The Tunji Letter, Edition #46
Corrections Will Occur || ARK Innovation ETF down 12% YTD || Mastercard Adds 6 Startups to Accelerator
Welcome to the Tunji Letter, Edition #46.
// Corrections Will Occur
A correction is a decline of 10% or more in the price of a security from its most recent peak. Corrections will occur. According to data from market analytics company Yardeni Research, there have been 38 declines of at least 10% in the S&P 500 since 1950. Over the last 71 years, there has been a correction every 1.87 years on average.
As a long-term investor, why should I care about corrections? You should care about corrections to use them as an opportunity to buy securities you have a high conviction in at low prices. A key goal as a long-term investor is to buy low. In buying low, you are further setting yourself up for strong returns. It is still important to remember that dollar-cost averaging is the easiest long-term investing strategy and allows you to completely ignore the noise and focus on putting a consistent amount of money into your high conviction securities on a weekly or monthly basis.
// ARK Innovation ETF down 12% YTD
Cathie Wood’s ARK Innovation ETF (ARKK) is down approximately 12% year-to-date (YTD). Over the past couple of weeks, multiple events have led to the major selloff of technology-focused stocks in the top 10 holdings of ARKK, such as Tesla, Square, Teladoc Health, and Roku. These events include President Joe Biden’s capital gains tax proposal and Secretary of the Treasury Janet Yellen stating in an interview that interest rates need to rise to keep the economy from overheating. It is important that the words of people in power matter in the short-term, but in the long-term (minimum of five years), the strongest companies will provide the best returns. ARKK holds strong companies and will adjust to position itself for the best returns possible over the next five years.
// Mastercard Adds 6 Startups to Accelerator
Mastercard (MA), a multinational leading financial services company, has welcomed six new companies into Mastercard Start Path, an accelerator program for fintech startups. The companies are Asante Financial Services, Cledara, Jifti, Moeda Seeds, SpendDebt, and Tippy. Moeda Seeds stands out as the only blockchain company offering digital banking, payments, and micro credits utilizing distributed ledger technology. Mastercard knows that change is happening now in the financial industry. In understanding the disruption occurring now and investing in it, Mastercard will continue to stay relevant and innovative as a leading financial services company.
// Latest Articles
Check out my latest articles:
· What to Know About the Space ETF Race
· Why Are Investors Bullish on AMD?
· What Does It Mean for a Company to Sandbag?
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Thank you for reading!
Tunji
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