Investor reconsiders Vanguard 500 and Invesco QQQ ETFs amid high valuations and slowing earnings growth

An investor with a long-term focus on compounding capital expresses concern over holding Vanguard 500 Index ETF and Invesco QQQ Trust ETF due to high market valuations and slowing earnings growth. Despite a seemingly reasonable forward P/E of 19.6x, the Shiller CAPE ratio is at 42.38x, near historic highs since 2000. Earnings growth for Q2 has slowed significantly when excluding large unrealized gains from Alphabet and Amazon, indicating a weaker base for future estimates. Additionally, the top holdings in these ETFs are heavily concentrated and reliant on substantial capital expenditures funded by credit, while the equity risk premium is low compared to bond yields, prompting the investor to consider reallocating new funds elsewhere.