Gaetan Dresse
Switzerland
Dear Community, I keep on reading everywhere that stocks are expensive, that the market is overvalued and I’m hearing so many people telling me they will wait for a market crash to start investing. I have explained in previous posts why I believe this strategy is far from efficient and why dollar-cost averaging applied on quality investments is a better alternative (www.investopedia.com/terms/d/dollarcostaveraging.asp ) Now talking about prices, stocks might seem expensive based on traditional valuation metrics but when did disrupting companies grow so fast in the past? Never! While Wall Street focuses on short-term stock prices I focus on product innovation and financial performance and all I have been seeing this year is: 1. Tech companies growing 30-60% on top of stellar growth from last year which was even higher. 2. The result: Funds being moved away from the most innovative companies alias high-growth tech, towards so-called “safer investments” alias profitable and mature organizations due to “slowing growth” which lead to agressive investing underperforming major indexes such as $SPY (State Street SPDR S&P 500 ETF) and $NSDQ100 in 2021. Not only would I sign both hands for 30-60% growth but taking into account the fact that some growth was moved forward by the pandemic those numbers are truly mind blowing. One of the most influential financial leaders of our time, Cathie Wood, mentioned many times that organizations prioritizing short-term profit over R&D will be left behind while institutions whose main focus is to keep innovating and gaining market share will thrive. I couldn’t agree more. Those are exciting times to be an investor, don’t be left behind!
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