Avoid These 3 Cathie Wood Stocks in April

imageStock Markets21 minutes ago (Apr 14, 2021 03:30PM ET)

(C) Reuters. Avoid These 3 Cathie Wood Stocks in April

Cathie Wood’s contrarian investment strategy may not be ideal for short-term, risk-averse investors with limited funds because most of Wood’s bets require a considerable holding period. So, we think Wood favorites Shopify (NYSE:SHOP), Spotify (NYSE:SPOT), and Zillow (Z), which could witness a pullback in the near term, are best avoided now.Renowned investor Cathie Wood has made her name by betting against market trends. With more than $50 billion in assets under management (AUM), Wood can afford to sustain short-term losses in pursuit of big long-term gains. In contrarian investing, it often takes considerable time for an investment to deliver a desired return on investment. However, retail investors with limited access to capital might be forced to exit their positions in the short run and thus register losses on such bets.

With the U.S. economy making a faster-than-anticipated recovery, some of the most profitable stocks that gained on account of the COVID-19 pandemic have been witnessing a decline in revenues and earnings. Their share prices are declining too. While major billion-dollar businesses have witnessed a short-term pullback amid the impending economic recovery, they are expected to recover once markets stabilize post-pandemic. However, we think investors with limited funds should avoid investing in such stocks in April.

Thus, retail investors with relatively low risk tolerance should avoid Cathie Wood’s top picks Shopify Inc . (SHOP), Spotify Technology S.A. (SPOT) and Zillow Group (NASDAQ:ZG), Inc. (Z), given these stocks’ weak near-term prospects of these stocks.

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Avoid These 3 Cathie Wood Stocks in April

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