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Cathie Wood Calls For ARK ETFs To Triple Over The Next 5 Years

Wood's latest prediction may be incredibly difficult to make come true.

Cathie Wood is at it again.

Well known for her ultra bullish call on Tesla stock a few years and the success of the ARK family of ETFs, Wood just doubled down on her bet for where her funds are headed next.

Speaking on Bloomberg TV earlier today, she made a number of comments that will certainly get the attention of crypto-bulls and investors in general.

The most prominent one was her prediction that bitcoin is headed to $500,000, but I want to focus instead on what she said about her own ARK ETFs. She's been bullish on innovation for years, but according to her, the ride isn't over yet.

Here's what she's expecting for ARK.

While I admire her chutzpah and her willingness to make some bold calls, she's probably going to draw quite a few haters for saying this.

Virtually all of the major ARK ETFs, including the ARK Innovation ETF (ARKK), the ARK Next Generation Internet ETF (ARKW), the ARK Genomic Revolution ETF (ARKG), the ARK Autonomous Technology & Robotics ETF (ARKQ), the ARK Fintech ETF (ARKF) and the 3D Printing ETF (PRNT), have all generated huge returns for investors, but 2021 has been rough. All of the ARK ETFs are down about 20-30% from their all-time highs and, what's worse, most of the new money piled in right at the top. It's estimated that roughly half of the money in the ARK ETFs right now in underwater.

The correction has turned a lot of prior fans into Cathie Wood haters. In her defense, her team's investment style hasn't changed. The market has simply turned against the types of stocks that she typically invests in. Her latest call, though, might be a bit too bold even by her bullish standards.

Calling for 25% average annual returns in a time where many are expecting a decade of low returns as the Fed begins unwinding its massive stimulus and financial support package and interest rates likely begin heading higher is a bold call to say the least. It's really putting herself and her team out on a ledge to generate returns that may be exceptionally difficult to achieve.

The caveat, of course, is "if our research is correct". She gives herself an out, but that's not what is going to be remembered.

Can she deliver on her prediction? She's done it before, so who's to say that she couldn't do it again, but the odds sure seem stacked against her. This isn't nearly the same environment in which the ARK ETFs generated their returns over the past several years. The economy looks like it's in pretty good shape at the moment, but the stocks she typically invests in are still very expensive even after the recent pullback. Once the Fed begins pulling back on its support (and indications are that they may already be considering it), I'd expect it'll add a headwind that will be challenging to overcome.

Tripling over the next decade seems like a longshot, but I've been wrong before.

Here's a clip from the interview...

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