Harford County's Jeff Judge in Investopedia: A Nasdaq 100 fund is not diversification

By Jeff Judge, CFP®, AEP®, ChFC®, CLU®, Managing Partner, Chesapeake Financial Planners, Forest Hill, MD.

Plenty of investors in Harford County own a Nasdaq 100 fund and think of it as a diversified holding. It can be a fine holding. But it is a bet that a narrow group of large platform companies stays dominant, and that is not the same thing as diversification.

Subscribe

Investopedia's Nathan Reiff asked me what could shape the next decade for these companies. Three things stood out. First, whether the money companies spend on AI turns into recurring revenue. One-time hardware and project sales can look strong for a quarter, while subscription and usage-based models may earn a valuation premium. Second, regulation. A single ruling can reprice a stock overnight. Third, overlap, meaning how much of your portfolio leans on the same names through other funds and holdings.

Overlap gets personal fast. If you work in tech, in Bel Air, Perry Hall, or anywhere in the Baltimore metro, your paycheck, your equity compensation, and your index fund can lean on the same handful of companies.

The takeaway: before adding to an index fund, look at its top holdings and ask how much of your total picture, including any employer stock, depends on them. This is general education, not individualized advice.

This piece builds on "Key Trends That Could Shape the Next Decade for Nasdaq 100 Companies," in Investopedia (September 2026).

Jeff Judge, CFP®, AEP®, ChFC®, CLU®, is Managing Partner at Chesapeake Financial Planners in Forest Hill, MD. Book an intro call.