The stock market has been difficult to navigate in 2022. Stocks have been extremely volatile, and this week we saw another growth stock sell off. That's right, growth stocks are going down again. So what should you do next? I have been investing for over 20 years, and I would like to share my thoughts and experiences to help you navigate these turbulent waters.
In the video below, I discuss a variety of topics, including my thoughts on which stocks to buy now. Upstart (UPST -0.42%), which is one of the stocks covered, is a hypergrowth fintech company that harnesses the power of artificial intelligence to disrupt conventional banking loans and replace the FICO credit score. Upstart's platform uses over 1,500 variables to originate lending decisions for personal and auto loans. The company has been increasing its partnership network, and the total addressable market for auto loans alone is over $725 billion annually. Considering its guidance is merely $1.5 billion, the possibilities for growth are considerable.
That said, Upstart does have several shorter-term risks to consider. I believe the stock will remain volatile and trade in a range for some time. This creates an opportunity for long-term investors to accumulate shares. Here are three Upstart risks to consider:
- Zillow Group (ZG -2.58%) had trouble using artificial intelligence to make estimates on home values. Perhaps Upstart's AI is superior, but as investors, we cannot ignore the possibilities that there could be risks with defaults, especially as the environment tightens.
- Blend Labs (BLND -9.29%) recently reported earnings, and investors got a glimpse of just how bad the mortgage market is right now. Upstart does not rely on real estate transactions like Blend, but personal and auto loans could also be affected by rising inflation and interest rates.
- COVID-related comps have hurt companies like Zoom Video (ZM -0.43%). Could Upstart have a hangover on the way? Upstart keeps crushing it, but at what point will the company suffer from the "tough comps" sickness that we have seen from many work-from-home beneficiaries?
In the video below, I discuss investing psychology, how to manage risk, growth stocks, stocks to buy now, prices to watch, speculative stocks, how I'm handling the stock market volatility in 2022, and much more. Please watch and don't forget to subscribe. Cheers!
*Stock prices used in the below video are from the trading day of April 7, 2022. The video was published on April 7, 2022.