Posted on 02/21/2022 6:21:07 AM PST by millenial4freedom
Cathie Wood said investors are making a mistake by piling into index funds. Companies that have prospered in the past are often ripe for disruption, the Ark Invest boss said. The tech-stock guru said it's riskier to own benchmarks than Ark's funds.
Cathie Wood said risk-averse investors and fund managers are putting money in companies and benchmarks based on past successes, instead of betting on innovative companies.
"We have, I think, one of the most massive misallocations of capital in the history of mankind. You have investors investing in the past," the CEO and CIO of Ark Invest said in a CNBC interview this week.
(Excerpt) Read more at msn.com ...
Make me a sandwich!
She went fro managing 10 billion in 2019 to 85 billion now.
Sounds like she’s doing pretty good.
I’m thinking she’s an order out type of woman…
Just wondering what Freepers think: GM and Ford have made huge capital investments to research, design, manufacture and market EVs. Will they make a real profit on that huge allocation of capital or will they suffer huge losses overall?
Well, Ms. Wood does have a point about the danger in picking funds based on past performance. But the bottom line is that she’s upset because index funds don’t pay advisors the big commissions.
In my opinion, pick an index fund the adjusts itself as you get older. Make automatic monthly contributions. Set it and forget it.
Oh, and tell Ms. Wood that her services will not be needed.
I’m sure her “wife” will get right on that.
Interest rates haven’t even been deployed yet. Bloodbath coming, or already priced in. Mrs. Wood is smart, but being this tech heavy has pitfalls.
Buying stock in the secondary market, buying shares in Index Funds...strictly speaking, this is not true “capital investment” at all, is it? It’s just existing ownership interests changing hands. Isn’t it so that a true “capital investment” in a particular corporation creates a new ownership interest in that corporation, diluting (at least percentage wise, if not also “control”-wise) pre-existing ownership interests, but, more importantly, putting new money directly into that corporation’s bank account to do with that money whatever it deems best to do? This author doesn’t seem to be drawing that distinction and I wonder why.
Quick addition to my post #6. I’d pick a broad-based index fund, perhaps one that represents the entire U.S. stock market. It should also have a broad-based bond component that gets more weight as you get older.
Just my two cents. And we all know what two cents is worth these days.
“The tech-stock guru”
*************
More like gambler.
LOL, to be fair she has three kids.
“ Cathie Wood said risk-averse investors and fund managers are putting money in companies and benchmarks based on past successes, instead of betting on innovative companies.“
So she says they need to carry more risk and buy things she’s pushing?
salesman selling something. FUD.
Very few funds can beat the S&P index. That’s a well known fact.
That’s where Buffett plans to put most of the money he’s leaving to his wife.
He has stated many times that they are a good option for investors.
She’s also ignoring how much has gone into dull stocks as a wealth-preservation strategy with the interest rates and inflation having so dragged down the bond market.
Her innovation fund lost money last year while the indexes were booming.
Her ARKK fund has done nothing but fall over the past year.
Nearly 50% off its high.
“Will they make a real profit on that huge allocation of capital or will they suffer huge losses overall?”
They will suffer huge losses, and ‘We The People’ will be picking up the tab.
Same old, same old. *SPIT*
Very volatile over the last two years.
From 40 to 156 to 64.80.
I guess we’ll see how this year goes…
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