It may appear that being a millionaire investor is only attainable for the world’s ultra-wealthy or Wall Street geniuses. With the correct investing technique, however, almost anyone can make money in the stock market. It’s easier said than done to find the correct investments. However, by continually investing in this one ETF, you may be on your way to becoming a multimillionaire.
Getty Images is the source of this image.
.
Investing in ETFs and Getting Rich
The type of investment you make can sometimes mean the difference between becoming a billionaire and losing all of your money. The greater the risk you take, the more money you may expect to make. However, if you take on too much danger, you risk losing everything.
Because you’re investing in multiple equities at once, ETFs (exchange-traded funds) can help you reduce your risk. Because most ETFs own dozens or hundreds of equities, if a few of them underperform, it shouldn’t have a significant impact on your overall portfolio.
The ARK Fintech Innovation ETF is one ETF that has the potential to make you wealthy (NYSEMKT:ARKF). The number of securities in this fund varies, but it usually ranges between 35 and 55 in the fintech sector. Square, PayPal, and Zillow are among the fund’s biggest holdings.
This ETF is relatively young, having been launched in January of this year. It has, however, returned a spectacular 62 percent average yearly rate of return since then. It has returned an amazing 108 percent in the last year alone.
If you put $100 per month into this fund and gain a 62 percent annual rate of return, you’d have roughly $2.7 million after 15 years. If you saved a little more each month, say $150, you’d have more than $4 million in the same amount of time.
Is this exchange-traded fund (ETF) good for you?
It’s crucial to consider your risk tolerance before investing your life savings in this fund.
Because the fintech business is prone to volatility, this ETF is on the riskier end of the spectrum. While you can expect huge profits, you can also expect to lose money. When it comes to investing, there are no certainties, and this is especially true when it comes to riskier assets.
Furthermore, the ARK Fintech Innovation ETF has only been around for a short time. While the fund’s returns have been excellent thus far, it’s impossible to predict how it will perform in the long run.
This isn’t to imply that the ETF isn’t worthwhile. This fund could be a good fit for you if you’re prepared to take on more risk in exchange for the chance to earn a lot of money. It may not be the greatest option for you if you are exceedingly risk averse.
Before you make a purchase…
If you do decide to invest in this fund, make sure your portfolio is well-diversified. Consider constructing a core portfolio of broad-market index funds and then investing any remaining funds in the ARK fund. That way, if the ARK fund underperforms, your entire portfolio will not be ruined.
The ARK Fintech Innovation ETF has seen incredible returns, and investing now might turn you into a multimillionaire in the future. Just make sure you’re aware of the risks before you go ahead and invest. You might possibly make a lot of money with this investment if you use the appropriate method.
This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
Continue reading
