If You'd Invested $10,000 in Redfin in 2021, This Is How Much You Would Have Today
During the pandemic's height, demand for homes hit levels not seen in years. In 2020, home sales were the highest on record since 2006. This surge in demand and home prices was welcomed by those in the industry, including Redfin (NASDAQ: RDFN), the online real estate brokerage.
Demand was robust in 2021 as well. However, the boom would not last. In early 2022, the Federal Reserve began aggressively raising interest rates to bring down inflation, which reached its highest level in four decades. The rate hikes had ripple effects across interest rate businesses, including residential home sales.
Investors who bought Redfin amid the home-buying frenzy have seen incredibly disappointing returns. A $10,000 investment in the real estate company in 2021 would be worth a fraction of its value today and carries an important lesson about investing in cyclical stocks.
Source Fool.com
