What you see in the image below are the percentage increases (left scales) for the last period and subsequent declines for the last few months.
In 2022, the FAANG, Bitcoin, Ark (the funds managed by Cathie Wood) and Biotech sectors respectively fell.
The fact that all of these “assets” have been priced disproportionately is a fairly well-known fact. Personally, I was more surprised by the “before” than the “after” of what happened recently.
It is clear that not everything is to be thrown away, but a good one chosen at a disproportionate price remains a bad deal.
This is why it is crucial to seek balance in one’s portfolios. With regard to the ARK Innovation ETF (NYSE:ARKK) for example, we have seen how since the beginning of the year, using the InvestingPro premium sectionbecause Cathie Wood’s management is almost always exposed to high growth stocks, it has fallen about 62% over the past year compared to 11% for the S&P 500 index.
Thus, the one who was considered until the beginning of 2021 as the new Warren Buffett became an ordinary manager a few months later.
The itself, which for ten years has literally crushed other asset classes, today loses its appeal to investors, because many (inexperienced) people cannot manage its recess. If one thinks that a large number of them had then entered near the highs, the loss becomes even greater.
On bitcoin though (I have a small percentage of it in my wallet myself, less than 5%) this long-term chart is interesting, where we note the trend of the cryptocurrency against the expansion of the M3, American and European (“dollarized”) money supply.
Finally the Faang, many hastened to say that this acronym no longer exists. Again, I think last year a lot of these stocks were overpriced or even overpriced, but after drops of 40/50/60%, there are in my view more than a few good opportunities, since up to evidence to the contrary, many of them continue to be commendable.
It will certainly take patience and the recovery will not be immediate, at least as long as this phase of weakness remains, but the value of many of these companies is still intact.
The key word, in all phases of the market, remains “balance”.
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“This article is written for informational purposes only; it does not constitute a solicitation, offer, investment advice or recommendation as such and is in no way intended to encourage the purchase of any asset” . I would like to remind you that any type of asset, is valued from multiple points of view and is highly risky and therefore any investment decision and the associated risk remain with you.”