COVER STORY Dud investments
Style victims In the recent market rout , style has played a significant role . There was too much excitement around growth stocks , and valuations became too high . Equally , investors had extrapolated ongoing high growth from companies that did well during the pandemic – notably in e-commerce and remote communication . When this failed to materialise , valuations lurched sharply lower . This is very different to there being a fundamental problem at the company – poor management , a bad product or stronger competition . Khalaf adds : “ Sometimes a big share-price fall or a long period of underperformance can be a sign that all is not well in the company , or indeed the sector . Consider if anything has changed for the worse since you bought it , using company trading statements to determine how the business has been doing . “ If you think there has been a fundamental deterioration in the business , and the fall in the share price doesn ’ t already reflect this , then it may be time to sell .”
Performance of ETF over 5yrs
$ 160
ARK Innovation ETF ( 48.8 %)
$ 140 |
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$ 120 |
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$ 100 |
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$ 80 |
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$ 60 |
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$ 40 |
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$ 20 |
Jan18 |
Jan19 |
Jan20 |
Jan21 |
Jan22 |
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Source : Google Finance |
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