

In different words, if you'd invested $10,000 successful this ETF successful 2004 and simply stayed successful the market, you'd person astir $108,000 by today.

Of course, past show doesn't foretell aboriginal returns. There are nary guarantees that this ETF volition proceed thriving implicit the coming years oregon that each of the stocks wrong the money volition recover. But by investing successful an ETF, you'll summation vulnerability to hundreds of stocks astatine once. That tin amended diversify your portfolio and bounds your hazard if the marketplace takes a much terrible crook for the worse.

One different vantage of this money is its premix of bluish spot stocks on with smaller companies. Apple, Nvidia, and Microsoft unneurotic marque up conscionable implicit 44% of the full ETF. The different 56%, approximately, consists of the remaining 313 stocks.

Devoting a ample information of the money toward a fistful of stocks tin summation risk, but juggernaut corporations are besides much apt to propulsion done pugnacious economical times. While immoderate smaller corporations whitethorn conflict during a marketplace slump, they besides person much country for explosive maturation erstwhile prices statesman to prime up again.