‘We’re in a recession’

Politicians don’t like to use the “R-word,’ but the numbers suggest otherwise: real GDP in the U.S. slipped at an annual rate of 1.6% in Q1 and then fell another 0.9% in Q2.

Wood acknowledges the dire situation.

“We believe we're in a recession: two consecutive quarters of real GDP declines is the beginning of that definition,” she tells Bloomberg. “Three consecutive months of declines in leading indicators, which we have now would suggest the same.”

A slowdown in the economy could make the Fed think twice about hiking rates.

But what about soaring inflation?

Wood doesn’t believe that the most quoted inflation numbers tell the whole story.

“The CPI, and to some measure the PPI, both of those are lagging indicators. The Fed is driving policy off of lagging indicators.”

She explains that gold prices — which she calls “the real inflation gauge” — peaked in August 2020 and are now in the low end of the recent trading range.

Fundrise helps you invest in real estate without having to buy a house. Let their state-of-the-art technology and in-house experience open the door to new opportunities today.

Sign up

Staying committed to innovation

No matter what the Fed does next, its massive rate hikes — or rather the expectation of those rate hikes — have resulted in a slump in the stock market.

The S&P 500 is down 12% year to date, while Wood’s flagship fund Ark Innovation ETF (ARKK) tumbled by more than 45% during the same period.

But the super investor is sticking to her guns.

When asked why not keep more cash (instead of allocating it to stocks) given this tough economic backdrop, Wood’s response is simple: “We are going to be 100% invested in innovation.”

She explains that innovation will solve problems — and there are plenty of problems at the moment.

“We've got the supply chain problems, which we're still hearing about. We've got energy and food prices up because of the war, really hurting consumer purchasing power,” says Wood.

“And so I think better, cheaper, faster, more productive, more efficient, more creative, is going to win. That's what innovation is.”

Indeed, we can see that investment theme in the top holdings at ARKK.

Tesla (TSLA): the electric vehicle maker is currently the largest holding at ARKK, accounting for 8.9% of the fund’s weight. In a report earlier this year, Ark Invest projected a share price of $4,600 for Tesla by 2026 — representing a potential upside of over 400% from where the stock sits today.

Zoom Video Communications (ZM): shares of this video communications company tumbled nearly 40% in 2022, but Ark Invest sees a glorious revival in the not-too-distant future. Ark Invest released a research report in June, outlining how Zoom’s share price could reach $1,500 in 2026. Zoom is the second largest holding at ARKK with an 8.3% weight.

Roku (ROKU): Roku — the third largest holding at ARKK — is another beaten-down name. Shares have fallen 65% in 2022. But the company continues to capitalize on the secular trend of on-demand video streaming. In Q2, Roku added 1.8 million active accounts, bringing its total active accounts to 63.1 million.

Pour your portfolio a glass of recession resistance

Fine wine is a sweet comfort in any situation — and now it can make your investment portfolio a little more comfortable, too.

Ownership in real assets like fine wine could be the diversification you need to protect your portfolio against the volatile effects of inflation and recession. High-net-worth investors have kept this secret to themselves for too long.

Now a platform called Vinovest helps everyday buyers invest in fine wines — no sommelier certification required.

Vinovest automatically selects the best wines for your portfolio based on your goals, and it tells you the best times to sell to get the best value for your wine.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

What to Read Next


The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.