Are Tesla and ARKK good investments?

A few months ago ALL I heard about was Tesla and ARK ETF. Everyone was in a frenzy about tech stocks. It felt to me like the late 90s (after which tech stocks took plummeted and needed about 17 years to recover to previous levels!)‎

I like Tesla and a lot of the tech companies. (I happen to own them all inside of my index funds) But I warned caution that what happened the last five years is probably not what’s going to happen the next five years. When you’re buying something that just had a huge run up in price, you’re buying HIGH (it’s preferable to “buy low, sell high”). It’s like the story of the tortoise and the hare. Get greedy and try to chase the hype and you’re likely to get burned. Slow and steady wins the race.‎

Meanwhile our boring friends the index funds are plugging away, collecting value from the world’s companies and routing it directly into the pockets of their owners. I often get objections like “a 10% return isn’t realistic!” Well, index funds are up about 10% this year SO FAR. Last year they were +18%. The year before that, +31.5%.‎

If you’re curious about those three index funds in this chart:‎

SPY: S&P 500 ETF. Basically large US companies‎
VTWAX: Total world index fund. Basically every company in the world.‎
FDEWX: 2055 target date index fund. The world’s companies plus bonds based on your age.‎

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.‎


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