This index fund has soared in popularity amongst ASX investors in recent years, thanks to its future-facing composition and tech-heavy exposure.

As my Fool colleague Bronwyn reported late last month, NDQ is one of the most sought-after ASX ETFs on our market. It is currently the seventh-most popular fund by funds under management. We also recently covered how NDQ was the fourth most-bought fund for customers using the Stake brokerage platform over the second half of the 2025 financial year.

The Betashares Nasdaq 100 ETF is a relatively simple index fund, covering the largest non-financial stocks listed on the US' Nasdaq stock exchange. The Nasdaq is known for housing most of America's best-known tech stocks. That includes all of the famous 'Magnificent 7', as well as companies like Airbnb, Netflix, Adobe and PayPal.

It's not just a tech ETF, though. Some other names that can be found in NDQ's holdings include Starbucks, Pepsico, Monster Beverage and Cadbury-owner Mondelez International.

But let's get down to the numbers.

How much would $10,000 invested in the NDQ ETF in 2020 be worth today?

Five years ago, on 5 November 2020, NDQ's ASX units were being priced at $27.59 each. Today, at the time of writing anyway, those same units are worth $57.85 each. That's a gain worth 110%. Or approximately 15.95% per annum.

Not bad. This means investors would have more than doubled their capital investment alone, with that $10,000 turning into $20,968 or so today. Most of these gains came from simple stock price appreciation. However, some would also have come from currency returns too.

Although NDQ is an ASX-listed ETF, its portfolio is priced in US dollars. That means that its returns need to be converted from US dollars to Australian dollars before we can assess them. The Australian dollar is almost 10% lower today against the greenback than it was five years ago. As a result, his would have provided our returns with an additional (and meaningful) boost.

However, that's not where the story ends. As Betashares NASDAQ 100 ETF investors would know, this fund also pays out periodic dividend distributions.

Since late 2020 and today, investors have enjoyed around $4.32 in dividend distributions per NDQ unit. That would see our investor bank another $1,636 in returns over the five-year period.

As such, we can conclude that a $10,000 investment in the ASX's NDQ ETF would be worth a total of roughly $22,603.50 right now. Again, not bad.

The post $10,000 invested in the NDQ ETF 5 years ago is now worth… appeared first on The Motley Fool Australia.

January 2025 was a bullish month for many Nasdaq-listed names. But that wasn't the case for all of them.

While the Nasdaq-100 index advanced 2.2% in January, a handful of its constituents (including a market favourite) lost quite a bit of ground. Here they are, from least bad to worst:

• Monster Beverage (NASDAQ: MNST): Down 7.3%
• Comcast (NASDAQ: CMCSA): Down 10.3%
• Nvidia (NASDAQ: NVDA): Down 10.6%
• Electronic Arts (NASDAQ: EA): Down 16%
• On Semiconductor (NASDAQ: ON): Down 17%

Not every one of these stumbles has a specific catalyst. Monster Beverage, for example, mostly continued to peel back from an overheated rally that peaked in November 2024.

Other setbacks have clear causes, though. For instance, Nvidia shares were upended by the recent introduction of DeepSeek's AI platform, which reportedly provides a range of artificial intelligence solutions without the need for the number of processors typically required for comparable results. If this new approach to AI becomes the norm, Nvidia's AI processor business may not have as bright a future as once anticipated.

Comcast's stock fell in response to a drop in last quarter's broadband customers, while Electronic Arts shares crashed after it lowered its full-year revenue forecast thanks to tepid demand for its latest soccer video game title.

As for On Semiconductor -- last month's biggest Nasdaq-100 loser -- shares were already lagging headed into the new year, but this sell-off accelerated after a Truist analyst downgraded the stock from a buy to a hold on concerns of weak demand.

Just don't jump to sweeping conclusions

Now what? Obviously, market-defying sell-offs are alarming. They are also warning signs of bigger potential problems ahead. Don't take these warnings lightly.

Not all extreme pullbacks are red flags, however. Sometimes they're opportunities to step into compelling stocks at a discount. Indeed, whereas Comcast is currently surrounded by too many questions to merit owning at this time, every other stock on this list at least has a shot at dishing out longer-term upside from their present prices.

Just bear in mind that there may still be some lingering bearish volatility left to wring out.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post These were the 5 worst-performing stocks in the Nasdaq-100 in January 2025 appeared first on The Motley Fool Australia.

"The more stuffed the mind is with knowledge, the less one can see what's in front of him" – Lao Tzu

How good are your powers of observation? Watch the below video, and count how many passes the team in white makes?

How did you do?

The video catches a lot of us out because it uses our own attention against us. The analytical side of our brain is constantly whirring away, working on the latest task we've given it. When we tell it to count the passes, it springs in to action, ruthlessly focusing our attention on our latest goal. But by doing so we can completely miss what is hiding in plain sight. Even when it's a moon-walking bear!

This simple video is a perfect parallel to the challenge we face as investors. To find the truly great opportunities that the rest of the market is missing, we need to quiet our analytical mind, and simply observe the world as it is. Business schools place a big premium on things that can be quantified and analysed in a spreadsheet, but often the most profitable investing insights come from just reflecting on the world around us.

In The Tao-Jones Averages, author Bennett Goodspeed makes a strong case that we must learn to tap in to our creative and intuitive side to be able to stay alert to investment opportunities (and threats!) before the rest of the market:

"analysts are prone to be surprised by developments outside their focus, just as, say, the Swiss watch industry was unprepared for developments in the semiconductor field"

Goodspeed's book provides dozens of examples of how the power of observation can lead to surprising investment insights. A classic case was that of Jim Rogers, co-founder of the market-trouncing Soros Fund.

In 1973, Rogers was reading the newspaper and became puzzled by the outcome of air battles during the Six-Day War between Egypt and Israel. Always in tune with oddities in the world around him, Rogers noticed that the Israelis, who had better trained pilots and superior aircraft (supplied by the U.S.), were losing the air war to an Egyptian air force that, on paper at least, should have been vastly inferior. Most analysts at this point would dismiss the thought and head back to their trading terminals.

But Rogers was always on the lookout for pieces of information that didn't fit with his model of the world and just couldn't let it go.  Rogers inferred that, with inferior aircraft and training, Egypt's success in the air battles must be the result of superior "smart" electronic weaponry such as guided missiles. Fascinated by the insight, he dug deeper, reviewing defence spending, interviewing pentagon officials, and even contacting Senator's to get their take.

At the time, U.S. companies that designed "smart" electronic weaponry were deeply out of favour, after years of under-investment from the pentagon. At the time even Lockheed Martin (NYSE:LMT) was rumoured to be going bankrupt. But Rogers' observation and research led him to realise that a vast wave of future investment was coming and so he bought large positions in several electronic weaponry system designers.

Over the next decade the shares Rogers purchased exploded in value with returns of 2,000 to 5,000 per cent, and Lockheed became a "blue chip" share at the top of every fund manager's buy list.

During the decade Rogers worked with George Soros, their fund generated a cumulative return for investors of a whopping 4,200%. As for Rogers, a handful of astute observations such as these was all it took to make him a multi-millionaire, before deciding he'd had enough and retiring at just thirty-seven.

At Pro we are always on the lookout, trying to catch the next 800-pound Gorilla that's still hiding in plain sight. As we introduced in How to Catch a Monster, over the past 21 years, shares in energy drinks maker Monster Beverage (NASDAQ:MNST) have soared a mind-numbing 2,400-fold. Every $10,000 investment in 1994 would be worth over $24 million today. During those early years, think of all the thousands of Wall St analysts that could have seen Monster Beverage cans taking over their local store, or being guzzled all around them, and yet never took the time to look up from their spreadsheets to capitalise on the opportunity right in front of them.

From time to time we all need to take some time out, give our analytical brains a break, and just observe the world as it is. Whether it's chatting to friends and family around the barbeque, or relaxing on holiday in some exotic location, let's keep our eyes open. The next shareholder-return-Gorilla could be moon-walking right in front of us.

The post Take The 'Investor Observation' Test appeared first on The Motley Fool Australia.

To make money in stocks you must have "the vision to see them, the courage to buy them and the patience to hold them." Patience is the rarest of the three. – Thomas Phelps (original quote: George F. Baker)

Do you have what it takes to catch a monster?

Thomas Phelps wrote one of the all-time great investing books titled '100 to 1 in the stock market' after studying companies that had returned 100-fold or more to investors over the previous few decades (investing trivia bonus point: the legendary Chuck Akre names Phelp's book as core to his philosophy).

These 100-to-1 businesses were so incredibly successful that if you had invested just $10,000 in one of them, it would have turned in to a $1,000,000 fortune over time. Phelps found 365 companies that reached the prized 100-to-1 level or higher, and among those incredible winners he found four common attributes.

First, they almost all started out small – giving them a lot of room for future growth. Second, they were relatively unknown at the outset – less analyst coverage meant lower starting prices. Third, they almost all had a unique product or competitive advantage – something which gave them an edge over other firms. Fourth, the companies were headed by smart, research-minded management teams.

In Phelps view though, more important than what made the companies special, is what made the investors who hung on special. The shareholders that, despite all the noise, and despite all the emotion, were patient enough to hold on throughout the share market's volatility to reach that prized 100-fold return. These were investors that managed to master their inner monkey brain.

Let's look at what it would have taken to hold on to a modern version one of these mega-winners as detailed in '100 Baggers' by Christopher Mayer.

Over the 21 years through last October the shares of Monster Beverage (NASDAQ:MNST)— the beverage company best known for its large cans of Monster brand energy drinks — increased in value by a mind-numbing 2,400-fold. That is almost too big of a number to wrap our heads around, so let's put it like this: for every $10,000 investment in 1994, shareholders that held on would be sitting on $24,121,512.

In 1994 that $10,000 might have bought them a decent second-hand car, after investing in Monster Beverage it would buy them a helicopter to go with their cliff-top mansion.

How did Monster Beverage do it? The company started off very small and was overlooked by Wall St for a surprisingly long time. Monster also invested heavily in marketing and innovated in product, being one of the first companies to recognise the demand for a larger energy drink can (a part of the market that red-bull had neglected). The management team were also incredibly savvy, building a capital-light business model that allowed them to iterate and scale quickly.

The biggest question though, is how did the investors do it? Think of all the times a shareholder had to resist selling if they wanted to reap those 2,400-to-1 long-term gains. Even assuming they could resist selling somewhere along the line for a gain of 40%, 400%, or even 4,000%(!), they also needed to deal with all the volatility that came along with the ride.

During Monster Beverage's run there were 10 separate times where its share price fell more than 25%. Even worse, in three different months Monster Beverage's shares lost more than 40% of their value. Think of the courage it took to hold on to your huge winner when the shares fall by 40% – in a month!

Returns of the kind that Monster Beverage reported are extremely rare. But the lessons of such mega-winners apply to all great long-term investments. To catch a monster, we need the vision to find, the courage to buy, and the patience to hold. Patience is often the toughest of the three.

The post How to Catch a Monster appeared first on The Motley Fool Australia.