The most dangerous sentence in investing

Dear Reader,

This is probably the most dangerous sentence in investing:

‘You can’t go wrong buying X…’

Because it gives the dangerous illusion that a stock’s growth rises forever, and nothing can go wrong.

Common sense and history tell you that’s not true.

Stocks crash and bubbles burst. Even the biggest market booms end.

Take Ark Invest’s Innovation ETF.

In 2020, the tech-focused fund seemed like a ‘can’t go wrong’ bet with an astounding 152.5% gain. Excited investors poured in as much as US$2 billion a month during its peak.

Then the tables turned.

Innovation ETF just faced a 23.7% drop in December — putting it firmly in bear market territory.

Unfortunately, the fall of Ark Invest is just the beginning of a dangerous trend.

Investors are starting to realise that many ‘can’t go wrong’ tech stocks don’t have the revenues to back up their monster valuations.

This could trigger a massive sell-off that might crash the tech sector.

But unlike previous crashes, this next one will affect not just the stock market, but potentially EVERY asset class you can think of.

If you don’t prepare for it, you’re potentially exposing your savings and investments to this coming catastrophe.

That’s why I’ve prepared an exit strategy for you.

One that could even help you thrive when the dust settles.

Read all about it here.

Regards,

Vern Gowdie,
Editor, The Gowdie Letter