There are several self-proclaimed experts in investing but only a few live up to their name. If you’re looking for someone who can provide you with a reliable source of investing information, then watch out for Cathie Wood’s investing moves.
Who is Cathie Wood? Why should you follow her investing methods?
Hi. My Antoaneta. Today we’ll talk about one of the most controversial investors of today, Cathie Wood. Don’t forget to check other blogs from my platform. Let’s begin.
Cathie Wood is the founder of Ark Invest, an asset management firm. She’s known as one of the masters of modern ETF. In 2021, her firm reported a massive gain of 153%. Over the past five years, Ark Invest (ARKK) reported annual returns averaging more than 40% for the past five years. Ark invests in innovative and disruptive technology companies, which possesses the potential for short term and long term growth.
Wood has received several accolades over the years for her investment performance. She has an estimated net worth of $400 million. What is she up to now?
Cathie Wood has made the headlines once again after she offloaded her portfolio in Zillow and Tesla. A lot of critics have tried to provide an explanation about her recent moves. So why is she selling out of her Zillow and Tesla positions when the latter is known to be the diamond of stocks.
Investors love Tesla because of its potential market value appreciation and stability. Cathie has been supporting Tesla. So what made her change her mind?
Cathie has been dubbed as an A stock picker due to Ark Invest, which she founded in 2014. She’s into active portfolio management. Her funds performed well and reported excellent market returns, which helped her earn the moniker as the Master of ETFs.
In 2020. Ark Invest delivered above-market gains of 153%, which surprised Wall Street. In the past five years, it reported an average annual return of 40%. However, 2021 has been a challenge for the company, which started to raise doubts about Cathie’s investment strategy.
Why Did She Sell Her Zillow Stocks?
Cathie applied her usual strategy when she bought Zillow stocks. However, market watchers were surprised when she backed out earlier than expected. She bought Zillow shares when the uncertainty in the market caused it to decline. Unfortunately, Cathie seemed to have overestimated Zillow’s ability to recover. She sold a total of 3.9 million shares of Zillow and another 1.8 million shares.
Zillow announced that it’s ending its iBuying business. The company announced earlier this year that they were putting the program on hold but nobody expected its complete removal. The company also revealed that it’ll be selling more than 7,000 properties at a price that’s lower than what they bought it for.
The company’s stock prices plummeted after this announcement. It also reported losses amounting to $380 million in the third quarter. Cathie didn’t provide any specific reason for selling her position in Zillow. However, the recent news about the company says it all. Zillow isn’t a good buy even for high-risk investors such as Cathie Wood.
Why Did She Sell Her Tesla Stocks?
Cathie once predicted that Tesla will have a market valuation of $3 trillion. Ark Invest set a price target of $7000 on Tesla shares by 2024. Tesla is doing well so why did she sell her stocks?
Cathie recently unloaded $62 million worth of Tesla shares. She then diverted her investments on Coinbase and other ventures. Between September and October, Ark Invest sold about 400 thousand Tesla stocks.
Her reason for selling the stock is that Tesla is performing too well. According to Ark Invest’s guide of holding stocks for every company, the company can’t keep on holding the same amount of Tesla stocks. The value of Tesla’s stocks within the fund should only be at 10% at most. They had to sell off their shares because if they don’t Tesla will hold 20% of the value of the fund.
With the right role model, method, and timing, you’ll see some improvements in your investing performance. Make sure to listen to the pros when it comes to investment advice. You can also check out my previous blogs such as “What Are The Top Metaverse Stocks To Buy Right Now“.
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Recommended for further reading:
- How to Make Money in Stocks: A Winning System In Good Times And Bad
- Keys to Success – Napoleon Hill
- Stock Market Investing For Beginners: The Investment Guide
- The Five Rules Successful Stock Investing
- Rich Dad’s Guide to Investing