Every few years, a new investment manager rises from the ranks of many investment managers to gain prominence among retail investors. The investment manager typically has a winning record on the market, looks to continue and is among the many people who are regularly interviewed on the MSNBC and other shows. In the past it was Wall Street Week, but the shows come and go.
One of the most prominent investment managers is Cathie Wood of Ark Research and she focuses on growth stocks. Telsa’s stock has increased the profile of Ark.
In an article by Thyagaraju Adinarayan of Reuters, Cathie Wood’s Ark funds bought $246 million worth of Coinbase shares which went public on the Nasdaq Stock Exchange. Coinbase is a cryptocurrency similar to Bitcoin.
To buy the shares, Ark sold some Tesla shares. Recently, Ms. Wood said Telsa could move from $700 to $3,000 in 2025. The Ark fund sold $178 million in Tesla shares but it remains the biggest holding, which could easily be linked to portfolio management. When a stock becomes too big of a holding for a fund, it has choices to hold or sell, otherwise the portfolio is too dependent on the one stock. (if the stock continues to go up, few are concerned; if the stock dips, then they will be redemptions in the fund because the growth is slowing).
The Ark fund saw its assets under administration rise from $1.86 billion in 2019 to $22 billion in March of 2021.
Linking to dividend paying stocks, whether you should put money in cryptocurrency or not is up to you, however given some stocks trade on the exchanges if you own an index fund tied to the exchange the stock could factor into the price of the index. With portfolio management, you should ensure that if you do own index funds, they are not the same thing as your individual stocks otherwise there is very little diversification. While it is true index funds go up over the long term because they have rules to change the makeup of the index, if you have to sell or when it comes to sell, there likely will be fluctuation. Invest over the long term and they will have increased.
There are more questions than answers, till the next time – to raising questions.