- All it takes is for the S&P 500 to be down
around 20% year-to-date,
and you'd think the world was about to end.
I'm now being told that we are officially in a bear market,
Call me crazy, but I barely even noticed.
As someone on YouTube who makes videos about investing,
you'd think I'd be on top of this sort of thing.
I mean, to be a good YouTuber in this space I'm supposed
to do two things.
Number one, I'm supposed
to create thumbnails where I make dumb faces
(bubbles popping) to incite some sort
of reaction out of you.
And two, I'm supposed to create videos where I tell you
about the current market news and spin it in a way
that'll essentially play into your fears to freak you out.
But unfortunately, I can't bring myself to do those sorts
of things because, A, there's no reason to be freaking
out about anything, and B,
making those ridiculous faces feels just as stupid
to do as they look.
For some of you,
it might be your first time experiencing a real decline
like this so I can understand your concern.
For the rest of you who have been here before,
but are still acting like it's your first time,
or you didn't see this coming, grow up.
Here are some quick thoughts that I have in regards
to the current stock market decline.
I don't give a what anyone tells you.
No, you don't have to be up to date on what's happening
in the markets on a day to day basis if you are still
in the accumulation phase of investing.
(foot stomps) - What?
- Over the past few years, we've all become conditioned
to think that we should be engulfed
in the current market news every single day.
It's like we're insects that are attracted to the light.
We just can't help but fly into that bright,
shiny bulb even though we know that it's just going to end
up zapping us.
There isn't anything inherently wrong with paying attention
to the latest stock market moves, but when it starts
to impact your emotional state,
and cause you to want to mess
with your investment portfolio, then that's a problem.
- So, you're telling me there's a chance.
Yeah!
- We've turned investing in economic news into a form
of adult entertainment that I compared to mental bation.
When you consume it, you basically turn into that guy
that sits inside of his house on his couch in his underwear
by himself with his hands down his pants.
- I desperately want to make love to a school boy.
- That's a very sad and awkward image that I just got
in my head.
Stop watching videos and reading news articles on everything
that's happening on a day to day basis because it's messing
with your head.
Stop paying attention to it all,
and go do something more productive because you clinging
onto the current market fluctuations is
about as useful as me washing my car,
then turning around and driving it straight through the mud.
The longer you invest, the more you realize
that this time is not different in regards to the fact
that we are in a bear market.
It is different in the sense that the names, faces, and plot
of the story have changed.
But the overall theme is exactly the same
as the last time the market has had a large decline.
We went through bear markets in 1956, 1961, 1966, 1968,
(bell dinging) 1973, 1980, 1987, 1990,
2000, 2007, 2020, and now of course in 2022.
For the record, yes, I did memorize all of those dates,
and now I forget them all.
There's Molly as well, taking a nap.
Back to the video.
Do you see a pattern?
That's 12 bear markets over the past 64 years,
and they're never gonna stop.
This sort of thing is
about as common as my dog taking a dump
in the backyard every morning.
And if you can't handle that many more to come,
then you shouldn't be managing your own money.
By the way, please help support this channel and my dog,
Molly, who's the one that takes a dump every morning
by hitting that thumbs up button.
As much as I despise these scummy financial professionals
out there, at least they'll prevent you
from doing childlike things
with your money because they're greed heads who
only get paid when your money is
in their grubby little hands.
When you invest for long enough, you start to realize
that what's happening right now is pretty irrelevant
in the grand scheme of things.
The stock market is on the decline just so
it can eventually be on the rise again.
The federal reserve is increasing interest rates just so
that they can eventually lower them again.
The federal reserve puts more money into the system so
that they can eventually turn around and pull that money
back out of the system.
Inflation is on the rise just so
it can eventually fall again in the same boom and bust cycle
within the economy in the stock market will continue to play
out over and over and over again for the rest of your life.
The individual stocks that you own don't have to recover
back to 2021 levels, nor should you expect them to.
I know it's easy to play these psychological games
with ourselves about how stocks are on sale right now,
but most of these speculative ones continue
to be overvalued.
Yes, they're still overvalued, even after dropping at 60,
70, and 80%.
Forget the stock price of anything over the past couple
of years because those numbers were basically fake.
So much money was flowing like a cheap box of wine that
it went towards the highly speculative stocks
for very poorly run businesses and drove up asset prices.
And some of you unfortunately bought into that hype.
Now that cheap, easy money is being sucked out
of the system. (bubble pops)
A lot of them have no business being in business.
So, it's going to be fun to watch a few of them either close
down or get bought out by larger, more stable companies.
And if they don't go out of business,
then they're going to continue diluting shareholders
to gain access to more cheap money
because debt is becoming way too expensive to borrow.
Contrary to what many people on YouTube might tell you,
issuing more shares
and diluting current shareholders is not a good thing 70
to 80% of the time.
- It's science.
- For the record, I just made that number up,
but it's pretty darn high.
Most of the time, the company behind that stock
that you own, isn't using that extra cash
in a productive enough way to make up for the loss
that you as a shareholder is seeing today.
They're better off just closing their doors instead
of stringing you along for the next 15 low growth years
until you realize that it was a mistake to buy that stock.
By that time you've wasted 15 years of investing
in a trash company.
When you could have taken the well proven route
of just putting your money
into a low cost total stock market, or S&P 500 index fund.
If you enjoy buying individual stocks,
just be careful because there's a lot of smoke
and mirrors right now.
And please for God's sakes, stop buying stocks
because your favorite YouTuber mentioned them.
I can promise you those dweebs don't know any more
than you do.
No names please.
If you had categorized investing as quote unquote fun
over the past few years, then you're doing it wrong,
and you are part of the problem.
Despite what we are subconsciously led to believe
through investing apps like Robinhood,
investing money should not be entertaining.
If you want entertainment,
then go play Catan or Hungry Hungry Hippo.
It is all fun and games when the market is going up like
it has been over the past 12 years,
but as many of you are feeling right now,
it's not very entertaining when the market is declining.
This is not easy, nor should it be entertaining.
Charlie Munger said, "Just remember one thing.
None of this is meant to be easy,
and anybody who thinks it's easy is stupid."
If investing were easy, entertaining,
and the outcome was based on how hard you tried
to pick winning investments, then everyone would be rich.
And I have a plot twist for you, they're not.
The good news about the market going down like
it has been is that you can use this as an opportunity
to learn more about yourself and become a better investor.
Like I said before, bear markets, crashes,
and recessions are a part of the cycle and will continue
to play out from now until the end of eternity.
Each one you go through hardens you a little bit more
and prepares you for the next one,
but only if you allow yourself
to learn the proper lessons each time.
Keep in mind that every bear market crash
and recession look a little different.
What was a hedge against it all in the past,
might not work out the next time around.
But one thing that will work in every one
of those scenarios is you being able
to keep your cool if you can intentionally learn
to cope when the rough times come.
Being a resilient investor no matter the situation
will serve you well,
and the way to be a resilient investor is to put your money
into things that you actually understand and believe in
during the good and bad times.
It also helps if you just assume the worst
and invest accordingly.
I've mentioned in previous videos that when planning
(numbers ticking) for my future returns,
I expect 7%.
But knowing that it could be lower, I invest way more
(numbers ticking) than I need to just
to be on the safe side.
I also invest in something I know that I can hold onto
and continue investing in no matter what,
and that of course is boring index funds.
It doesn't make for creating super exciting content here
on YouTube, but I don't do things
with my money just so I can make content because that's
about as irresponsible as it gets.
Whoring out every aspect of my life for views-
- Why don't you go back to your home on whore island?
- is something that my grandpa taught me to never do.
He also taught me not to where I eat,
which has been pretty solid advice as well.
Take everything you hear with a grain of salt
during a bull market.
Everyone looks like a genius when things are on the rise.
So, it can be easy to buy
into information people are feeding us.
Stock picking, cryptocurrency, or some random startup
that solves a useless problem,
can all sound extremely enticing
when things are going super well in the economy.
Assume that no one has your best interest
in mind when they're pumping something
up because they most likely don't.
Now I have seen so many shady people here on YouTube popping
up everywhere over the past couple of years,
and it makes me shake my head just because you watch me
or anyone else on this platform doesn't mean we are geniuses
or know what the heck we're talking about.
We are all regular people like you.
We just happen to be the ones who picked up cameras
and started making videos.
I've talked to every day average YouTube viewers
who have lost 100s of 1,000s of dollars following some
of the biggest channels in this space,
and it really makes me sick.
Once again, no names please.
But because they're not public figures, you don't hear
from these kinds of people, which is unfortunate.
I actually tried to get a couple of them in a video,
but they're too ashamed to put themselves
out there publicly,
and I don't blame them because they've followed some
of these stock picking YouTube channels,
and they lost a load of money.
Make sure to hit that thumbs up button, please.
The private financial independence community is now
open to everyone.
In the description, I'll have a link to apply
and also links where you can help support
this channel as well.
I'll see you in the next one, friends.
Done.