one of the most common things you'll hear talking about the stock market is that the trend is your
friend it's the whole idea that if things are going in One Direction you probably shouldn't
bet against it then I saw a tweet talking about a solid January could be a good sign for the market
and potentially foreshadow a continued uptick in the months that follow of the five instances was
the S P 500 game more than five percent of January after a negative year The Benchmark index Rose 30
for the year on average so what does this mean should we go all in on stocks right now and just
assume that we're going to see the stock market go up what 30 percent uh in 2023 because we've
had these things happen five separate times let's talk about it because the amount of times that I
see something where you get some momentum going in the overall stock market and you assume that
things are going to continue to go the same way and you want to take a step back and kind of think
what's gone on how have we gotten to this point and should we expect this to continue because
when you look at the market the Kiku key which is the tech heavy NASDAQ ETF is up 17.27 in the past
month after dropping 20 and 2020 too so in this video I wanted to talk about how we got to this
point where stocks were a year ago kind of the the reasoning that we're down so far this year and how
I'm going to play this because if you look at some of these headlines that are coming out we've had
one of the best januaries on record and the past five times we've had these American conditions
set up the Market's gone up 30 but I think it's important to think are things similar to how
they've been in the past or is this a completely different instance when you look at most of the
bear markets that have come in the past 50 years they've been caused by Major catalysts you have
the pandemic you have the.com bubble and now right now it's based off of inflation and uncertainty
so let's look at the things that have pushed the market down in the past year and talk about why I
think that things may not be primed for a rebound like we've seen in this tweet where it says that
we could expect a 30 rise obviously not Financial advice but I'm just giving my thought process and
why I am investing the way that I am and why I'm not deciding to switch into growth stocks at this
point you see some of the headlines on Thursday meta announced a stock buyback which is usually
done during great Economic Times it's a whole idea of lowering the number of shares that are
outstanding and the whole idea is that the market sees this as a positive thing when you buy back
shares that means that everyone's stock price goes up in value and as a result is up 23.75
today when I was recording this video one of the best days that it's had in over a decade so you
see this after some of the negative headlines that have come out from tech stocks in the past
couple months with layoffs uh Revenue problems even meta's earnings report was pretty rough
and you see this and you think maybe the Dark Days Are Over let's talk about how we got to
this point when the pandemic happened you had the economy came to a complete halt people don't want
to spend any money because the uncertainty is so high they have no idea what's going to happen in
the next weeks months years so people are holding on to money to the point where we saw savings rate
sitting at around 30 which is the highest that we've seen in the past 25 years fast forward to
today the savings rate is the lowest it's been in about 15 years at around 2 percent so we've
gone from people sitting on a lot of cash to not having a lot of cash sitting in savings accounts
so what happened the Federal Reserve came out and tried to promote spending the way they did
this is by lowering interest rates to pretty much zero when this happens it's the idea of
borrowing money becomes cheaper and cheaper and incentivizes people to make large purchases that
are going to stimulate the economy and make just the economy continue to run so when we see this
we have a boom in the economy you have a lot of the metrics that show uh buying are going crazy
we see stuff like the used car Trends I'll put this up from January of 2020 up until current day
you've seen that they've started to roll over and fall as we've seen some of the major players like
carvana have some problems recently but it went from in January 2020 the average price for a car
was twenty thousand dollars for a used car and it ballooned all the way up to 30 percent which is or
thirty thousand dollars which is a 50 increase in just a year so people were spending a lot of money
I bought a car I got a fantastic interest rate of three percent but it was above the
valuation that it is currently and I'm assuming that a lot of people are in similar situations
then when you look at housing which is another great way to see how people are spending money
on major purchases you see that the housing prices went up significantly uh in the first
quarter of 2021 the median house price was around 370 000 and in 2022 that number was
up to almost four hundred and thirty thousand dollars so people were trying to spend money on
these major life purchases because mortgage rates were historically low then you get to the point
where interest rates have been so low for so long that inflation is going to start rearing its ugly
head when you have the cost of borrowing so cheap money is just getting printed at a inflated rate
and now we get to the part where the party has to end eventually we had an election year in 2020 uh
in 2021 and as a result the Federal Reserve which is not linked to one specific party didn't want to
burst the bubble you don't want to be the one that pops the bubble that's been uh kind of keeping the
economy going for this long time but eventually it had to go and now we've gotten to the point
where the Federal Reserve and Jerome power are the most influential people when it comes to
market conditions right now because during that time interest rates have had to climb steadily
to try to come back to this record inflation which is sitting around seven percent that's
not sustainable so you have to do something about that but when that happens it causes a lot of the
growth stock inspected of stocks to tank because a lot of these companies are not profitable what
that means is that they're going to continue to borrow money against their existing business to
try to get to the point where eventually they're going to be profitable so no matter what they're
going to be borrowing money and when the price of borrowing money goes up that is something
that the market is not going to like if you look at the speculative stocks in 2020 up until the
end of 2021 you see a lot of these stocks that were not profitable that people were betting
on eventually becoming profitable but now the inflation and interest rates are so much higher
those have not been good bets for the past year on Wednesday the Federal Reserve came out and
announced another quarter percent increase in rates and they said that they don't expect any
rates cuts for uh the rest of this year when you see this you expect that to be a negative thing
Wall Street as a whole has this habit of spinning whatever story that comes out in whatever way uh
the general public or the Insiders want it to go you can see a headline like layoffs for a normal
person if you saw that say apple was laying off 10 000 people you would assume the stock price
would go down now Wall Street can spend that in a way where they are lowering their costs and
their margins are going to increase so they can spin it in whatever way they want based off the
market conditions and the response that we saw in the market the past two days the overall Market's
expecting that there's actually probably going to be a rate cut or the inflation numbers are
going to go down to the point where they're going to have to change their tune and eventually have
a rate cut by the end of the year so that's what the Market's betting on here's why I don't think
that I'm going to be betting on that for the long term if you believe that's going to be happening
speculative stocks may be the way to go I am not ready to do that I'm going to stick with
my recession-proof stocks because I don't think the worst is behind us at this point
the reason I think that is who knows what's going to happen I think when the market is going in one
certain direction all it takes is one negative number to come out and people are going to be
spooked especially with the record January that we saw with the NASDAQ being up 17 in the month the
sell-off is probably going to be pretty aggressive when it does happen so I'm not ready to make the
full switch from dividend stocks over to the growth stocks that's just my personal opinion
I'm very curious on what do you think is the best play for the next 12 months and if you think that
these safer stocks are still the way to go so right now I'm going to continue the course that
I have right now when it comes to the dividend stocks these are stocks that do well if the market
goes up or goes down but it does better when the market goes down because the dividend payout the
yield is going to increase which means I'm going to be able to buy stocks my favorite stocks at
a discount that's what I've been preaching for the past year and I've been talking about
the dividends Noble I'll link that video up above right now but when I look at my top five Holdings
they're the dividend stocks I have some of the big hitters when it comes to Tech and apple and
Microsoft and they're in the top five in my Holdings so I don't feel the need to make a
drastic switch whether that be selling someone my underperforming stocks or over performing stocks
even for that matter and buying into growth stocks I have some exposure to the tech heavy markets
when it comes to my NASDAQ ETF QQQ so I've been able to benefit from the stock market recovering
in January but when I look at my portfolio as a whole probably 75 of it is still sitting in
dividend stocks I'm going to continue to keep that going forward until something drastic changes yes
I may have missed the bottom but I'm betting on the fact that we're going to have another
downturn in 2023 before things recover for good I'm very curious to hear what you guys
have to say about the market conditions and if you think it's ripe for a recovery did we
see the bottom already because historically when we do see the bottom stocks rebound aggressively
it's kind of like a slingshot even if I've heard it described in many ways it goes down
pretty aggressively you're pulling it you're pulling it and when things eventually hit the
bottom it releases and it goes Skyward and the recoveries are very sharp and violent and a good
way usually when Things Fall they fall fast but when they come back they recover just as fast if
not faster so you want to be in the market for when that happens I just don't think it's time
for me to switch to the growth stocks because I think there's too much risk involved in it
when you look at your portfolio you have to think about where you're investing and why in
my retirement account it is for the next 40 years I'm not worried about how the market conditions
are going to do for the next two to five years is 40 years in the future so I do have more growth
stocks in that portfolio but when I look at my dividend account this is something that
I'm hoping to buy a house with my partner in the next year and a half to three years if I was wrong
and went all in on growth stocks my portfolio is going to take a beating and as a result that may
hinder or delay my progress of being able to buy a house so I think it's really important to look
at the portfolio that you have because if you have a time Horizon of 40 years yeah you can make a bet
on picking the bottom and if you're wrong it's not going to be the end of the world but if this
is a more short-term portfolio and you are wrong it's going to really knock you back a couple years
and your progression and that's what I'm trying to avoid at all costs and if if I'm wrong and
the stock market continues to go up my retirement account is going to look beautiful but my dividend
account is still going to do well because I do have money in the market and that's the whole
point of not trying to time it it's not that I'm selling all my stocks and waiting for the market
to fall further so I can buy back in I'm just keeping my money in the market but I just am not
in the most volatile stocks out there so if things go up I'm not going to make the max profits that
some people may make out there but I think the market might fall further before it goes back up
my name is Andy if you made it this far please hit that like And subscribe button
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