Risk is attached with everything in life, with our money being a common victim. Warren Buffett says risk comes from not knowing what you are doing, and in most instances he is right. However, some people take risk head-on, and no asset displays this like ARK Invest ETFs. You can look at the graph of their flagship ETF and understand exactly what has been going on in the markets the past 2 years.
With ARK reaching pandemic lows, the only thing holding it up is investor confidence as we’ve discussed before. However, this investor confidence is now leading to a rally in the flagship Innovation ETF. Ever since its low a month ago, shares are up by almost 20 percent, outpacing the meager 5 percent gain from the S&P 500. Investors are continuing to buy up at what they believe is the bottom of the stock market despite the glaring signs that suggest you shouldn’t. Economists and stock market analysts are saying that this recent rally from bear market territory is false hope with major inflation data arriving this Friday. When it comes to ARK’s high growth companies, many are still grossly overvalued in comparison to the overall market as per financial metrics, and short sellers are continuing to increase their positions in some of the businesses. Nonetheless, Cathie Wood’s idea has her investors hooked on a ride or die journey, and time will tell if one of the most ambitious investment strategies comes to fruition.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.