ARK's Cathie Wood: Big Shift From Bonds to Stocks Is Coming

Wood does, however, expect interest rates to rise and the yield curve to continue to steepen until the Federal Reserve is forced to raise short-term rates. Among the potential risks she's watching: the velocity of money, which is a measure of the turnover of money.

It is sharply down from a year ago and has flattened out recently, but if it shoots up amid the substantial increase increase in the money supply — Wood references M2, which includes cash and checking deposits, savings deposits, money market securities, mutual funds and other time deposits — there would be inflationary ramifications.

Wood is also watching the credit default market, which has been flat and has not seen spreads narrow along with the decline in credit spreads. 

'Disruptive Innovation'

As expected from the head of a company that focuses on the companies involved in "disruptive innovation," Wood said, "There is no turning back from innovation" even when workers, staying at home during the pandemic, return to the office. 

"All newfound services will still play an important role [and] anyone going back to work will continue to find new uses for new technologies" that had been "turbocharged" because of the pandemic, she explained.

That focus on companies involved in disruptive technologies, including Tesla, catapulted the ETFs of ARK Investment Management to more than double in price in 2020 — its Genomic Revolution ETF (ARKG) roughly tripled in price — but they are now attracting short sellers.

Bloomberg reports that short interest in the firm's ETFs has been spiking with short interest in the ARK Innovation ETF (ARKK), jumping to an all-time high of 1.9% from about 0.3% a month ago.

— Check out Why Ark CEO Cathie Wood Is Trouncing Rivals on ThinkAdvisor.