How to Invest in NASDAQ

More than 2 billion shares change hands daily, as of 2010, on the NASDAQ stock exchange, according to NASDAQ Online. Over 3,000 companies make up NASDAQ, the nation's largest electronic stock market. If you have an investment account set up -- either with a brokerage, bank or mutual fund company -- there are several ways you can invest money in NASDAQ stocks.

Step 1

Buy individual NASDAQ stocks. While it will be difficult to create a diversified portfolio using this strategy, you'll still be able to stake a claim to at least a sliver of the NASDAQ stock market. You can find a list of NASDAQ stocks at the exchange's website (see Resources). Alternatively, look for "NASDAQ" next to the ticker symbol when you look at a company's stock quote online.

Step 2

Invest in the Qs. People call Powershares QQQ exchange-traded fund "the Qs" for short. One of the most actively traded securities in the world day in and day out, Powershares QQQ seeks to mirror the return of the NASDAQ 100 composite index. The 100 largest NASDAQ firms, based on market capitalization, comprise the NASDAQ 100. You can buy, sell, sell short and purchase on margin Powershares QQQ just like you do any other ETF or stock through your brokerage account.

Step 3

Buy a mutual fund that holds NASDAQ stocks. While purchasing individual NASDAQ stocks gives you limited exposure to the exchange and the Qs gives you a diversified position in NASDAQ's biggest names, to invest in a broader landscape of NASDAQ stocks, find funds that hold a larger number of NASDAQ stocks (see Resources). Some look to emulate the returns of NASDAQ as a whole, while others focus on certain sectors or groups of stocks.

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