Cathie Wood founded her investing firm ARK Invest in 2014 since inception she’s achieved a 31% annual average return. That’s around 2.5 times more than the return of the S&P 500. It’s not easy consistently beating the market year in and year out. She achieved this through calculated investing principles & calculated investing moves.
Invest in Innovation
- What is Cathie Wood most known for? What is the main way Cathie has made money through her investments? It’s by investing in innovation. Innovative companies are those that are changing the way the world operates.
- What were the companies that made the highest returns over the past decade? They were the likes of Netflix stock, they were innovative, and they were disruptive in the film & media sector. Netflix changed the way people watched films. Less than 20 dollars you can watch all the movies & tv shows at any time in your house. You don’t have to go to a movie theater or wait hours for it to come on TV. Netflix changed all of that through innovation.
- It’s the same with Apple. They changed the way we used phones. They changed what phones can do. Who would thought 10 years ago the amount of things that you can do with a simple smartphone in your hand? Apple and Steve Jobs dreamed it up through innovation & made their investors high returns.
- Facebook is another example of an extremely high return over the past decade. No need to send letters anymore.
- It’s these disruptive companies that have made the most money, and the highest returns & these are the types of companies that Cathie Wood focuses on. The ones that will do this over the next five to ten years.
- If we go to her website ark-invest under the fund description it tells all. When you companies that do this, it’s a game changer with investing. Because the growth opportunities with these companies are not just 50% or 100% growth, they have the capacity to 10 times, 20 times the initial investment. This is why Cathie says,
“People who want to succeed should think like a disrupter, that’s going to become more & more true because so much is changing in the world”.
Cathie Wood
Stick to These 4 Sectors Over the Next 10 Years
- There are 4 sectors that Cathie focuses on when it comes to her stock investments. These sectors are high growth, these sectors can compound at gigantic rates over the next decade. They are all disruptive.
- Companies within ARK include those that rely on or benefit from the development of new products or services, technological improvements & advancements in scientific research relating to the areas of DNA technologies (Genomic Revolution), industrial innovation in energy, automation & manufacturing (Industrial Innovation), the increased use of shared technology, infrastructure & services(Next Generation Internet) & technologies that make financial services more efficient( Fintech Innovation).
