Most financial advisors recommend to inexperienced investors to put a large part of their investment in broad index funds (e.g. SPY). They will usually reiterate that most actively managed funds underperform their benchmarks, that most day traders lose money, etc., in other words that beating the market is exceptionally hard and that therefore the inexperienced investor should not expect more than the CAGR of the S&P 500. But there are indices that have outperformed the S&P 500, e.g. the NASDAQ-100 (and the difference isn't small: CAGR 8% vs. 13% since the NASDAQ-100's inception). Prudent long-term investors should thus invest a large fraction of their money into a fund tracking those better-performing indices, e.g. QQQ.
But I rarely hear that recommendation. The assets under management of SPY are currently almost 2.5 times that of QQQ (and it was above 3x 3 years ago, when the outlook for QQQ was better). The most obvious counterargument to the recommendation is volatility, but I think this doesn't sound valid for a long-term investor. Since its inception, the NASDAQ-100 has gone through many downturns and it still outperformed the S&P 500 significantly. More importantly, the S&P 500 has gone through the same downturns (although not as pronounced), so this is not a strong argument in favour of the S&P 500. Similarly, I never hear a recommendation to put even a small fraction of your money into a leveraged fund like TQQQ (which even after this year's downturn has a CAGR of >30% since inception).
What am I missing? Is there something fundamentally wrong with QQQ, TQQQ and the like or are others just scared by the risk? The risk can be reduced by not throwing all your money at one asset, but compounding over a long investment time (I'm thinking of at least 30 years, i.e. from first salary to retirement) strongly suggests that at least one higher-performing asset should be in the portfolio.
Some data: Given a 10-year investment horizon, the NASDAQ 100 underperformed the S&P 500 8% of the time, with the worst underperformance being 6.5% CAGR. Given a 20-year investment horizon, the NASDAQ 100 underperformed 0.75% of the time, with the worst being 0.7%. Given a 25-year investment horizon, it never underperformed.