Why Now Might Not Be the Time to Invest Like Cathie Wood
Cathie Wood, the CEO of Ark Invest, has become one of the more recognizable names in the investing world. She is known for her interest in growth stocks and because her investment firm often places big bets on disruptive innovators. Her flagship exchange-traded fund (ETF), Ark Innovation ETF (NYSEMKT: ARKK), was one of the early investors in innovative tech companies like , Zoom Video Communications, and Coinbase Global.
Wood's Ark Invest made a major bull run during the early part of the pandemic, going from $3.5 billion in assets under management in early 2020 to $50 billion just a year later. That was the quickest growth of any ETF firm in history, according to The Wall Street Journal. The Ark Innovation ETF increased by over 300% from March 2020 to February 2021.
The pandemic-driven success of Wood's funds led many investors to adopt a similar style, but the conditions that allowed many of the portfolio's companies to flourish -- like extremely low interest rates and excess free cash floating around the system looking for a place to invest -- have since gone away and unplugged the money-printing machine on their way out. Nearly all the gains seen in 2020 and 2021 have since been erased and the stock trades at levels last seen in late 2019.
Source Fool.com
