Core Insights - Growth investing has undergone significant changes in the last four years, primarily driven by advancements in AI technology [1] Group 1 - The majority of gains in growth investing are now attributed to AI developments [1]

Core Insights - Growth stocks have been a significant driver of market performance, outperforming value stocks in eight of the last ten years, often by substantial margins [2] - The rise of artificial intelligence (AI) is expected to further bolster growth and technology stocks over the next decade [2] Growth Stocks and ETFs - Investing in growth stocks through exchange-traded funds (ETFs) is recommended for new investors, as these stocks typically show faster revenue and profit growth than the overall market [1][3] - Growth ETFs allow for a diversified portfolio of top growth stocks and facilitate a dollar-cost averaging investment strategy [3] Specific ETFs - **Vanguard Growth ETF (VUG)**: - Tracks the growth segment of the S&P 500, with over 60% of its holdings in technology stocks, and top three holdings (Apple, Nvidia, Microsoft) making up about one-third of the portfolio [4] - Achieved an average annual return of 17.5% over the past decade and 32.5% over the last three years, with a 19.4% gain in 2025 [5] - **Invesco QQQ Trust (QQQ)**: - Tracks the tech-heavy Nasdaq-100 index and has outperformed the S&P 500 nearly 88% of the time over the last decade [6] - Recorded a 20.8% gain in 2025 and has a 19.3% average annual return over the last ten years [7] - **Global X Artificial Intelligence & Technology ETF (AIQ)**: - Focuses on AI stocks and includes international stocks, with nearly 70% of its portfolio in U.S. stocks [8] - Achieved a 36.4% average annual return over the past three years and was up 32% in 2025 [10] - **Ark Innovation ETF (ARKK)**: - Actively managed by Cathie Wood, focusing on companies with disruptive technology, though it carries more volatility [11] - Delivered a 35.5% return in 2025 and has had yearly returns of 50% or more three times in the past decade [12]

Core Viewpoint - The Nasdaq 100 experienced a significant decline of nearly 8%, indicating a tech-driven correction that may have impacted growth-heavy investors [1] Group 1 - The decline in the Nasdaq 100 reflects broader market volatility, particularly affecting technology stocks [1]

Market Outlook - The market outlook for the next year is optimistic, driven by favorable economic conditions and a recent 4.2% gain in the S&P 500 over the past week, indicating a potential return of bullish sentiment [1] - The market rally ahead of Thanksgiving was supported by a rebound in technology stocks and increasing expectations of a December Fed rate cut, which has enhanced investor appetite [1][2] S&P 500 Projections - Deutsche Bank projects the S&P 500 index to reach 8,000 by the end of 2026, expecting "mid-teens" returns due to healthy inflows, continued buybacks, and strong earnings [3] - HSBC and JPMorgan have set a target of 7,500 for the S&P 500 in 2026, with JPMorgan suggesting it could reach 8,000 if the Fed implements additional rate cuts next year [4] - Morgan Stanley and Wells Fargo are also optimistic, forecasting the S&P 500 to hit 7,800 by the end of 2026, representing a 14.5% increase from current levels [5] Fed Rate Expectations - Markets are anticipating an 84.7% chance of a rate cut in the December Fed meeting, reflecting a significant improvement in sentiment compared to the previous week [6] - If Kevin Hassett becomes the new Fed chair, interest rates may decline further, creating a supportive environment for equities and contributing to the bullish outlook for the S&P 500 by 2026 [6] Investment Opportunities - Investors are encouraged to adopt a long-term perspective and consider various ETF options that may benefit from the anticipated interest rate cuts [7] - S&P 500 ETFs, such as Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF Trust (SPY), and iShares Core S&P 500 ETF (IVV), are highlighted for their potential to offer attractive opportunities and diversification [8] - Equal-weighted ETFs, like Invesco S&P 500 Equal Weight ETF (RSP) and ALPS Equal Sector Weight ETF (EQL), provide balanced exposure and lower risk profiles, making them suitable for investors seeking diversified sector exposure [9][10] - Growth ETFs, including Vanguard Growth ETF (VUG) and iShares Russell 1000 Growth ETF (IWF), are recommended for those willing to take on more risk to capitalize on a positive economic outlook [11] - Small-cap ETFs, such as iShares Core S&P Small-Cap ETF (IJR) and Vanguard Small Cap ETF (VB), are expected to perform well following Fed rate cuts, benefiting from lower borrowing costs and increased capital availability [12][13]