welcome back to the sweet life! if you read articles around stock and crypto market news
you may have come across the article that 90 of investors lose money and that's actually 100 true
most investors ignore the warning signs of losing money and they assume that they fall within the 10
that actually make money well in this video let's talk about how we can actually become
part of the 10 that make money and not just assume we're part of the 10 because you know
what assuming does right recently we're dealing with the russia ukraine situation we also have
historically high inflation what does that do that puts downward pressure on the market a little bit
of fear in the market and things like that and when there's fear in the market investors panic
sell and some even take a loss on their investment now this leads me to a question for you have you
ever panic sold in your investments if so why and how much did you lose comment down below and
let's have a chat but even though we panic sell if history repeats itself we'll not only recover
our losses in the stock and crypto market but we'll increase our earnings show a little bit of
green and feel pretty darn wealthy so let's look at the facts on why this is made up the way it is
and then what we're gonna do stick with me because at the end we're gonna talk through the tips that
you must know so you can become part of the 10 to make money and not part of the 90 now i'm gonna
start with stocks this is super interesting we're going to say this is the year column
right here this is going to be the pullback which basically means this is how much is lost within
the year that we're talking about and then over here we're going to talk about the return from the
bottom that's a year later looking at the bottom of the particular year and how well it recovered
that next year so let's go far far back in time i think a lot of us may not have been alive but
if you were hats off to you and thank you for watching the video 1962. so here i have 1962.
that pullback that year was a total of 26 so if you would have sold in 1962 you would have lost 26
what a terrible terrible situation but a year later look at where it comes back to 32.7
return positive in that next year now if you would have dollar cost average which means
you would have kept buying into your investments through that year as it was going all the way
down to that 26 loss you would have had a lot more momentum as it continued back up to that 32 now i
have a lot of videos on this channel that explain dollar cost averaging and the benefit of so-called
buying the dip during this period of time you can check out those videos after we're done with this
one let's jump ahead to 1974. now 1974 was quite an interesting year because that is quite a dip
at 37.6 percent minus 37.6 pullback but look at the return a year later at 34.6 percent.
so it didn't quite return exactly its pullback but in the next years ahead it certainly went
onward and upward quite a bit now i'm gonna go far far ahead to 2002. now that was right after
9 11. so things were kind of shaky but the overall downturn was negative 33.8 percent on the pullback
but then that next year it came back to 33.7 now think about this for a second if you would
have sold at that pullback at that lowest of the lower 33 down man that would have hurt especially
knowing that it would have recovered only 0.1 down from what it was when this whole thing started
so that means you're giving up money when you sell you're losing all that money you don't get to gain
it back where everybody that held on through the storm feeling pretty good afterwards and then from
there it's only up and that's a good thing most recently we have 2018 now 2018 was also a very
interesting year we had a lot of volatility going on in the market but it did drop 19.8 percent
but then that next year look at this incredible surge at 37.1 percent now that's really good so
if you were a 2018 seller at the 19.8 percent you're giving up money the next year at a 30
recovery that's incredible and that brings us to right now 2022 the same type of thing is happening
right so we have 2022 we're down about 13 now this source comes from lpl research and this
is as of march 8. but 13 down we don't know yet what that return is going to look like could it
be 30 could be less but if you look at this don't you see kind of a little bit of an example of 30
plus over these hard turned years 62 7402 in 2018 that right there gets me kind of excited
and it makes me think maybe i should consider investing if i have my foundation set up which
we'll talk about in just a moment so midterm years the corrections are very very usual it's
going to happen it's going to look kind of funny it's going to look a little depressing and your
portfolio could be red especially if you're new to the market but hang on tight and enjoy the ride
because right around the corner could be something good let's hop over to crypto where there's a very
similar situation now i will say cryptocurrency does have a lot more volatility to it so these
swings can be even more stomach-wrenching think about it it's the difference between do i want to
ride this very scary roller coaster or hop on the kitty ride the very scary coaster is going to give
me some thrills more so than the kiddie ride but it's going to feel kind of funny as we're going
down so that's kind of what's going on here look at this 2010 we have 24 days in a bear market at a
94 decline you put your money in you're basically losing it all right but then look what happens
after that sixteen hundred percent up percentage gains after that downturn then we move on to 2017
right so in 2017 we have 14 days followed then by 35 days of a decline of 33 and 39 but then look
at the years after 65 up and 49 up the same deal is going on you have a lot of decline much much
more than the stock market of course but the gains after are like even better look at the
overall summary you have an average of about 89 days that the crypto market goes into a bear mode
which means it's going down it's in a decline 89 days at a 57 decline on average which means that
the gains after averaging 362 percent so those people that are selling on a downturn are the
ones that are really losing out where everybody that just holds on and forgets about their money
ends up seeing a little bit of positivity i think it's important to look at the history and look at
a lot of data going all the way back to 1962 is pretty cool in the stock market and going back
to 2010 that's what we have so far in the crypto market those things are good to know because if
we look at the game book we can be a little bit smarter with how we invest but that brings us to
how do we ensure that we're doing the right thing and not becoming those 90 percent of people
those fools out there that are losing their money we don't want that right we want to be wealthy we
want to live our ultimate sweet life and here are a few tips that you need to know number one never
invest based on a tip so you know here i am as a youtuber giving you tips but no seriously if
you're going to the media or you're going to a youtuber and you're just hearing this hey this
stock is about to explode this crypto is about to explode and all of a sudden you're looking around
and the media is talking about it that is warning flag number one because when the media gets a
hold of something and there's a lot of hype around whatever they're talking about oftentimes it's at
the top of a peak before it's going to experience a pullback it's natural and it happens all the
time so a lot of the people that jump in when the media is hyping it are the ones that tend to get
the most frustrated and the most losses when it comes down to their investments doesn't matter if
it's stocks or crypto to be honest with you and a lot of people just recently experienced this with
the sheba enu token back in october there was a surge of shiba inu went up significantly to
an all-time high everybody was buying into this and then all of a sudden down down down it goes
whereas the people that were researching it before made the most money and the people that bought
it after are right now either flat or slightly positive behavioral finance actually causes this
the recency bias because people only buy when it looks like a lot of people are making money
and unfortunately the factory settings in our brain are programmed in that way where we're
social animals right we like hearing and seeing success of others and duplicating that but the
problem with that factory setting in our brains is it doesn't work well in the stock market
where you're jumping in at the last minute when everybody's hyped it all up and then you're at
the top of the roller coaster which means you get to enjoy the ride all the way down see what
i'm saying so the point of what i'm trying to make is you've got to be careful about the hype
back up a second and say wait a minute is this too over hyped do i need to take a look at this
and see what it's going to look like for the long term or if i do buy in now am i okay holding for
the long term knowing that there's going to be a pullback i'm going to chill and i'm in it for
the long game number two is a lot of people like to make money quick honestly you could probably
make more money risking it all on a casino than trying to use the stock or crypto market
as your way to get rich quick honestly this is not the place to be because there's a lot of
volatility and there's just a lot of short-term problems in both of these markets and i've seen
it time and time again i like to look at building a foundation that you're going to set your
future on think about a house you set a beautiful foundation so the house is strong and it stays up
for a long long time same thing with your wealth building journey got to get that foundation going
and putting all the money in and hoping that it's going to double overnight that's not enough time
for the foundation to settle so you can have a good wealth building house in the future get
what i'm saying the most important thing you need to focus on when it comes down to doing this is
saying i'm going to put this money in know that it's going to go like this it's going to happen
that's going to be the chart that we're going to see for a long period of time there's going to be
days you wake up and it's in the green and then there's days that you wake up and it's in the red
you got to be okay with that there's actually studies out there that say the amateurs that go
in and try to day trade to try to make money in the stock market crypto market while some people
do and those are those cases that kind of get out there in the media and then make everybody
think oh this is easy i'm going to do it too but 90 don't forget that number tend to lose money in
the market and number three is investing money you just can't let go of and that actually ties into
number two because you know you have the gambling situation and what you're trying to do is say hey
instead of paying next month's rent i'm going to risk it in the stock market hope it 10 axes
by the end of the month i'll take my profits pay off my rent for the month
pay my rent for the month and then have some extra cash but then the opposite happens you put your
money in and that's right before something stupid happens in the market down it goes and then you
absolutely freak out and suffer a loss if you're investing money that you can't afford to lose you
shouldn't be an investment in the first place i always look at can i pay off my debt first
in fact you actually tend to get a better return on paying off your high interest credit card debt
before you actually start investing if the stock market in the crypto market
is only growing at about 10 to 15 percent you're actually if you're holding a credit card that has
a 14 or 20 interest rate on it it's better to pay the credit card you're gonna get more of a return
if you pay off the balance and then don't have to deal with that high interest tacking on to your
credit card bill month after month and then if you have no debt especially if you're able to pay off
your cars and pay off your home oh you're in a serious position you're in i think where i need
to give you a salute and say you are a freaking rockstar because if you were at that point you
really have limited to no risk at all you have no debt at all which means you can go on speculative
investments you can go in and invest in the mean cryptocurrency you can go in and start stockpiling
away in the stock market and the best part is you can just put money in there and forget all about
it because of your hard work in the past will now pay you off in the future but think about it this
way there's going to be times that you're going to have bear markets and bear markets means that
the market is declining it's pulling back it's looking ugly it's looking red that's why we call
it a bear market although i don't know why bears are associated with ugly and red i think bears
can be cute but regardless that's what it's called then the flip side of that is called a bull market
bull is when it's going up up up this is when everybody's excited your portfolio is green you're
making tons of money and it's feeling really great but remember this if you can't hang out with the
bears and invest with the bears you'll never be able to enjoy that ride up with the bulls
think about it next video right here subscribe for more and we'll see you on the next video