Why the disdain for managed funds like ARKK that destroy total market funds?

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Little_Carmine
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Little_Carmine »

Candor wrote: Wed Mar 09, 2022 3:09 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:36 pm
marcopolo wrote: Tue Mar 08, 2022 9:22 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:20 pm Is anyone buying the dip in ARKK or similar funds?
Didn't you just panic sell ALL of your equities last week?!?
You definitely should NOT be buying the dip into this particular high-volatility fund.
Yes already looking to buy back in. I’m leaning toward VTI but curious if what people do with a fund like this.
It sounds like you are trying to make up for what you now realize was a poor decision by making more poor decisions. Anyone who went to 100% cash last week based on fear is the last person who should be buying ARKK.
Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
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dogagility
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dogagility »

Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
VTI is an excellent choice for the stock portion of your retirement portfolio asset allocation, but you need to consider whether you can remain invested at 100% VTI.

My advice for your employment situation is this: the best time to find a job is when you have a job.
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Candor »

Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm
Candor wrote: Wed Mar 09, 2022 3:09 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:36 pm
marcopolo wrote: Tue Mar 08, 2022 9:22 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:20 pm Is anyone buying the dip in ARKK or similar funds?
Didn't you just panic sell ALL of your equities last week?!?
You definitely should NOT be buying the dip into this particular high-volatility fund.
Yes already looking to buy back in. I’m leaning toward VTI but curious if what people do with a fund like this.
It sounds like you are trying to make up for what you now realize was a poor decision by making more poor decisions. Anyone who went to 100% cash last week based on fear is the last person who should be buying ARKK.
Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
The fact that you have made such drastic changes and are now considering more is instructive and indicates you don't have a well thought out plan or a sense of an appropriate AA. It may be helpful for you to start a separate thread and lay out your financial position in detail and I'm sure many members would be happy to assist in pointing you in the right direction for an appropriate portfolio given your unique circumstances. It may be that you would benefit from a fee based advisor or target date funds as a more hands off approach.

The path you are currently on is an almost certain way to underperform, at a minimum, and to materially affect your future in a negative way is a real possibility.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by exodusNH »

Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm
Candor wrote: Wed Mar 09, 2022 3:09 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:36 pm
marcopolo wrote: Tue Mar 08, 2022 9:22 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:20 pm Is anyone buying the dip in ARKK or similar funds?
Didn't you just panic sell ALL of your equities last week?!?
You definitely should NOT be buying the dip into this particular high-volatility fund.
Yes already looking to buy back in. I’m leaning toward VTI but curious if what people do with a fund like this.
It sounds like you are trying to make up for what you now realize was a poor decision by making more poor decisions. Anyone who went to 100% cash last week based on fear is the last person who should be buying ARKK.
Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
What is going to stop you from making another drastic move?

Do you understand why you made the decision to go to all cash just a few days ago? Until you understand that, you are liable to make a other sudden shift. Those kinds of actions almost guarantee that you'll be worse off in the long run.

If you think you're going to be laid off in 6 months, you should start looking for work now. Basically everyone is desperate for help. Better to get in now.

How big is your emergency fund? Can you handle 12 months of expenses?
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Little_Carmine
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Little_Carmine »

exodusNH wrote: Thu Mar 10, 2022 10:15 am
Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm
Candor wrote: Wed Mar 09, 2022 3:09 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:36 pm
marcopolo wrote: Tue Mar 08, 2022 9:22 pm

Didn't you just panic sell ALL of your equities last week?!?
You definitely should NOT be buying the dip into this particular high-volatility fund.
Yes already looking to buy back in. I’m leaning toward VTI but curious if what people do with a fund like this.
It sounds like you are trying to make up for what you now realize was a poor decision by making more poor decisions. Anyone who went to 100% cash last week based on fear is the last person who should be buying ARKK.
Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
What is going to stop you from making another drastic move?

Do you understand why you made the decision to go to all cash just a few days ago? Until you understand that, you are liable to make a other sudden shift. Those kinds of actions almost guarantee that you'll be worse off in the long run.

If you think you're going to be laid off in 6 months, you should start looking for work now. Basically everyone is desperate for help. Better to get in now.

How big is your emergency fund? Can you handle 12 months of expenses?
I do not have a cash emergency fund. All I have is the money in my retirement accounts and then a separate taxable account and my paid off house. I'm trying to decide what to do for a new career once I get laid off. Probably will go to a new field is my plan.

I can probably buy VTI and not touch my investments. I'll accept the fact that they go up and down. The money I've been earning in the meantime I can put in my savings account for an emergency fund.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by exodusNH »

Little_Carmine wrote: Thu Mar 10, 2022 10:56 am
exodusNH wrote: Thu Mar 10, 2022 10:15 am
Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm
Candor wrote: Wed Mar 09, 2022 3:09 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:36 pm

Yes already looking to buy back in. I’m leaning toward VTI but curious if what people do with a fund like this.
It sounds like you are trying to make up for what you now realize was a poor decision by making more poor decisions. Anyone who went to 100% cash last week based on fear is the last person who should be buying ARKK.
Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
What is going to stop you from making another drastic move?

Do you understand why you made the decision to go to all cash just a few days ago? Until you understand that, you are liable to make a other sudden shift. Those kinds of actions almost guarantee that you'll be worse off in the long run.

If you think you're going to be laid off in 6 months, you should start looking for work now. Basically everyone is desperate for help. Better to get in now.

How big is your emergency fund? Can you handle 12 months of expenses?
I do not have a cash emergency fund. All I have is the money in my retirement accounts and then a separate taxable account and my paid off house. I'm trying to decide what to do for a new career once I get laid off. Probably will go to a new field is my plan.

I can probably buy VTI and not touch my investments. I'll accept the fact that they go up and down. The money I've been earning in the meantime I can put in my savings account for an emergency fund.
What changed between now and 10 days ago?

I wonder if having a 12-month cash emergency fund would help you weather the market.
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Little_Carmine
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Little_Carmine »

exodusNH wrote: Thu Mar 10, 2022 1:47 pm
Little_Carmine wrote: Thu Mar 10, 2022 10:56 am
exodusNH wrote: Thu Mar 10, 2022 10:15 am
Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm
Candor wrote: Wed Mar 09, 2022 3:09 pm

It sounds like you are trying to make up for what you now realize was a poor decision by making more poor decisions. Anyone who went to 100% cash last week based on fear is the last person who should be buying ARKK.
Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
What is going to stop you from making another drastic move?

Do you understand why you made the decision to go to all cash just a few days ago? Until you understand that, you are liable to make a other sudden shift. Those kinds of actions almost guarantee that you'll be worse off in the long run.

If you think you're going to be laid off in 6 months, you should start looking for work now. Basically everyone is desperate for help. Better to get in now.

How big is your emergency fund? Can you handle 12 months of expenses?
I do not have a cash emergency fund. All I have is the money in my retirement accounts and then a separate taxable account and my paid off house. I'm trying to decide what to do for a new career once I get laid off. Probably will go to a new field is my plan.

I can probably buy VTI and not touch my investments. I'll accept the fact that they go up and down. The money I've been earning in the meantime I can put in my savings account for an emergency fund.
What changed between now and 10 days ago?

I wonder if having a 12-month cash emergency fund would help you weather the market.
I guess I realized that I will try not to use these funds until retirement hopefully 30+ years from now. If I just keep adding to them every month and not worry about volatility, then I’m likely to be better off in the long run

I’ve also determined by expenses to be around $55k so I think this will give me flexibility since my normal life doesn’t cost $100k plus. I do keep my slush fund invested if I need to make an “abstract” purchase not part of my normal budget.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by exodusNH »

Little_Carmine wrote: Thu Mar 10, 2022 2:32 pm
exodusNH wrote: Thu Mar 10, 2022 1:47 pm
Little_Carmine wrote: Thu Mar 10, 2022 10:56 am
exodusNH wrote: Thu Mar 10, 2022 10:15 am
Little_Carmine wrote: Wed Mar 09, 2022 7:20 pm

Candor,

How about going back to 100% VTI? That's my plan for the retirement accounts and maybe keep some cash to the sidelines for emergency fund. It's looking like I'll be laid off in 6 months give or take. Thank you.
What is going to stop you from making another drastic move?

Do you understand why you made the decision to go to all cash just a few days ago? Until you understand that, you are liable to make a other sudden shift. Those kinds of actions almost guarantee that you'll be worse off in the long run.

If you think you're going to be laid off in 6 months, you should start looking for work now. Basically everyone is desperate for help. Better to get in now.

How big is your emergency fund? Can you handle 12 months of expenses?
I do not have a cash emergency fund. All I have is the money in my retirement accounts and then a separate taxable account and my paid off house. I'm trying to decide what to do for a new career once I get laid off. Probably will go to a new field is my plan.

I can probably buy VTI and not touch my investments. I'll accept the fact that they go up and down. The money I've been earning in the meantime I can put in my savings account for an emergency fund.
What changed between now and 10 days ago?

I wonder if having a 12-month cash emergency fund would help you weather the market.
I guess I realized that I will try not to use these funds until retirement hopefully 30+ years from now. If I just keep adding to them every month and not worry about volatility, then I’m likely to be better off in the long run

I’ve also determined by expenses to be around $55k so I think this will give me flexibility since my normal life doesn’t cost $100k plus. I do keep my slush fund invested if I need to make an “abstract” purchase not part of my normal budget.
You certainly don't need anyone's permission here to do anything with your money. I think people's concern is that you recently made a very dramatic shift, which usually indicates you were too aggressive in your allocation.

One thought might be to go 50/50 into https://investor.vanguard.com/mutual-fu ... file/VTMFX and VTI. That gives you an overall allocation of 75% stocks and 25% bonds. Normally, balanced funds aren't recommended in taxable, but this one does try to be tax-efficient. I wonder if having the balanced fund, which should fluctuate less than separate holdings, might be more tolerable for you in the long run. E.g. that fund might be down 2.5% when VTI is down 5%.

The other option would be 75% VTI and 25% BND (assuming you're in the <=24% tax bracket).

You could also look at holding VTSAX/VBTLX instead. Since that reprices only once per day, after the market closes, you won't see it jump up and down all day. The goal is to make you less likely to fiddle with your account, since you're not planning on using it for 30 years.
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Little_Carmine
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Little_Carmine »

exodusNH wrote: Thu Mar 10, 2022 2:56 pm
Little_Carmine wrote: Thu Mar 10, 2022 2:32 pm
exodusNH wrote: Thu Mar 10, 2022 1:47 pm
Little_Carmine wrote: Thu Mar 10, 2022 10:56 am
exodusNH wrote: Thu Mar 10, 2022 10:15 am

What is going to stop you from making another drastic move?

Do you understand why you made the decision to go to all cash just a few days ago? Until you understand that, you are liable to make a other sudden shift. Those kinds of actions almost guarantee that you'll be worse off in the long run.

If you think you're going to be laid off in 6 months, you should start looking for work now. Basically everyone is desperate for help. Better to get in now.

How big is your emergency fund? Can you handle 12 months of expenses?
I do not have a cash emergency fund. All I have is the money in my retirement accounts and then a separate taxable account and my paid off house. I'm trying to decide what to do for a new career once I get laid off. Probably will go to a new field is my plan.

I can probably buy VTI and not touch my investments. I'll accept the fact that they go up and down. The money I've been earning in the meantime I can put in my savings account for an emergency fund.
What changed between now and 10 days ago?

I wonder if having a 12-month cash emergency fund would help you weather the market.
I guess I realized that I will try not to use these funds until retirement hopefully 30+ years from now. If I just keep adding to them every month and not worry about volatility, then I’m likely to be better off in the long run

I’ve also determined by expenses to be around $55k so I think this will give me flexibility since my normal life doesn’t cost $100k plus. I do keep my slush fund invested if I need to make an “abstract” purchase not part of my normal budget.
You certainly don't need anyone's permission here to do anything with your money. I think people's concern is that you recently made a very dramatic shift, which usually indicates you were too aggressive in your allocation.

One thought might be to go 50/50 into https://investor.vanguard.com/mutual-fu ... file/VTMFX and VTI. That gives you an overall allocation of 75% stocks and 25% bonds. Normally, balanced funds aren't recommended in taxable, but this one does try to be tax-efficient. I wonder if having the balanced fund, which should fluctuate less than separate holdings, might be more tolerable for you in the long run. E.g. that fund might be down 2.5% when VTI is down 5%.

The other option would be 75% VTI and 25% BND (assuming you're in the <=24% tax bracket).

You could also look at holding VTSAX/VBTLX instead. Since that reprices only once per day, after the market closes, you won't see it jump up and down all day. The goal is to make you less likely to fiddle with your account, since you're not planning on using it for 30 years.
Thank you for the advice. I will look into the balanced fund as a possibility.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

This is like watching a slow moving car crash - wow what a crash & burn.

I still can't believe the OP started this post at the picotop. Karma is a (female dog).
Simplicity is the key to brilliance - Vti & chill.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by S4C5 »

Little_Carmine wrote: Tue Mar 08, 2022 9:36 pm
marcopolo wrote: Tue Mar 08, 2022 9:22 pm
Little_Carmine wrote: Tue Mar 08, 2022 9:20 pm Is anyone buying the dip in ARKK or similar funds?
Didn't you just panic sell ALL of your equities last week?!?
You definitely should NOT be buying the dip into this particular high-volatility fund.
Yes already looking to buy back in. I’m leaning toward VTI but curious if what people do with a fund like this.
No. ARK funds are made up of hot garbage stock. It would not be a wrong decision to sell them now, even at 52 week lows, even if they go back up in the short term. I don't think it's a wrong decision to get out of these funds at any price. I held on until December, and I'm glad I got out then, but I wish I had gotten out way sooner. Selling a broad market index to buy these funds at this time WOULD be a wrong decision.

I have looked at the chart and the contrarian in me has wondered, maybe........ Then nope. No. I had to slap myself. Hard no. Yes. Tech is potentially oversold. I bought the S&P 500 and sold puts on AAPL and MSFT today instead. If you want tech exposure, do that. Maybe buy Zoom or something with a reasonable valuation now if you are feeling a little more brave. Don't buy ARKK.

The purpose of remembering things is to serve as an instruction manual for the future. If something bad happened to you, then hopefully you can figure out why so you can prevent it from happening again. Evolutionarily, that's why we think like this and obsess over our past mistakes rather than just forget that anything bad happened and losing our money at the casino over and over again.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

Remarkably, ARKK is still far ahead of the S&P 500 over the last 5 years. But it's down -59% over the last 12 months. Yikes.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

willthrill81 wrote: Mon Mar 14, 2022 5:21 pm Remarkably, ARKK is still far ahead of the S&P 500 over the last 5 years. But it's down -59% over the last 12 months. Yikes.
Unremarkably, 80% of the people who invested in ARKK invested AFTER the big run up, and have lost money.

Fairly typical for "hot" funds. It's a tale as old as time.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

HomerJ wrote: Mon Mar 14, 2022 5:30 pm
willthrill81 wrote: Mon Mar 14, 2022 5:21 pm Remarkably, ARKK is still far ahead of the S&P 500 over the last 5 years. But it's down -59% over the last 12 months. Yikes.
Unremarkably, 80% of the people who invested in ARKK invested AFTER the big run up, and have lost money.

Fairly typical for "hot" funds. It's a tale as old as time.
Yup. I wonder how it feels to get one's keister handed to oneself.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by richard.h.gao »

SARK has officially passed ARKK

Image
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by peskypesky »

richard.h.gao wrote: Tue Mar 15, 2022 12:13 am SARK has officially passed ARKK

Image
And is up 67% YTD!!!
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by PNWpilot »

Think of it like dating in college.

ARKK = the girl with rapid mood swings. She's fun, energetic, and rowdy. She knows how to have a good time. She doesn't like labels or big commitments, but says she really likes you. Her mood is unpredictable, and when it's bad.....it's really bad. Your friends and family express some concern about her, but the dopamine highs you get from her in the short-term are just too hard to walk away from. You have doubts about her ability to settle down and get married, but then again you start to think maybe marriage isn't all it's cracked up to be. Maybe you don't actually want to get married after all. Just when you begin to doubt yourself that maybe she isn't the right person, she professes to love you and states she doesn't know what she would do without you. You find her statements compelling and decide to stay with her, all the while ignoring the growing discomfort in your gut that this could end badly.

VTSAX = the college girl you see from across the library on Friday evening. She's calm, a little shy, very polite, and shockingly pretty. You strike up a conversation and are impressed by her intellect. She's strong in her values and exudes trust. She doesn't care to go out much on the weekends, and rowdy is hardly a word that would define her. You begin dating and find the process happens very naturally. Your friends and family adore her and ask that you invite her over whenever you come into town. You start thinking about marriage, and find yourself google-searching diamond rings in your downtime at work. While you maybe never saw it coming, you have no doubt that she is the one for you.

Hope that helps to clear things up. Which one do you really want to be with long-term? :beer
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Afty »

HomerJ wrote: Mon Mar 14, 2022 5:30 pm
willthrill81 wrote: Mon Mar 14, 2022 5:21 pm Remarkably, ARKK is still far ahead of the S&P 500 over the last 5 years. But it's down -59% over the last 12 months. Yikes.
Unremarkably, 80% of the people who invested in ARKK invested AFTER the big run up, and have lost money.

Fairly typical for "hot" funds. It's a tale as old as time.
The classic “buy high, sell low” strategy
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

Don't look now, but Cathie is up 37% in 2 weeks ;)
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

atdharris wrote: Wed Mar 30, 2022 8:39 am Don't look now, but Cathie is up 37% in 2 weeks ;)
Just after those who bought near the high have all sold.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

willthrill81 wrote: Wed Mar 30, 2022 8:46 am
atdharris wrote: Wed Mar 30, 2022 8:39 am Don't look now, but Cathie is up 37% in 2 weeks ;)
Just after those who bought near the high have all sold.
I'll give Cathie credit, she has kept most of her following. Even money managers I know kept recommending I buy as it dropped as they said they had for their personal portfolios. I am curious to see how her fund plays out over the long run.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

atdharris wrote: Wed Mar 30, 2022 8:50 am
willthrill81 wrote: Wed Mar 30, 2022 8:46 am
atdharris wrote: Wed Mar 30, 2022 8:39 am Don't look now, but Cathie is up 37% in 2 weeks ;)
Just after those who bought near the high have all sold.
I'll give Cathie credit, she has kept most of her following. Even money managers I know kept recommending I buy as it dropped as they said they had for their personal portfolios. I am curious to see how her fund plays out over the long run.
You need really big returns to recover from a -65% drawdown. At the moment, the fund is still 53% lower than its ATH on 2/12/2021.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by drk »

willthrill81 wrote: Wed Mar 30, 2022 8:57 am At the moment, the fund is still 53% lower than its ATH on 2/12/2021.
That is deep value.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

willthrill81 wrote: Wed Mar 30, 2022 8:57 am
atdharris wrote: Wed Mar 30, 2022 8:50 am
willthrill81 wrote: Wed Mar 30, 2022 8:46 am
atdharris wrote: Wed Mar 30, 2022 8:39 am Don't look now, but Cathie is up 37% in 2 weeks ;)
Just after those who bought near the high have all sold.
I'll give Cathie credit, she has kept most of her following. Even money managers I know kept recommending I buy as it dropped as they said they had for their personal portfolios. I am curious to see how her fund plays out over the long run.
You need really big returns to recover from a -65% drawdown. At the moment, the fund is still 53% lower than its ATH on 2/12/2021.
Oh I am aware. It is still well off its ATHs and I doubt you will see it at $150/share anytime in the near future. But, I think most of the sellers have already sold and taken their losses.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

atdharris wrote: Wed Mar 30, 2022 9:05 am
willthrill81 wrote: Wed Mar 30, 2022 8:57 am
atdharris wrote: Wed Mar 30, 2022 8:50 am
willthrill81 wrote: Wed Mar 30, 2022 8:46 am
atdharris wrote: Wed Mar 30, 2022 8:39 am Don't look now, but Cathie is up 37% in 2 weeks ;)
Just after those who bought near the high have all sold.
I'll give Cathie credit, she has kept most of her following. Even money managers I know kept recommending I buy as it dropped as they said they had for their personal portfolios. I am curious to see how her fund plays out over the long run.
You need really big returns to recover from a -65% drawdown. At the moment, the fund is still 53% lower than its ATH on 2/12/2021.
Oh I am aware. It is still well off its ATHs and I doubt you will see it at $150/share anytime in the near future. But, I think most of the sellers have already sold and taken their losses.
Yes, those who aren't strong devotees to Woods seem very likely to be long gone, almost certainly including the OP.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

Cathie Wood's ARKK is worst-performing US equity fund in Q1 2022: Morningstar
According to financial analytics firm Morningstar, Ark Innovation (ARKK) was the worst performing U.S. equity fund in its universe of coverage during the first quarter of 2022. The exchange-traded fund registered a loss of 29.9% in the three months ended March 31, dragged down by a sell-off in high-growth, technology stocks during the period.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by countmein »

You would expect ARKK to beat TSM over time because it is so much riskier. But since it takes all its risk in a very inefficient slice of the market (in the worst BaB decile), you find that 1.5x TSM approximates ARKK's return with far less volatility.

ARKK enthusiasts seem to not realize that what they really want is leverage.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

countmein wrote: Wed Apr 06, 2022 5:17 pm You would expect ARKK to beat TSM over time because it is so much riskier. But since it takes all its risk in a very inefficient slice of the market (in the worst BaB decile), you find that 1.5x TSM approximates ARKK's return with far less volatility.

ARKK enthusiasts seem to not realize that what they really want is leverage.
I think Arkk is similar to Tqqq (3x Ndx) than 1.5x Spx. But point remains: better to buy the more diversified levered index.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

Just checking in, because there was a story in the news that Cathie Wood is complaining about Coinbase stock being down -40%, which "makes no sense" to her because blockchain.com is up and she thinks Coinbase is a much better company. If blockchain.com is up, she thinks Coinbase ought to be up, and that "the public markets aren’t... are not doing the research."

At the moment, if you had bought ARKK before 9/1/2017, you would now be ahead of the S&P 500. Otherwise not. Anyone who got in later than that is behind the S&P 500. Behind, despite taking more than twice as much risk, as measured either by standard deviation or by maximum drawdown.

Source

Image
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by impatientInv »

nisiprius wrote: Wed Apr 13, 2022 8:56 pm Just checking in, because there was a story in the news that Cathie Wood is complaining about Coinbase stock being down -40%, which "makes no sense" to her because blockchain.com is up and she thinks Coinbase is a much better company. If blockchain.com is up, she thinks Coinbase ought to be up, and that "the public markets aren’t... are not doing the research."

At the moment, if you had bought ARKK before 9/1/2017, you would now be ahead of the S&P 500. Otherwise not. Anyone who got in later than that is behind the S&P 500. Behind, despite taking more than twice as much risk, as measured either by standard deviation or by maximum drawdown.

Source

Image
Most of ARKKs inflows came in 2020-21 Q1. Vast majority of people who invested in ARKK got burned.

Image
https://www.morningstar.com.au/etfs/art ... n-a/216697
No individual stocks.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by impatientInv »

countmein wrote: Wed Apr 06, 2022 5:17 pm You would expect ARKK to beat TSM over time because it is so much riskier. But since it takes all its risk in a very inefficient slice of the market (in the worst BaB decile), you find that 1.5x TSM approximates ARKK's return with far less volatility.

ARKK enthusiasts seem to not realize that what they really want is leverage.
Exactly correct. 1.5x SP500 has better returns that ARKK since inception, but with less volatility. (higher Sharpe ratio)
It's easy to get leverage in IBKR margin account or implement with UPRO-VOO.

Below is performance since ARKK inception

Code: Select all

Portfolio	Inception   Now    CAGR   Sharpe ratio
ARKK.    	$10,000	  $35,764   18.75%   0.68
1.5X SP500	$10,000	  $37,655   19.57%.  0.91
VOO-UPRO        $10,000   $36,201   18.94%   0.82
https://www.portfoliovisualizer.com/bac ... tion4_3=30
No individual stocks.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by freyj6 »

At one point Cathie said she'd switch to holding FAANG stocks in ARKK in specific market conditions.

I find that amusing now that 2 of the 5 stocks (FB and Netflix) have dropped 50%.

This thread will remains a great reference for when the next hot manager comes around.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by ClevrChico »

freyj6 wrote: Wed Apr 20, 2022 1:02 pm This thread will remains a great reference for when the next hot manager comes around.
100%, this is a classic!
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Toons »

Nothing new under the Sun
Reversion to the mean.
Reminds me of Vanguard Energy Fund,
Those who invested around 2008
Hopefully have been patient the last 14 years
:happy

PS
Who remembers Munder Net net fund
assets ballooned from 10 million to
12 billion
:mrgreen:
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

This thing is trading like bitcoin these days - up 4%, down 5%, up 7%, down 6%.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by typical.investor »

HomerJ wrote: Mon Mar 14, 2022 5:30 pm
willthrill81 wrote: Mon Mar 14, 2022 5:21 pm Remarkably, ARKK is still far ahead of the S&P 500 over the last 5 years. But it's down -59% over the last 12 months. Yikes.
Unremarkably, 80% of the people who invested in ARKK invested AFTER the big run up, and have lost money.

Fairly typical for "hot" funds. It's a tale as old as time.
Sure is!
“Investors have put in about $15.7 billion, and the current assets total is $11.6 billion,” calculates Morningstar portfolio strategist Amy Arnott. That’s since the fund’s launch in 2014, she says. “Over the past two years…there’s about a $2.6 billion loss.”

And that’s true even though the fund price itself is up 270% since 2014, and is about 50% from two years ago. That’s because investors put comparatively little into the fund early on, before it rose, but tons near the 2020 peak, just before the crash.
I think the corollary here is when value investors sell after a stretch of poor returns.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by abuss368 »

Amazing how this tide has turned with ARKK funds. Active managers will sometimes enjoy the sunshine only to enter a period of darkness.

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by protagonist »

I knew nothing about ARKK until I just saw this thread today.
I noted that it is down 30% from the beginning of the year through March 31.
It lost 23.88% in 2021.
Today the DJIA is up 1.02%. ARKK is down almost 6% today. ER .75%.

So that answers the OP's question. Clearly the fund is insanely volatile. When it is good it is really good, and when it is bad it is awful.
Last edited by protagonist on Wed Apr 20, 2022 7:13 pm, edited 1 time in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by wander »

protagonist wrote: Wed Apr 20, 2022 7:08 pm I knew nothing about ARKK until I just saw this thread today.
I noted that it is down 30% from the beginning of the year through March 31.
IT LOST 23.88% in 2021.
Today the DJIA is up 1.02%. ARKK is down almost 6% ER .75%.

So that answers the OP's question. Clearly the fund is insanely volatile. When it is good it is really good, and when it is bad it is awful.
Not sure about it destroying the total market funds but it sure would destroy my portfolio if I had jumped in at its highest point of value.
The OP's last post was on Oct 26, 2021.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

freyj6 wrote: Wed Apr 20, 2022 1:02 pm At one point Cathie said she'd switch to holding FAANG stocks in ARKK in specific market conditions.

I find that amusing now that 2 of the 5 stocks (FB and Netflix) have dropped 50%.

This thread will remains a great reference for when the next hot manager comes around.
Oh yeah. I remember that now. I think she said she would hold them as "cash like" investments, right? :o
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by freyj6 »

000 wrote: Wed Apr 20, 2022 8:57 pm
freyj6 wrote: Wed Apr 20, 2022 1:02 pm At one point Cathie said she'd switch to holding FAANG stocks in ARKK in specific market conditions.

I find that amusing now that 2 of the 5 stocks (FB and Netflix) have dropped 50%.

This thread will remains a great reference for when the next hot manager comes around.
Oh yeah. I remember that now. I think she said she would hold them as "cash like" investments, right? :o
Yeah that’s what I remember. I mean, inflation is high but it’s been a while since my “cash” lost 40% in a day (Netflix).
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

TSLA is up 9% today and somehow ARKK is negative. Pretty impressive
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by skierincolorado »

It always saddens me when there is so little self reflection when people's opinions are demonstrated to be wrong. On to the next great thing I suppose. Was it always like this? Is it human nature, or are people more vain and less reflective than they used to be?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by like2read »

In short, sector and asset class rotation. Sometimes tech is hot, sometimes energy. Sometimes growth is hot, sometimes value. Sometimes large cap is the top performer, sometimes small cap, or international, or real estate, or bonds, or cash. You get the idea.

The challenge is to avoid being blinded by the current trend of the moment, and assuming that trend will continue.

(A related idea is to be a contrarian, and to try to anticipate "skating to where the puck will be").

I love the following (now old) graphic from Vanguard's Framework for Constructing D ... Portfolios which in a single picture illustrates the difficulty of trying to predict which asset class will lead next.

Image

l2r
Last edited by like2read on Thu Apr 21, 2022 2:24 pm, edited 1 time in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

How does ARKK drop 2.5% today when TSLA is up 7%? It must really take skill for that to happen
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

skierincolorado wrote: Thu Apr 21, 2022 9:18 am It always saddens me when there is so little self reflection when people's opinions are demonstrated to be wrong. On to the next great thing I suppose. Was it always like this? Is it human nature, or are people more vain and less reflective than they used to be?
It's a psychological self-defense response and is manifested in many ways. For instance, when good things happen, we tend to say that we were responsible for it, but when bad things happen, we blame something or someone else. There are various theories surrounding this phenomenon, one of which is self-affirmation theory.

However, this self-affirmation can be counterproductive and cause people to purposefully not learn to adjust their own behavior when needed.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

willthrill81 wrote: Thu Apr 21, 2022 10:59 am
skierincolorado wrote: Thu Apr 21, 2022 9:18 am It always saddens me when there is so little self reflection when people's opinions are demonstrated to be wrong. On to the next great thing I suppose. Was it always like this? Is it human nature, or are people more vain and less reflective than they used to be?
It's a psychological self-defense response and is manifested in many ways. For instance, when good things happen, we tend to say that we were responsible for it, but when bad things happen, we blame something or someone else. There are various theories surrounding this phenomenon, one of which is self-affirmation theory.

However, this self-affirmation can be counterproductive and cause people to purposefully not learn to adjust their own behavior when needed.
Another counterintuitive aspect of investing is something akin to a reverse Dunning Kruger effect- that is: the more you learn about investing, the less you are likely to outperform the index. Unlike DK, the more you learn, the more you realize the rest is noise.

After learning the basics like expense ratios, diversification, buying the market, rebalancing, et al, the rest is irrelevant. There's a reason 95% of day traders lose money, and most hedge fund managers underperform. Having more knowledge doesn't equate to financial success in investing.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Maverick3320 »

"I don't own any ARKK yet, but am planning to go 30% allocation next week, only because I can't allocate more in my 403b."

-OP, 13 Feb 2021


Ouch. No wonder why this guy dropped off the forum. Probably had to get a second job to make up for the losses after putting 1/3 of his portfolio in at exactly the wrong time.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Scott S »

skierincolorado wrote: Thu Apr 21, 2022 9:18 am It always saddens me when there is so little self reflection when people's opinions are demonstrated to be wrong. On to the next great thing I suppose. Was it always like this? Is it human nature, or are people more vain and less reflective than they used to be?
Our culture doesn't do a very good job of supporting a person when they admit to a mistake and change course. It's seen as "weak" unless they can find someone else to blame for their mistake. So what else is there to do but double-down and try to appear "strong" and "have convictions" until it all blows over? :|
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by lws »

Bwlonge was willing to try this experiment.
Hope Bwlonge pivoted to something better.
Nothing wrong with trying.
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