2022 has been far from a smooth ride for NIO (NYSE: NIO) stock. The Chinese electric vehicle manufacturer grabbed headlines with its monumental 1,100% rise in 2020. Yet since then, it’s struggled to keep up the impressive momentum.

The NIO share price is down nearly 50% this year. Across the last 12 months, the stock has fallen 54%.

So, where will NIO stock go next? Should I be steering clear of it? Or at $17 is this an opportunity for me to grab some cheap shares? Let’s find out.

Latest results

Yesterday saw the release of the firm’s Q2 results. Within the update, there were encouraging signs. Vehicle sales rose by 21% year on year to $1.43bn, and 3.5% compared to Q1. On top of this, total revenue rose by 21.8% compared to Q2 2021 to reach $1.53bn.

Despite this, NIO shareholders will no doubt be focusing on the fall in gross profit. This dropped 14.8% on the year. And compared to Q1, the figure fell 7.4%. What will also be of concern is the firm’s net loss, which widened by a massive 369.6% against a year ago.

2022 struggles

These results paint an accurate picture of NIO’s struggles this year as rising inflation across the globe has pushed up costs. As the business said itself, 2022 has been plagued by “tremendous challenges and cost volatilities.”

NIO has also faced a string of supply chain issues. With China in a continuous battle to eliminate Covid infections, the firm has seen its production halted for stretches.

Despite this, it still predicts it will deliver between 31,000 and 33,000 vehicles in the third quarter, showing it has no plans to slow down.

Electric transition

Even with the above, the biggest issue I see surrounding NIO is the inevitable transition to an electric world, which will have both its benefits and drawbacks.

First, there’s no doubt that governments across the globe will magnify the emphasis placed on the transition to renewable energy. This has already been taking shape. And with the Russia-Ukraine conflict proving it, a reliance solely on conventional energy sources is unsustainable.

For NIO, this is clearly good news. As electric cars become more mainstream, hopefully, the business will see demand for its vehicles increase.

However, this does also alarm me. That’s because I can see a surge in competition in the years ahead as established manufacturers accelerate in the attractive EV market. NIO is expanding in Europe, which should provide the firm with a boost. But how the Chinese firm fares in what’s set to become a saturated market is of concern to me.

Where next?

So, where does the business go from here? And should I be buying NIO stock?

I won’t be buying today. As inflation continues to rise this may further hinder NIO’s operations. And despite it having unique selling points such as its battery-swapping technology, I’m not confident in judging how NIO will stand up against the unavoidable competition. Its share price is low, but right now, it’s not for me.

The post After its latest results, where does NIO stock go next? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It’s been a poor year for Scottish Mortgage (LSE: SMT) shares. The investment trust has been one of the top performers over the past decade, returning a whopping 450% to shareholders within this time. However, as inflationary concerns continue to bite, the stock has fallen nearly 45% across the last year.

So, is this fall a chance to buy Scottish Mortgage shares? I believe so. Here’s why.

Delving deeper

Let’s start by taking a closer look at why Scottish Mortgage has fallen in recent times.

The main driver behind this is inflation. Rising rates have seen global markets being pushed downwards in 2022. And with rates in countries such as the UK looking like they’re unlikely to slow down anytime soon, this has seen the Scottish Mortgage share price suffer.

During tough times the worst affected assets are growth stocks, which the trust focuses on holding. Due to their volatile nature, investors tend to turn their backs on such investments, instead opting for ‘safer’ alternatives.

Scottish Mortgage’s top holdings include the likes of Tesla and ASML, which have fallen 30% and 41% this year respectively. With this in mind, it’s clear to see why the stock has seen its price drop.

Is now the time to buy?

With that said, does it open the door for me to grab some cheap shares? After all, I think the trust has plenty of positives that make it a buy.

Firstly, Scottish Mortgage’s management investment style aligns with mine. And by this, I mean buying for the long term. The managers say performance is measured over a five-year+ timeframe. Therefore the volatility we’re currently experiencing could be seen as an opportunity rather than an issue.

While past performance is no indication of future returns, the last five years have seen Scottish Mortgage return 82% to its patient shareholders, highlighting the strength of long-term investing.

What I also find attractive is the diversity this single investment offers me. Buying Scottish Mortgage shares means I get exposure to over 100 companies, including over 50 unlisted businesses. And its cheap ongoing charges of 0.32% are an added benefit.

But there are a few factors that could drag its share price down in the months ahead.

To start, inflation looks like it’s set to continue to rise for the foreseeable future. This has been the main catalyst behind the trust’s downfall, so I wouldn’t write off the stock falling further should rates continue to spike.

Scottish Mortgage also has a large weighting to China. And with the country experiencing ongoing Covid struggles alongside a property crisis, it may be a while before we begin to see the extreme growth that we’ve seen in the Chinese economy in years gone by.

I’d still buy

Despite these issues, I’d still buy Scottish Mortgage shares today and hold for the long haul. The trust has proved it can return hefty profits to shareholders. And while in the short term China may experience further issues, I think that the stock’s weighting to the world’s second-largest economy could turn out to be a winner in the future.

The post Scottish Mortgage shares are down nearly 45%: is it time to buy? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended ASML Holding and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Scottish Mortgage (LSE: SMT) share price has taken a beating over the past year, down 33%. With inflationary pressures causing a weak economic outlook, investor confidence in stocks such as Scottish Mortgage has waned in 2022.

The investment trust has been a top performer over the past decade. And despite a 52-week low of 670p, the Scottish Mortgage share price is currently sitting at around 900p. Here’s why I think the stock could be a great long-term addition to my portfolio today.

Scottish Mortgage decline

As mentioned, this year has been nothing to write home about for Scottish Mortgage. With inflation spiking globally, including 10.1% and 8.5% for the UK and the US respectively, the trust has been in the firing line of this.

With a focus on growth stocks, some of its top holdings have seen large losses as investors have shied away from such businesses.

Its tech-heavy focus has also fuelled this downfall as the sector has seen a market correction this year. Combined, this has driven down the stock’s price.

Not all bad news

Despite this, it’s not all bad news for Scottish Mortgage.

For a start, the last month has seen the stock rise 13%, clawing back some of its recent losses. This could be a sign that investors are beginning to gain confidence in the trust once again.

Yet more importantly, what’s crucial for me is Scottish Mortgage’s long-term outlook. Sure, it’s had a tough year. However, management highlights that performance is judged over a five-year stretch. And therefore, short-term volatility is less of an issue to me. While past performance is no indication of future returns, the last five years have seen Scottish Mortgage shares rising 114%. Pretty impressive.

As a retail investor, I also deem the range it offers my portfolio to be vital. With one investment, I get a slice of stocks from a variety of sectors and countries.

What this essentially does is help offset risk. By owning a slither of each stock through the trust I’m avoiding the riskier play of buying its holdings, such as ASML, directly.

One issue I do have is its relatively large weighting in China. The nation recently reduced its medium-term lending rate by 10 basis points as data revealed a slowdown in consumer demand. With cracks starting to appear in its economy, this could spell bad news for Scottish Mortgage.

However, I still have faith in the Chinese economy’s potential to produce the ‘next big thing’. Scottish Mortgage has an eagle eye when it comes to finding high-growth companies that produce juicy returns.

I’m still buying

So, despite the near-term issues it may face, I’d still buy the shares today. I think from a long-term perspective its weighting in China has the ability to bear fruit. Add this to the diversity it offers my portfolio, and I’d happily open a position in the stock.

Trading at around the 900p mark, I’d buy Scottish Mortgage shares today and hold for the long run.

The post The Scottish Mortgage share price has suffered. Here’s why I’d still buy! appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended ASML Holding. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

After its incredible 1,100% rise in 2020, NIO (NYSE: NIO) stock has hit the brakes. While 2021 saw a sharp slowdown in growth, 2022 has seen the stock pegged back by 36%. In the last 12 months, it’s down 45%.

This isn’t good news for NIO investors who, following 2020, may have thought the Chinese electric vehicle manufacturer was about to follow in the footsteps of rival Tesla.

However, now trading for above $20, will it be able to stay there and progress further?

The story in 2022

The main reason for NIO’s large fall this year is inflation. Rates have spiked globally. And as a result, many growth stocks have taken a hit. This isn’t uncommon in volatile times like these. And this is because investors look for ‘safer’ alternatives than these riskier equities. To add to this, supply chain issues and China’s zero Covid strategy have also halted production at times this year.

Despite this, the business still posted some strong results in Q1. Deliveries were up 28.5% year on year to 25,768, while vehicle sales rose nearly 25% to $1.5bn. Total revenues also grew by 24.2%. However, gross profit did fall by 6.9%.

Competition

More widely, an important factor regarding NIO stock is the heightened push to an electric world. And I see this taking one of two directions.

Firstly, it’s inevitable that more governments worldwide will expand their emphasis on a transition fuelled by renewable energy. It’s already been seen in the UK with a ban on the sale of petrol and diesel cars from 2030. And I’d expect moves like this to become common worldwide.

For NIO, this is obviously good news. With a larger push comes, hopefully, a rise in demand for its products.

However, it could also spell trouble. As the EV space continues to grow, there will naturally be a rise in competition. More established manufacturers such as Ford have already made bold all-electric commitments. Even higher-end manufacturers such as Porsche have electric vehicles available, while Ferrari has plans for 40% of its sales to be from fully-electric cars by 2030.

While NIO has seen tremendous growth in the past, this could slow as we see more of the competition targeting a slice of the lucrative market.

Despite this, NIO does have tricks up its sleeve that could keep it ahead of the curve. For example, its battery-swapping technology allows users to swap empty batteries for new ones in a matter of minutes. Should it keep producing cutting-edge technology like this, NIO may be able to keep ahead of competitors.

Where next?

So, where will NIO stock go from here?

Well, while it may be able to continue its impressive growth due to its innovative nature, I won’t be buying NIO stock today. As inflation continues to bite, I think it could slip further this year. With competition also looking like it’s going to heat up, this is of further concern for me. I’ll be keeping NIO on my watchlist for now.

The post NIO stock is above $20. Where will it go next? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The last month has seen the stock recover some of its losses, rising 8%. With the shares trading for around 815p, is now the time to buy?

A tough year

The main reason for Scottish Mortgage’s underperformance this year is due to the type of stocks it holds in its portfolio. The trust targets high-growth companies, including names such as Tesla, Nvidia, and Tencent. And with inflation rising globally, 2022 has seen these stocks suffer.

Firstly, this is because the economic uncertainty caused by inflation tends to see growth stocks take the hardest hit as investors move their money from these riskier investments to ‘safer’ value stocks.

Secondly, to combat inflation, interest rates are pushed up. With growth stocks tending to borrow big, in order to grow, this also means the debt on their balance sheet becomes tougher to pay off. Combined, this has seen the Scottish Mortgage share price suffer.

Not all bad news

Despite its struggles this year, I’m still keen on Scottish Mortgage shares.

To start, instead of looking at the dip in its price as an issue, I’m looking at it as an opportunity. The trust’s management team makes it clear that Scottish Mortgage aims to maximise returns over a five-year period. It uses the FTSE All-World Index as a benchmark for this. And safe to say, it’s outperformed this in the latest five-year stint.

As a long-term investor, this suits me. This focus nullifies any short-term headwinds. And the trust has proven this by surviving multiple crises such as the dotcom bubble and the 2008 financial crisis.

I am also drawn to Scottish Mortgage because of the diversity my portfolio receives from a single investment. The trust has a global portfolio, including unlisted shares, all for a cheap ongoing charge of 0.32%. For me, this is perfect.

One issue I see is its weighting in China. This makes up around 20% of Scottish Mortgage’s holdings. And with the country still struggling to keep a lid on Covid-19 cases, this could be an issue. We’ve seen the impact this has had so far reflected through supply chain concerns. Should this continue, this could drag the Scottish Mortgage share price down.

However, over the long term, I think its Chinese focus will bear fruit. It’s the fastest growing economy in the world. And I have full belief in the management team to pick out future winners. While it may see the trust suffer now, from a long-term perspective this doesn’t bother me.

At 815p, I’d happily snap up Scottish Mortgage shares. Its investment strategy aligns with my needs. And the diversity it offers is a great boost for my portfolio. Trading for nearly half of its 52-week high, I’d buy Scottish Mortgage now and hold for the years to come.

The post At 815p, are Scottish Mortgage shares a buy? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Despite a small rebound last Friday, 2022 has seen Scottish Mortgage (LSE: SMT) shares plummet by over 40%. The investment trust had been a top performer over the past decade. And in 2020 it showed its resilience, rising over 100% despite the impact of the Covid-19 pandemic. Yet with inflationary pressures this year denting investor confidence, the trust has taken a hit.

As a long-term investor, I think this fall is an opportunity for me to add the trust to my portfolio this month. Let’s find out why.

Why have SMT shares sunk?

The main contributor to the demise of the Scottish Mortgage share price is the performance of its top holdings. This includes companies such as Tesla, Nvidia, and Tencent. With these stocks down 43%, 52%, and 21% this year, respectively, this has reflected negatively on Scottish Mortgage.

The fall of these stocks is part of a wider decline seen among growth stocks. Scottish Mortgage has a large focus on such companies. And as global inflation continues to surge, it’s having a negative effect on these firms. This is largely because, in volatile times, growth stocks tend to be hit the hardest as investors switch their funds to ‘safer’ value stocks.

Long-term vision

So, it’s clear to see that 2022 has been tough for Scottish Mortgage shares. However, I’d still buy the stock today as a long-term addition to my portfolio.

Firstly, I like it due to the diversity it offers my portfolio. The trust has over 100 holdings. And of these, over 50 are unlisted shares, such as SpaceX. This is an opportunity for me to access a variety of opportunities under a single investment.

Further, while inflationary issues are wreaking havoc in the market now, this is a short-term concern. Scottish Mortgage’s management is keen to note how the trust focuses on returns over a five-year period. And while past performance is no indication of future returns, the last five years have seen it return 84% to shareholders. This highlights its long-term potential.

Around a fifth of the trust’s holdings are Chinese. And with ongoing Covid concerns, this could pose a threat to the Scottish Mortgage share price.

However, as the fastest growing economy in the world, and therefore ample opportunities, I think its large weighting to Chinese shares will pay dividends in the long run.

I also have faith in the management team of Tom Slater and Lawrence Burns. Both have played an active role in the trust’s success in years gone by. With a keen eye for investing in companies early, as seen with Tesla, I think these two are more than capable of placing Scottish Mortgage in a position to succeed. 

As such, I’d add the shares to my portfolio today. The diversification that it offers is something I like. And while it may face issues in the near future, it’s proved over time it can reward shareholders. Its heavy weighting to China, coupled with management’s eagle-eyed investment style, could also lead me to see some healthy returns over time.

The post Why I’d buy Scottish Mortgage shares in July! appeared first on The Twelfth Magpie.

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• Most Britons miss out on the first 20 years of investment compounding. Here’s how a Junior ISA or SIPP can change that

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Scottish Mortgage (LSE: SMT) share price is down 45% in 2022. I’ve been a keen advocate of the investment trust in the past. And, despite the fall, I remain one. Here’s why I’d buy Scottish Mortgage today as a long-term addition to my portfolio.

Scottish Mortgage share price history

In a year where many stocks suffered, Scottish Mortgage bucked the trend in 2020 with returns of over 100%. This impressive growth slowed last year, with the stock rising just under 5%. And since the turn of 2022, the trust’s share price has slowly fallen.

The most important reason for the trust’s fall is due to the performance of its top holdings. This includes Moderna, Tencent, and Amazon. And with these stocks down 46%, 16%, and 38% this year, respectively, it’s clear to see why Scottish Mortgage has suffered.

It also has a focus on growth stocks. As global inflation continues to rise, this is having an impact on these firms. This is because interest rates are raised to counteract inflation. And, therefore, the debt these firms have to fund their growth becomes more difficult to pay off. To make matters worse, growth stocks tend to be hit the hardest during these times as investors move their money to ‘safer’ value stocks. For Scottish Mortgage, this is clearly bad news.

Why I’m still buying

Despite these issues, I would still buy the stock today.

Essentially, one of my main attractions to Scottish Mortgage is the diversity it offers my portfolio. The trust invests in a range of companies. And this diversification offsets risk and exposes me to opportunities that I couldn’t attain using my own funds. Scottish Mortgage can also allow me to gain access to unlisted shares, such as SpaceX. Add this to its cheap ongoing charges of 0.34%, and I’m only further attracted to the trust.

I also think the above are short-term concerns. The trust’s management highlight how Scottish Mortgage focuses on returns over a five-year period. And the trust uses the FTSE All-World Index as a benchmark. Over the last five years, it has returned 67% to its loyal shareholders. While past performance is not an indication of future returns, the trust has also navigated some challenging crises over time. An example is the dotcom crash of 2000, and its resilience and ability to bounce back from crises like these is why I like Scottish Mortgage.

Yet, there are risks surrounding Scottish Mortgage. One of these is the large weighting it has in China. This makes it vulnerable to the potential issues surrounding the country and Covid threats. The possibility of future lockdowns could hurt the stock’s price.

That said, the trust has a track record of investing early in high-growth companies. This has played a key role in its success, with an example being buying Tesla back in 2013 when the firm was trading for just $6 a share.

As such, I’d buy the trust today. As a long-term investor, the above issues do not concern me. And Scottish Mortgage’s diversification and proven resilience lead me to believe this fall in price is a great opportunity. With management’s ability to find high-potential growth stocks, I also think investing now could see me make some healthy returns in the long run.

The post The Scottish Mortgage share price is down 45%. Here’s why I’d buy and hold! appeared first on The Twelfth Magpie.

More reading

• As SpaceX stock plunges below its opening price, is it time to dump Scottish Mortgage shares?
• An AI beast just racked up 80-fold growth and is now a top holding in this FTSE 100 trust
• SpaceX doesn’t pay a dividend. So how come it may help these investors earn passive income?
• Scottish Mortgage shares are now even cheaper after SpaceX’s amazing stock market debut!
• Most Britons miss out on the first 20 years of investment compounding. Here’s how a Junior ISA or SIPP can change that

Charlie Keough has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Electric vehicle (EV) manufacturer NIO (NYSE: NIO) has been one of the best-performing stocks over the past few years. For example, the stock saw monumental gains in a Covid-struck 2020, rising over 1,000%.

However, 2022 has seen the share price plummet 60% as a compiling number of pressures have dented investor confidence surrounding the firm. In fact, since its all-time high back in January of last year, the stock is down a whopping 78%.

So, why has the NIO share price seen such a drop? And does this fall mean an opportunity for me to buy NIO shares? Let’s explore.

Why is the NIO share price down?

Well, the share price has seen a drastic drop for a few reasons.

Firstly, Covid cases in China are skyrocketing. As a result, cities such as Shanghai have entered extreme lockdowns. There are also concerns that similar rules may be applied to Beijing. For NIO, this has seen major disruptions to its supply chain as last month the business announced it had suspended production of vehicles. To counteract the fall in production, NIO increased the price of three of its SUVs. The share price fell 9% on the back of the news, reinforcing the lack of investor confidence surrounding the firm.

Secondly, NIO has seen a fall in price due to the possibility of its delisting from the US exchange. This is because the firm does not meet certain criteria for foreign stocks, most significantly on accounting issues and the Holding Foreign Companies Accountable Act. With delisting now a serious threat, the stock has dropped considerable amounts as a result. 

Wider outlook

With this said, there are positives I see with NIO. As a long-term investor, short-term concerns such as supply chain issues do not worry me. NIO has already begun to speed up production again. And this is seen through the delivery of its new ET7 model. Should this continue, it should hopefully help get the business back on track.

Further, NIO has posted some impressive results in recent times. For its full year, revenues increased 122% year-on-year. While growth is expected to slow in 2022, this highlights the potential of the firm. 

However, concerns such as competition deter me from buying NIO stock. As the EV space continues to grow, it may struggle with its plan for expansion. With more established manufacturers such as Volkswagen making moves in the sector, this could harm the market share NIO sees in the future.

Rising interest rates spell further bad news for it. In uncertain times like these, growth stocks tend to be hit the hardest. Hiking rates also make the debt it finds itself with more challenging to pay off. A continuation of this could see the NIO share price suffer.

What I’m doing

As much as the supply chain issues have impacted its share price, as a long-term investor this does not deter me from the stock. However, what does worry me is the growing threat of delisting. I think this, along with rising interest rates, could see the NIO share price fall further. As a result, I won’t be buying the shares today.

The post The NIO share price has plummeted 60%! Here’s what I’m doing now appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, while the last month has seen the Scottish Mortgage share price regain some momentum, year-to-date the stock has been pulled back by nearly 25%. So, does this fall mean now is a good time for me to add SMT to my portfolio? Let’s explore.

Why is the Scottish Mortgage share price down?

So, why have we seen a reversal in the trust’s fine form in recent times? Firstly, this can be attributed to the rise in global inflation – with an example being the jump witnessed in the US. Rising inflation tends to lead to people switching their money to ‘safer’ value stocks. And given the large weighting SMT has in growth stocks, it’s clear to see why SMT has taken a hit.

As well as this, Scottish Mortgage has a tech-heavy focus. The last few years have seen these stocks explode, meaning SMT has shared the success seen. However, the struggles they have experienced in recent times has negatively impacted the Scottish Mortgage share price.

Long-term approach

However, I have always been an advocate of long-term investing. And I have often used SMT to exemplify this. Therefore, I’m not concerned by the issues above. Management is clear in stating that Scottish Mortgage invests for the long term, seeking growth opportunities along the way. The trust has survived a variety of challenges in the past, such as the 2008 financial crash. And these downturns have not impacted the return to investors seen over the long run.

What I also like about Scottish Mortgage is the diversity it offers to my portfolio within a single investment. The fund’s top 10 holdings include companies such as Tencent and Nvidia. These are companies that, in my opinion, have long-term growth potential. And this, along with the cheap ongoing charges of just 0.34%, leads me to believe the current fall presents a great opportunity to buy. 

With this said, the exposure SMT has to Chinese equities may provide an issue. The pressure Chinese policymakers have been applying to a range of companies may impact the Scottish Mortgage share price should they target businesses in which SMT has an interest. However, this volatility is only short term. And as a fast-growing economy, I think the trust’s weighting in China will prove to be a long-term success.

Is it time to buy?

While SMT may face short-term challenges, I think the trust has the foundations to flourish in the future. Scottish Mortgage has a track record of rewarding investors who are in it for the long haul. And while past performance is not always an indication of the future, I further like SMT due to the diversification it provides me and the cheap fees that come with it. As such, I think the fall in share price is a great opportunity for me to grab some shares.

The post The Scottish Mortgage share price is down 25%! Is it time to buy? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

After a meteoric rise in 2020, the NIO (NYSE: NIO) share price has slumped 57% since then, with the stock currently down over 20% year-to-date. However, yesterday saw the Chinese electric vehicle (EV) manufacturer’s share price spike 8% amid the reveal of a new SUV, set for release in April.

So, with the stock currently trading at a slither of its all-time high, is now the time for me to capitalise by adding NIO to my portfolio? Let’s take a look.

Why did NIO rise?

Let’s begin by looking at why the NIO share price spiked yesterday. This was the unveiling of a new medium-sized SUV, officially named the ES7, announced by Qin Lihong, president and co-founder, on Tuesday. Positioned between the ES6 and ES8, the ES7 is based on the firm’s NT2.0 platform, an electric driving system equipped with nearly 20 assisted driving functions. And, with its release reflecting NIO’s continuous expansion, investors clearly took a liking to this news.

Further, if this release follows in the footsteps of NIO’s impressive delivery figures, then it could provide a boost for the firm. Its latest delivery data showed that January deliveries for 2022 represented a 33% year-on-year increase. This was the equivalent of nearly 10,000 vehicles delivered. As a potential investor, these are all positive signs.

NIO share price concerns

However, there are a few issues I see with NIO. One of these is the regulatory pressure it faces within China. The ride-sharing company Didi Global recently delisted from the American markets amid pressure from the Chinese government. And there is the potential this could happen to NIO.

A further concern for me regarding NIO is rising interest rates. As my fellow Fool Dylan Hood highlighted, inflation data came in at 7.5% year-on-year for January in the US. The Federal Reserve is expected to raise interest rates in March. The picture is also similar in the UK, where rates have already begun to rise.

This is an issue for NIO for a few reasons. Firstly, in uncertain times like these, investors tend to switch their money to more stable value stocks, meaning growth stocks (such as NIO) are the hardest hit. It also means the debt NIO has will become harder to pay off, potentially stunting growth.

As the EV market continues to grow, there is also the issue of competition. While NIO has seen large growth since its IPO back in 2018, as more established manufacturers venture into the space, the firm may struggle to compete. A prime example of this is Ford, which recently vowed to be all-electric by 2030. As these firms potentially gain market share, this could have negative connotations for the NIO share price.

What I’m doing

So, while I think NIO’s potential is clear through its impressive delivery numbers, too many issues currently surround the stock. The continuing pressure being applied by regulators provides a constant threat for it. And rising interest rates will load further problems onto the EV maker. I don’t currently hold any shares of NIO, and due to these pressures. I won’t be looking to add any in the near future either.

The post The NIO share price rose 8% yesterday! Here’s what I’m doing appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.