GET IN EARLY! My Top 4 AI Investments To Get Rich in 2025

Introduction to Getting Rich Without Getting Lucky

If you’re looking to build wealth without relying on luck, you’re in the right place. In this article, we’ll explore four simple investments that can help you achieve your financial goals. These investments are designed to work together to provide a solid foundation for your portfolio and maximize your returns.

Table of Contents

1. Understanding the Funds
1.1. The S&P 500 Momentum ETF (SPMO)
1.2. The NASDAQ 100 (QQQ)
1.3. Roundhill’s Generative AI Technology ETF (CHAT)
1.4. VanEck Semiconductor ETF (SMH)
2. Putting it All Together
3. Conclusion

Understanding the Funds

Before we dive into the individual funds, let’s take a look at the table below, which shows the four funds we’ll be covering: SPMO, QQQ, CHAT, and SMH. The weights assigned to each fund are based on how their holdings overlap to provide the most exposure to the best AI stocks while managing risk.

The S&P 500 Momentum ETF (SPMO)

The S&P 500 Momentum ETF is often misunderstood due to its name. It doesn’t track the S&P 500; instead, it holds the 100 stocks in the S&P 500 with the highest momentum score, which is calculated by dividing the stock’s 12-month change in price by its volatility. The momentum score is then multiplied by the company’s market cap to determine the final weightings for the fund.

This fund provides several benefits, including:

• Only rebalanced twice a year, allowing winners to ride longer
• Diversifies the way funds are managed, using a momentum score metric
• Manages its own risks, as stocks with high volatility receive a lower momentum score

The NASDAQ 100 (QQQ)

The NASDAQ 100 tracks the 100 largest non-financial companies listed on the NASDAQ exchange, focusing on tech, communications, and consumer platforms that benefit from the AI boom. This fund includes companies like Arm Holdings and ASML, which are not part of the S&P 500.

The NASDAQ 100 is rebalanced quarterly by market cap, ensuring that bigger and more stable companies remain near the top. This fund works well with SPMO, as they are managed differently and tend to outperform the market at different times.

Roundhill’s Generative AI Technology ETF (CHAT)

CHAT tracks just under 50 companies involved in four key areas of generative AI: platforms, infrastructure, enterprise software, and consumer software. This fund holds companies like NVIDIA, Estera Labs, Palantir, Google, and Arista Networks, which have hardware or software ecosystems with real services and applications used by end consumers and other companies.

CHAT is an actively managed fund, which means it can rebalance its holdings as often as needed based on new information. This fund has a 0.75% expense ratio but has returned over 30% year-to-date and over 100% since its inception in May 2023.

VanEck Semiconductor ETF (SMH)

SMH is a fund that focuses on the hardware that powers AI, including chip design, manufacturing, and semiconductor equipment. The top 10 holdings in SMH make up over 70% of the fund, with NVIDIA, TSMC, and Broadcom taking up over 40% by themselves.

This fund has annual fees of 0.35% and has returned 22% year-to-date and over 250% over the last 5 years. The global AI chip market is expected to grow significantly over the next 8 years, making SMH a great way to capture this growth.

Putting it All Together

The four funds work together to provide a solid foundation for your portfolio and maximize returns. The S&P 500 Momentum ETF and the NASDAQ 100 make up the foundational 40% of the portfolio, while CHAT and SMH are the funds focused on targeting the winners of the AI revolution.

By combining these funds, you’ll get exposure to over 100 individual stocks and rebalance your holdings based on a wide variety of factors, such as momentum, market cap, and active fund management. This approach can help you outperform the market without having to worry about picking individual stocks.

Conclusion

In conclusion, these four dead simple investments can help you get rich without getting lucky. By understanding how these funds work together and managing your risks, you can achieve consistent, double-digit outperformance without relying on luck. Remember to always do your own research and consider your own financial goals and risk tolerance before investing.

Do not save what is left after spending, but spend what is left after saving.

Warren Buffett
Source: Investopedia

Frequently Asked Questions

Question 1

What is the S&P 500 Momentum ETF?

Question 2

How does the NASDAQ 100 track the market?

Question 3

What is Roundhill’s Generative AI Technology ETF?

Question 4

How does VanEck Semiconductor ETF work?

Question 5

What are the benefits of combining these funds?