Catherine Wood, chief executive officer and chief investment officer, Ark Invest, speaks at the Milken Institute Global Conference in Beverly Hills, California in October of 2021.
Photo by Patrick T. Fallon.
The bull market for stocks has shown its strength by shrugging off price pressures, and unless an economic downturn hits, it will probably keep up its winning ways, according to Cathie Wood.
The Ark Invest chief acknowledged the "wall of worry" being climbed by investors faced with hot-running inflation.
Wood pointed out how bond moves did not affect equity markets.
The stock market was up even though the bond market had a heart attack in the first quarter.
"That was a loud signal to us that we're in a very strong bull market, and as long as we don't fall into a recession, we're probably going to be fine," Wood said.
Government bond yields went up on the possibility that the Federal Reserve might move faster on an interest rate hike. Some analysts think inflation could last until the second half of the century.
The US stock market hit a record high. The S&P 500 has risen 25% so far this year, driven by robust corporate earnings and evidence of the strength in the underlying economy. Wood's flagship ARK Innovation fund has fallen 8% this year, but has gained 175% over the past three years, compared with the S&P's 75% gain.
Wood said that her experience of inflation and markets in recent years made her stay upbeat.
When she started out in the 1980s, inflation was the main worry, and the strongest bull markets have typically climbed a wall of worry.
Growth stocks were on fire last year and we could do nothing wrong. If the market continued to narrow, we didn't think it would be a very healthy market.
Wood has shown she believes the current rates of inflation will fade, and laid out the deflationary forces she sees in the exchanges she has with Musk and Dorsey.
The market has expanded this year. She noted that value stocks, as well as defensive stocks, have done well in the face of changes in the economy.
The G20 Summit in late October agreed to introduce a 15% global corporate minimum tax. One part of the plan would allow countries to tax profits over 10% of revenue.
The market is climbing a wall of worry and is saying, 'No, we're not going to be clobbered with these tax rates in this next proposal.' This inflation will not last. Wood said that it's going to unwind pretty quickly.
Business Insider has an original article.
