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Why I Invest with ARK Investment Management’s ETFs

Why invest in ETFs —Imagine two carnival rides, side by side. One is the ‘drop tower’—the vertical structure that takes people up into the sky and then drops them all the way down. Another is more like the Goliath—a winding roller-coaster ride with ups and downs, twists and turns, and usually more than one surprise.

Similarly, there are two ways to invest in the stock market. Short term investors are riding the drop tower—they’re looking for a quick return, they’re making vertical bets and jumping in and out of positions at the slightest sign of change. They’re exposed to those memorable highs but also those stomach-churning drops, and they’re at the whim of the kind of market spooks we’re seeing today, with rising bond yields and fears of returning inflation.

Long-term investors strap in for a long ride. They buy companies that they believe will see steady improvements in profitability based on their existing offerings and their new product ideas. They vet companies for their ability to take advantage of market trends and increase shareholder dividends by running solid, growth-oriented businesses.

ARK Investment Management is a fan of the Goliath. They take a long-term view and identify large-scale investment opportunities based on market leadership and disruptive innovation. That makes ARK Investment Management’s ETFs one of my very smart investment choices.

Taking A Long-Term View

This type of investing isn’t for the faint of heart, as there can be huge volatility in the short term, as they have seen over the past few weeks. These ETFs lost over 20% of their value in the March 2020 dip and with tech stocks cooling and rising government-bond yields, have had a brutal, bear-market March 2021.

To me, this creates an opportunity to invest. I can get great value on these ‘beaten-up’ ETFs from a company I believe in. Despite the recent downturn, I believe in the long-term strategy of star stock-picker Cathie Wood, who founded ARK Investment Management in 2014.

Many see her as the next Warren Buffet. She takes a venture-capital style approach to public stock trading. Woods and her team of analysts run five of ARK’s ETF funds, which invest in companies like Tesla, Square, Roku, Alibaba, Pinterest, DocuSign, Snapchat, Paypal, and Netflix. These companies have been hit hard by the latest tech-market sell off, but ARK’s asset management in these domains have been responsible for huge gains in previous quarters.

A Radical Approach: Do You Believe in the Future?

I invest with ARK Investment Management, LLC because of the way they think about the future. With anywhere from $25B to $50B in assets managed, ARK Investment Management follows an investment philosophy that expects the unexpected. They center their attention on themes they believe will undergo dramatic changes, areas that will see the ground shift due to disruptive, breakthrough innovation that reshapes thinking on a global scale. Most investors develop tunnel vision around certain sectors, industries, or markets; ARK looks at convergence, market potential, and the long-term impact of disruptive innovation to examine them all.

Since investing with ARK, I feel confident that when those breakthrough technologies that will shape our future surface, my money will be there. I don’t need to be an expert in each individual area, which would distract me from my core passions of real estate and technology. I just have to make one smart decision: trust in ARK.

Investments in tech have always provided great returns. Their 20-30 year view assures me that I’ll get in early enough to take advantage of the beginning plays in game-changing companies, offering me VC-style returns.

I get the chance to do this without wasting my time with traditional valuation and outdated approaches to stock market investing.

My investments function independently in the exact style I would want them to, without me having to go along for the ride.

Drop-tower style investing has never been my approach. I’ve prided myself on committing to a strategy that stomachs short-term shocks but keeps long-term goals in mind. Before, I didn’t realize how much time and energy even that long-term strategy was taking away from my day-to-day agenda. With ARK, I get to share in the excitement of innovation and industry-disruption without having those decisions distract me from my work, my life, and my passions.

Even if there is some volatility in the short term, I can trust that my money will go where I want it to, which is always toward change, innovation and disruption. This way, investing works the way it should: it’s exciting, it’s sustainable, and sometimes, it’s life changing.