Investing During Recessions - How Should Investors Prepare?
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- Опубликовано: 30 июн 2024
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00:00 - Introduction
01:22 - Recessions and the current environment
03:28 - Timing the market
05:03 - Safe havens
06:15 - Sector rotation
07:16 - Why recession-based investing is misguided
09:33 - 1) Review risk tolerance
10:46 - 2) Review risk position
11:53 - 3) Take advantage
12:28 - Conclusion
If you'd like to support the channel, you can do so at / theplainbagel :)
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - Richard is not responsible for investment actions taken by viewers. Please seek out a registered advisor if you require assistance (while Richard is a registered portfolio manager at WDS Investment Management, he does not provide advice through The Plain Bagel, which is not affiliated with his employer).
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Bro Milton Friedman the father of the modern sweatshop?
Idiosyncratic risk? I like your funny works magic man
I was wondering if you could do a overview of your day Job, Thank you
Thank you for another great video, Richard. It would be interesting to hear in one of your next videos what your thoughts are about tilting towards Small Cap Value. And about factors in general.
If something seems too good to be true, then it probably is🔥.I don't know who, but someone actually needs to hear this, you've got to stop saving all your money. Venture into investing some, if you really want financial stability
This channel should be included in high school curriculum for grades 11 & 12.
I'm actually going to be using that way (advanced ESL classes)...
High school is such a waste. Every student should learn nutrition, exercise, conversation, budgeting, finance, car maintenance, home repairs, and basic options trading.
@@Smoove_J No.
It's interesting how financial literacy is no longer taught in most US schools
As someone who teaches high school, they’d have to care first. 11th graders have no money of their own (usually) and thus have no reason to care when great information is in front of them. They won’t pay attention until it affects them, or they have jobs of their own. The apathy is off the charts no matter how riveting or valuable the content is.
Federal Reserve may soon lose control of interest rates, claims Heresy Financial. This comes as a result of the United States government's intention to embark on a $1 trillion borrowing spree. This might cause the banking sector to lose so much liquidity that rates spiral out of control and are no longer in the control by the federal reserve. I'm sorry to say that despite investing, I lack the mental capacity to evaluate each company's performance and decide whether or not now is a good moment to acquire stocks. My reserve of $650K is being wiped out by inflation and the recession. Sincerely, I have no idea what to do.
According to Bipan Rai, North America director of FX strategy at CIBC Capital Markets, "there is growing concern that incoming data is showing that the Fed might be a little bit behind the curve than maybe they expected heading into this year."
"There's more and more of a concern that incoming data is revealing that the Fed might be a little bit behind the curve than maybe they expected heading into this year," said Bipan Rai, North America head of FX strategy at CIBC Capital Markets.
I concur with you as well. I prefer to have an investing coach's advice in my day-to-day investment decisions because their skill set is based on short- and long-term holdings for profit realization and their unique analysis makes it practically impossible for them to underperform. My coach and I have been working together to invest for literally four years, and we have already generated over $1 million in net profits.
We're only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08' crash and I've been looking into similar opportunities in this present market, could this coach that guides you help?
Thanks for the advice. The search for your coach was simple. I researched her well before arranging a call with her.
Considering her resume, she appears knowledgeable.
"What's your risk tolerance?"
Crypto investors: yes 👍🏻
Not investors... Speculators. Moon boys. Crypto bros. Bag holders.
@@uFFFO Ah yes. Because trad-fi is not a elitist casino.
The 2008 crash didn't happen because of greedy bankers, brokers and regulators leveraging the whole market to the ground.
Crypto is just a term for a digitally protected and transferable asset. Plenty of crypto coins operate like regular stocks (+additional benefits), with a company that has cash-flow behind it. Solana Labs makes around $66M in revenue yearly for example.
Bitcoin is capped at 21M coins.
USD is capped at infinite bills.
USD went from 6T circulating bills to 18T circulating bills the past 4 years.
Keep making fun of us. Your comments will age like milk.
This is the most handsome financial nerd with prudent, sound and wise advice for investing!
That's a very niche category, but I appreciate the compliment nonetheless :)
Investing in equities has always required riding out the ups and downs. So when fear is high, it may be time to be contrarian: investors should consider it an opportunity to not only stay invested, but to also buy while prices are depressed.
“In the short term the stock market is a roulette wheel, in the long term it’s a money printing machine”…. Said someone richer than me.
There are so many ways to go about this thing. Most important aspect is to fund the portfolio as much as possible, you’ll be a happy camper if you stay the course. Minor adjustments are cool, but timing the market will steal a lot of your wealth.
If you’re investing for the long term, a looming correction or recession shouldn’t panic you. As a rookie you may want to consider buying recession-friendly sectors such as consumer staples, utilities and healthcare. Stocks that have been paying a dividend for many years are also a good choice. These tend to be long-established companies that can withstand a downturn.
This is the Plain Bagel-est advice.
Doing the sane, reasonable, and prudent thing for a long time is hard. Believing the hype and jumping on the bandwagon is easy. Just ask Kevin O'Leary. His due diligence for FTX was that other "investors" (gamblers) were eager to get in on it... 1929 to today, the more things change, the more they stay the same.
"history never repeats but it sure does rhyme"
@chibuezeiroh5997 Liar liar pants on 🔥🔥🔥🔥
Richard, you're great at what you do and its always a treat when I get the notification for a new video. Thank you!
Thank you Richard. Lessons like what you discussed in this video are an important reality check for many trying to "prepare" but in reality can end up harming themselves.
Stocks have gone down c.20%
This is a good time to invest
It really just sounds like wall st approved crap anybody can get off wikipedia.
I'm honestly glad I've found this channel. I'm so sick and tired of clickbait content.
Exactly the same as always. Stay the course and happy Bogling.
Its good hearing all this. I have a few etfs and some long term held companies and when going through them I didn't really feel compelled to sell any of them due to a possible recession. Likewise I have some managed rrsps from a few places that I dont plan on adjusting contributions to. I have about 30% of my self managed portfolio cash and I think I will just continue adding more of what I have already if they dip. Time in the markets should smooth out any short term rollercoastering
I was half-expecting a Masterworks ad read after he mentioned fine art as a safe haven investment.
Glad it didn't come. I'd love to see some real DD done on that company. They give me slimy vibes but I honestly don't have a solid reason why they shouldn't be any good.
Great video once again...
For over 30yrs I've been contributing into a company sponsored RRSP. I've watched the market go up and down. Through it all I just let it ride and sure enough with every drop in value it roars back shortly after. I worried with first couple drops but now I know that every pay I'm just buying more units and when it comes back look out.
Ah yes. The 3 great minds of finance: Bury, El Erian, and Meet Kevin.
Lol, one of those does not belong.
Meet Kevin?! Joker, how much FTX did Meet Kevin sell you on?
Meet Kevin is pretty awful, and horrible stock picker
Yes Dr Bury, Professor El Erian, and a guy who died his hair pink
@@lreyhons RIP to Kevin’s hair.
I've been investing in S&P500 ETFs and I will be doing exactly what I've been doing so far; continue dollar cost averaging and going through the recession as if nothing happened.
Same. Enjoy the discounts
likewise, with a bit of vxus in there aswell
Just curious, why ETFs and not funds?
@@itsacorporatething what's the difference? ETFs are funds
Same 👍
This is very interesting, and I learned a LOT.
Richard Bagelfiend, have you ever made videos on how to gauge how we as potential clients choose the right person to handle our investments if we choose to delegate it?
What are some dos and don'ts, red flags, and such?
Like that you used the Shiller PE ratio. The Mazda ad in the screen shot was 👌
Thanks for this level headed presentation, people are freaking out and it’s hard not to panic. You got a new sub today
glad to see another good video
As a "sort of semi-seasoned investor", most of the topics you cover aren't new to me but I enjoy them.
Great video. Thank you
Excellent video... Thanks buddy!
This is an absolutely fantastic video! Thank you so much!
This is a great video, thank you
Thanks!
Reasonable video. Concrete advice towards the end. Good.
Very thoughtful. Thank you
Nice to have someone actually explain instead of fear monger about the market crashing and to sell everything in the headline. I have personally been investing pretty aggressively in the stock market this year. I am in my mid 20's and I see no reason why I should not be able to weather this storm even if it takes a while to make my money back. As long as I have decent savings for any emergency no reason not to weather the storm especially since I mainly invest in the general market and not specific sectors. I am thinking of slowing down some next year though and focusing more on paying down my debts so if anything bad were to happen with my situation I would not need as much money just to survive.
Beautiful summary of the intelligent investor
This was pretty helpful. I’ve been very worried. ❤
Mr.. bagel, you truly said it like a professional. I am glad I am subscribed to your channel and pursuing cfa. Thank you for your content
Excellent video and great LOTR clip!
It's funny, in late 2019 I asked in a forum if I should move my 401(k) into bonds because it seemed like the market was due for a crash, and someone told me "don't try to time the market" and I thought fair enough, I'll leave it alone. Then March 2020 came around, and I saw the crash I was waiting for, and wondered if I should have made the move. But the 10 best days thing is pretty compelling to me, and I realized that once that crash happened, I might have been constantly second-guessing myself on the right time to go back into the market, adding much unneeded stress to my life.
Yet another excellent video from this channel!
this is the only channel I know whee the sponsored content is actually useful
Good video. I just keep doing what I am already doing. Buying every month, reinvest dividends. Interesting observation is that the ^VIX-index is pretty calm. I was expecting more action there...
Another well made video
My port has been in a recession since start of 2022
Awesome video as always, sound advice without unnecessary flourish 👍👍👍
Having dry powder is very important right now. I would buy short term T Bills. 4.6% return risk free is great.
I like your videos, I am a self taught investor, did it for a quick dollar in 2020 crash, it has gone very well, actively monitering my less than 10 stocks, now trying to learn more but I either face people who clearly don't know, or you who confirms my mindset.
7:02 Made me chuckle. I always suspected this. Just ride the wave man
Hard times so reviews can create new generations of wealth, great video
So professional!
Thank you.
Great video
great video! would be nice to know more about the graph you showed/sources
That meet kevin burn was SICK! 😆🤣
Good avice re timing the market. I had a position that recently was going down, down down, like everything else, and I was starting to doubt it. Then there was an exciting announcement from the company and the stock increased 22% in one day. I think I'm now sitting at +25% on that position. Imagine if I'd missed that!
Good video.
It's a good time to take a beat up 401k and do a Roth Conversion if your stocks are really beaten down. Then you'll only pay taxes on the much lower current prices, and your Roth will be tax free.
Precisely! Our main focus at the moment should be strategies to manipulate our current situation, many people are making millions from this down market, but information like this doesn't make the news.
@Lloyd Bernard The uncertainties that come with this current market are yet another reason why my daily investment decisions are guided by my investment advisor; "JILL MARIE CARROLL" as HER entire skill set is built around being long and short at the same time, using both a profit-driven strategy and removing risk as a hedge against the inevitable downtrends, coupled with proprietary insights/analysis, it is utterly impossible not to outperform. Brought in over $1.5 million in ROI, since using my investment advisor for about 2 years.
@@roseroland1998 Nice one mate, what is the procedure with your investment adviser like?
@@lisaollie4594 It's a fairly simple process, my portfolio only reflects what she trades, not just some particular securities of my choice. "JILL MARIE CARROLL" has been amazing so far, she has influenced my portfolio a lot.
@@roseroland1998 That's fine, I curiously looked up the name and came across her webpage, her credentials/testimonials seem solid with positive reviews, I just left her a message & hopefully she responds soon. Thanks a lot
Always nice to gain some insights that I can take back and use with my clients.
Good video
Always good to watch an old school style episode richard
I prefer the boomer option for recession investing strategy:
1.) ALWAYS think of stocks as money ONLY
2.)which let's you panic that "my money is disappearing
3.) Just PANIC in general
4.) Sell low because "I'm losing my money" and ACTUALLY lose ALL your previous gains
5.) Get out alcohol after you sold low and lament about your kodak shares and enron shares
6.) Fall asleep crying and drunk on the couch
7.) Play victim every chance you get although YOU sold low.
When it rains. You better be prepared, but you will never avoid the rain.
Also because SP500 returns are only about 5% minus the top 10 trading days, when the rate on cash is 4.25% and rising, it makes sense to stay in cash since the risk adjusted return of stocks is so bad.
It's a complex issue but in EU strong measures are already in place (of course excluding the UK) by pumping even more money to the economy, having prices gaps of energy and goods, keeping interest rates low for investments and a hundreds other things. In EU there most likely won't be even a recession but a stagnation.
Appreciate that remark about fine art during 2008 crisis hehe
Really love your viewpoints as you are imo one of the more real and true finance RUclipsrs out there. Most I feel got in during the crypto craze or are parroting others but you're the genuine article. That said, your viewpoint is where I'm at as well. If you're in it, just hold on. Doesn't make much sense to sell. But also it's not the time to go wild with buying either, it'll likely just keep dipping lower. If anything, depending on your cash reserves, your tolerance and your conviction and sticking to the understanding of the fundamentals -- determine whether you should buy a little bit more. I personally have been buying more at every 7% drop. Just a smidgen here and there. Because just as we've seen time after time - the market eventually recovers. Even in the famed 2008 crash, we recovered.
I can’t wait! As a Zennial (1995) I felt really frustrated that I started working at what we now know was the peak. I’ve just landed my first big promotion and I can finally afford to seriously invest and take on the risk (which is much harder when your still low income). This is seriously probably the first big opportunity since the bear market rally during the Covid lockdowns which we know were veryyyyy temporary
Consider yourself lucky. I was working for a few years into the housing crash in 2008 so similar position. You basically have nothing invested now so 25% drop is nothing. Into your bigger earning years you can dollar cost average at a bottom and see good results over the next decade.
Just keep putting money away and it will grow like magic.
You are only boned if you are 70+ right now.
I started earning well and not taking so many months off between jobs and are in a great position. As a 41 year old, I CLEARLY CLEARLY remember all the signs and economic gut feelings so hope to be able to predict kinda accurately when the bottom will come and invest heavily in mining stocks. They run pretty far in advance because they are the kinda stuff ordered 6 months or more in advance of future expected usage of materials. Get a few up and coming lithium stocks that already have mines running or near completion. And probably mostly some blue chips paying good dividends initially and then any ongoing earnings (I always work 60+ hour weeks in recessions somehow) into the younger lithium stocks.
Thank you both! Appreciate the wisdom that comes from your experiences!
As a fellow zennial, I'm excited too. Although, many people are struggling right now. For us, being decades away from retirement, times like these could be where we make some of our biggest gains. We just need to set solid, well thought-out plans and stick to them.
The best time to invest "is when there is blood in the streets." Play the long game and don't panic. All recessions end, and many of the well established funds will outperform individual, emotional investors %100 of the time.
This is well done, but is done many times. As for me, I am looking for unique insights!
The recent implosion in the tech industry just made me realize that it was a good idea to stay out and to stick with companies that physically make or do things in the world.
This is an excellent video! Thanks so much for being a voice of reason and cutting through the noise during these uncertain times. The best advice I've heard so far was from my uncle. He said "Kid, when the ride gets rough, buckle in and sit tight."
Dude, u r great at this YT thing. Any tipps for an up n commer?
@ThePlainBagel thanks for the video, it's quite useful. Btw, what about making video on what does risk tolerance actually mean for an individual investor? E.g. to cover questions like
how risky it's to invest into a 1 specific industry (e.g. big tech), and how to diversify this risk, what are the risks of investing in S&P500 ETF, etc.
It can be really beneficial I believe, especially for me.
I think it’s important to mention bonds in a video. I don’t think enough people know how to invest in those I think it is great for diversity
Bonds weren't spared this past year (generally speaking -- there are some money market instruments that are risk-free apart from opportunity cost), but I agree that bonds aren't discussed on RUclips as much as they should be. Probably not all that sexy to this new class of retail investor (i.e. speculator in the 0DTE options casino), but hopefully them getting eviscerated should reign in some of the lunacy and get people thinking more of the compounding power of yields over the long term.
Great reassuring video! Thanks 🙏
Really great and fact based video without RUclips fluff lol
As down to earth as always. So much needed on yt. Thanks
I just dump 20% a paycheck into VEQT. Learned the tech point the hard way..
7:10 was the closest we'll ever get to investment advice from PB. A historic day
Ben Felix also provides a professional perspective that supports your hypothesis in certain areas
I dipped my toes into investing for the first time in 2018 and selected a Fund investing in expanding the renewable energy production in Europe. One year later, they closed the fund for new investment because of "long term uncertainties regarding liquidity of the fund". In addition, the fund was migrated from one country to another because of tax law-reasons costing every investor a bit of their investment... that caused a whopping 1.2 % return (if I remember correctly) for the years 2019-2022. I was kind of "meh" at that point, but had invested in a few extra funds in the mean time. Then 2022 hit, war in Ukraine, Europe needed renewable energy, energy prices went through the roof, the fund was therefore able to open it up for new investments and the fund increased by about 100% in value.
Kind of the thing that I learned: Does not matter what happens, as a private investor you can only play the long game, really. Make some decisions that make sense for long term investments. Even during a recession some positions can gain a lot value very quickly.
Short mention for a complete picture: Even with a +100% position, I am down 7% this year over all my investments... lol
nice essay nerd
buy oil
Well said. Unless you're going to invest in the equipment and time for a massive amount of research, my suggestion for beginner investors is to use prediversified funds and like you said, play the long game and don't panic. Patrick Boyle suggested not to check them to regularly because you can be motivated to make a poor decision in a downturn. As an aside, I had one stock that had big growth because the co was bought out by a bigger corp. This is far from common though.
Do you mind telling us the name of the fund?
Also down 7% compared to the overall market is actually really good ;)
@@rcbarrientos6109 Sure, I will put some reference in: Look up NL0013908692 (a Dutch fund, Netherlands)... and now actually that I look at it, it only maxed out at about +70% for this year, so I exaggerated a bit. Explosion happened in June/July. Sorry for the misleading +100% earlier, it is the my only fund that gained any value this year, and I was mostly remembering "big gains", and using this to underline the perceived randomness of the fund returns. So the exact value of the gain was not so important for my argument, and therefore I did not double check it!
I LOVED the toy story extract regarding BitCoin 🤣😂🤣😆👌👍👍
What a time to get back in😮
Man Its always scary thinking about how stocks could drop, but hang in there guys! I get scared too I think most people do, what I find helps is to delete all the apps that have any reference to stock prices,
Stay the course. Stocks on sale.
Great👍
Can you do a video on the movie “Trading Places”, specifically the ending part with the Orange Futures that bankrupted the duke brothers?
So dreamy😍
Off topic: You have no idea how good it feels to hear you use “raises the question" instead of the “begs the question" mistake that most on RUclips make.
Pick diversified Index ETFs, reinvest distributions, ride out red periods with DCA, that's all I can do. I'm not some expert market researcher winner-picker and I'm extremely suspicious of anyone who claims to be.
What can I research to feel confident that dollar cost averaging in the S&P 500 index is going to give me a good return in the long run without just looking at the performance history of it? I am asking this because I've just finished reading the big short and I think the mistake that investors did was rely on past performance history and rating agencies and also not knowing what they're buying. Is it that I should be calculating the intrinsic value of each company in the S&P and making sure that the prices of stocks inside the S&P 500 are not inflated because they are in the most famous index there is?
What is this fire soundtrack and why does it sound like a Godfather playlist gone trap house
Could you make a guide/roadmap on how to get from hearing of a stock to buying it.
What are things to do? Where do I get the data to look at, etc.
Obviously, I'm not plain bagel, but my suggestion would be to adopt a mindset that is somewhat anti-hype without necessarily being contrarian when you form an opinion about a stock. When it comes to hearing an idea you think sounds nice, you're primary focus should be about digging into the company's financials. This is the lifeblood of all businesses and its key to know if one is healthy as, if they not making money, they certainly aren't going to make you money.
So why do financials matter? The 10K is the one of the most comprehensive documents you can read about a company, it summaries cash flows, top line revenue, debt etc. Most can be found on the SEC site or in investor relations on the company web page. It will take some practice to read, but there a many guides online and you don't need to memorise the minutiae of the document. Once you've looked through, its best to have some thesis on why you think the company is worth owning. Try to come up with some weak points and see if what you've learned from the financials is robust enough to weather that weakness. Conviction is then necessary to hold whatever you buy, as stocks typically just rocket up in price unless some very unique circumstance occurs (Such things are hard to predict so it's not worth your peace of mind stressing over it). Understand that stocks go down sometimes. That shouldn't be your focus. You should focus on whether the company is profitable and can continue to be so. If not, find out why and whether they can realistically fix this. I find Cameron Stewart's videos quite helpful, but many other sources are fine.
I hope that was somewhat useful, I only answered in case Bagel didn't see it among the mountain of comments and because he doesn't really do stock pick advice for understandable reasons.
Some great insight and down to Earth which I respect.
I really appreciate the content on this RUclips channel. The videos are well-researched and provide valuable information on [topic]. The presentation is clear and engaging, making it easy to understand the material. Keep up the great work!
What is the best thing? DCA into high quality businesses. I see it as a sale on investments. Everytime one of my favorite stocks or funds moves below the 50 day moving average I add even more at least monthly. It is a great accumulation phase. Terrible sell phase.
Okay, I screwed up and sold everything Dec of 21, have felt good about it until lately. How and when do I get back in? Sincerely confused.
The market's cyclical nature is a fundamental truth investors should keep in mind, and a diversified portfolio consisting of a broad assortment of investments can help lessen the impact of market corrections I know for a fact…
The economy is not the stock market. In fact, stocks have generated positive returns on average during economic contractions.
I agree with you !!! I just crossed 1 Mil Profit. 45,000% account growth in 1.4 years. Investing in equities has always required riding out the ups and downs. So when fear is high, it may be time to be contrarian: investors should consider it an opportunity to not only stay invested, but to also buy while prices are depressed.
One of the best videos on this subject!
Bro you're a fucking legend. I've re-watched so many of your videos.
If you’re that worried about a correction or a bear market, that’s probably a sign your overall allocation is too aggressive. Build up more of an emergency fund or move some of your investments to bonds or commodities full-time. Sure your upswings won’t be as big, but you’ll have the resources to ride out a downturn.
Waiting comes at a cost too. According to research by Elm Partners, even when starting from an expensive market, the odds of correctly predicting a correction within the next _3 years_ are a little better than a coin flip (56%). When the predictor is correct they save themselves about 10% of losses, but when they’re wrong they miss out on the gains the market made during that time, an average of 30%. That means on average waiting for the dip means 8% missed gains.
I agree in general., will slightly adjust my portfolio.
I don't have to touch my 401K for decade(s) so it won't matter that much.
Buy the dip babyyy
Another great video, Sir. Thank you.
dollar cost averaging is the best approach. In retirement try to generate income via dividend paying stocks and other investments that pay an income. Best to not touch the principle.
Woody had me rolln. 😅
So glad there’s some ACTUAL finance people on RUclips putting out good info. Anyone who is still following real estate people need to GET OUT! People like meetKevin, graham Stephan, etc are absolutely not financial advisors in any way, they got rich and play around with their money and then act like they’re finance gurus when they earned their money in a completely different way