Better Buy: Amazon or Every Nasdaq Stock?

It's a question every investor faces each time a portfolio's idle cash is ready to be put to work. Is it smarter to seek safety in numbers and step into a broad market index fund like the Invesco QQQ Trust (NASDAQ: QQQ), which mirrors the performance of the Nasdaq 100 index? Or, can taking a swing on an individual stock be justified given that stock's current price and risk/reward profile?

Somehow, though -- with the Nasdaq Composite (NASDAQINDEX: ^IXIC) deep into record-high territory (and still moving deeper) on the heels of a 120% run-up from lows reached in March of last year -- the question seems even trickier now. Adding to this uncertainty is the fact that some of the names that led most of the rally are starting to falter.

Amazon (NASDAQ: AMZN) stock, for instance, is down 11% from its July highs, with most of that loss being the market's response to the company's second-quarter revenue shortfall. Facebook (NASDAQ: FB) is another unlikely laggard that could infect other key technology names. Its stock is within sight of record-high levels, bouncing back from its post-earnings setback marred by a disappointing growth outlook. It wouldn't take much for traders to extrapolate these themes and apply them to other names.

Source Fool.com