Bitcoin has outperformed the SP500 and every other financial asset class over the last 15 years. It is the only provable scarcity humanity has ever encoutnered and demand is continuing to surge. Basic supply/demand dynamics playing out as always.
Great content, Menno! I'm passionate about investing as well as exercise science so this was an awesome surprise💪🏻 Great explanation for each of your main points! I would add 1 more which I thought you were about to touch on when you showed how the increase in avg annual returns makes a big difference over the long time horizon: fees! As you know, those can really compound over time and you aren't getting much for your money vs. an index fund. I know you touched on that somewhat by discouraging actively-managed funds. Looking forward to more of this type of content💪🏻
That was really interesting. I'm down for more beginner investing advice, just saying... This stuff can be dry and intimidating at times, but you somehow got me interested 👍
I've been thinking about how potential policy changes might affect market growth as the election approaches. Election results frequently affect industry performance, cause volatility in the market, and necessitate modifying your investing plan because of changes in the legislation.
Absolutely. Unemployment might rise and the economy could get tougher, but there are still good investment opportunities right now. My 120k portfolio grew by 70% over the last four months by investing in volatile sectors
Diversification. There is probably more to talk about with regards to investing and money management than fitness and hypertrophy. How many ways can you spin maximum or minimum recoverable volume and calories out vs calories in?
@@FlatStan1l Is that right? Well, it is refreshing for sure! Way better than grown men like Greg Doucette gossiping about other people for the sake of making money
Very refreshing! However, I would not say that technical analysis is useless. How would you go about daytrading and swingtrading without it? Now, I am not saying that it is the be all end all but in combination with fundamental analysis I think it has its value and allows you to "trade what you see". Jack Schwager points this out too. But especially with stocks and long term investing I think fundamental analysis is more useful. Daytrading and swingtrading play by slightly different rules, I´d argue.
Hey! Love your videos. Just have a few points i want to bring up I personally think expected returns of 10% is much too high as a prediction. World wide expected returns of stocks are more likely to be around 4-5% after inflation. Furthermore at the moment it is not OpenAI who is winning from the “ai bubble” but at the moment it is NVDIA. Lastly I would say that for most people in terms of investing, I would not suggest going against the grain. I would suggest for most people to invest In an all world etf instead, as by far most retail traders are not able to beat the market.
Honestly this is really good. Not sure if you'll catch the same audience but surely these is an overlap between intelligent investors and intelligent lifter though.
Ok I was quite skeptical about you starting to branch off in other topics such as investing. After watching this I think "yeah, nothing groundbreaking here, all of this sounds like boring advice without a miracle solution". Which convinces me it's actually good advice.
Damm I can't thankyou enough for this video, also i was thinking that it would be very nice of you if you make a video on some side hustles or what else should i do in my free time to earn more money.❤❤
Ik ben 30 jaar en zit 100% in VanGuard World. Ik wil, voor stabiliteit van mijn portfolio, 10-20% obligaties introduceren. Nog aanraders van obligatie ETF's? Mooie video!
Do not listen to anyone who says "Index investing is just for beginners". Studies have shown that most professional active managers don't outperform broad market index in the long run after fees. It is highly unlikely that you're going to be the one.
@@NitinPatelIndia Agreed, Index is the best option for the vast majority of people. I value companies in addition to owning index, but the idea of mean reversion based on PE worked in the Ben Graham days when everything was done manually and stocks/book value was all based on tangible assets.
@@NitinPatelIndia this is fallacious. I know in my personal life several traders who do outperform the market. The problem isn't that it's impossible. You still have to be top 1-10% and have a lot of emotional resilience. Also, the problem for fund managers is liquidity. Getting in and out of multi billion dollar positions isn't as easy as a retail investor getting in/out with a few mil. Slippage wrecks you.
@@gregfields011yeah so a 99-90% change to underperform. Good odds. That’s also before fees and taxes.. even worse odds. Yess the hedge funds are less nimble but they have better access, faster information flow and 10 phd’s working for them on computers more expensive than your house… also the order vs fees and taxes makes much more sense for them than for the average retail day trader. It’s just the same argument of small and nimble companies vs mega caps companies (and look who dominates now..). Do you really know them btw, have you checked their accounts… after fees and taxes… anecdotes are pretty low on the evidence skill. Look at the research. It’s a ******* graveyard. Yeah you might eat, but more likely you’re the dinner.
@@bobbobson4030 i thought about that and in my opinion there’s an uncanny valley in most expertises. Maybe i am using the metaphor wrong but what i mean is that a smart hard working semi professional or hobbyist can do a very reasonable job at the general level. I think Menno did that here. Getting from there to a level of a professional economist or fund manager isn’t just a question of what to add. Look at channels like money/macro or patrick boyle, or even plain bagel to see the “je ne sais quois”. On the inverse ser Dr. Mike’s Making Progress channel That said from Menno’s poll he’s going for a broad set of topics and maybe the general approach will work well when there is a larger sample set it’s hard to pivot channels and like i said the content in this video is top 25% quality but not top 1% I bet i will love topics i know less about than finance
I'm going to guess your primary strategy is to buy ETFs in previously underperforming international markets to (hopefully) capture benefits from mean reversion. But curious if you will also be providing insight into selecting individual stocks?
You say that investment is largely a zero sum game, however can that really be true given that the market trends upwards so not every gain results in equal loss. Is there really a need to be so contrarian in such a game?
excellent point. stock market investing is NOT a zero sum game (though options market is). stock market "alpha," perhaps, is zero sum. But everyone can make (or lose) money in the stock market.
Total returns are not, but alpha is. For beginners, just going with market ETFs is good. You won't get above market returns by definition, but that's fine.
I had the same comment regarding investing not being a zero sum game, "investing" almost by definition tends to be on longer time periods and therefore is closer to beta. "Trading" (not investing) is usually worse than zero sum game due to cost of trading.
Good video, but not a fan of the 10% a year return. That’s before inflation, based on a crazy bull market and US-only. The number is quite a bit lower if you look at the international let’s say past 100 years. Also a problem with the arithmetic and geometric mean. But anyways, many professors talk more about 3-5% above inflation. More like 3-4% taking into account current valuations. Nice video though and very cool to see your other interests.
People say timing the market doesn't work and hedge funds dont outperform the index. Just like for diets, 99% of people fail at timing the market. However in my personal life I do know a couple of people who have consistently outperformed the market. They use systematic investing rather than investing based on feelings. Also hedge funds have to enter and exit with billions of dollars. Due to slippage this is completely different from a retail investor entering an exiting with a few million. It is absolutely possible to outperform the market but just like any endeavour 99% of people will fail
Quite a different video Menno. Spend little and save as much as possible, invest the difference DCA-wise into a well diversified world wide ETF, buy some physical GLD/SLV, and BTC. Retire early. Search FIRE movement.
Worth noting that 1million will have the purchasing power of about $280k in 40yrs, so aim to be a multi-millionaire.
4 месяца назад+1
You should of course adjust your monthly investment also for inflation, so that would make $200 monthly inflation-adjusted investment to have $467k purchasing power in 40y (assuming 3% inflation)
I like this addition. I can unsubscribe from some investment channels that I find a bit repetitive. Then get my motivational and info fix here for the gym and dosh!
As an American, I've always wondered how Europeans invest. Do you guys invest in Euro index funds like Americans invest in S&P 500 or US total market funds? Do Europeans commonly buy US index funds?
Globally, most of the time. For example MSCI world or ftse all world. I think relying solely on euro stock or dax is very uncommon. Btw, if you're American and buy only s&p500, it is probably a fine choice, but you're exposing yourself to a bit of cluster risk.
@@menno.henselmans fair enough, but you start by talking about inflation and the purchasing power of the dollar, shouldn't you use real return which accounts for inflation in your example?
So a high-yield money market generating 5.1% isn't an investment? It's interesting that you publish this video while the Schiller P/E is at levels correlating to 1929, 1999, and 2021. If cash is trash, why is Warren Buffett sitting on ~$300 billion USD? Good video though. You always bring smart content
That's an investment. I'm talking about actual cash, not the 'cash' investors talk about when they know nobody would ever hold actual cash and therefore refers to 'high liquidity investments'.
past performance is not indicative etc etc but in all previous crises like that, where rates were high, equites easily outperformed treasury bonds. Think about it- businesses procedure something. T-bills on the the other hand barely match the official inflation. I think you will be fine with an index - so many pensions and people's investment are lined to it nowadays that Fed will prop it up, if needed.
Market efficiency is on a continuum. Strong form efficiency reflects past performance (trading volume, price patterns), public and private info, while semi strong form reflects only past and public info. No market is strong form because that would mean that insider trading is systemic. Weak form reflects only past performance. Using past performance to inform technical analysis is a violation of weak form assumptions. Studies that have analyzed P/Es using statistical analysis would go against semi strong form assumptions as these variables are public but are not associated to the price patterns (like trading volume, bid ask spreads, etc.) That being said, just because you read a study on such fundamental variables, it doesn't mean that there's proof for market inefficiency. It might mean that the researcher(s) found a market anomaly. Most anomalies cannot be replicated/ are just artifacts of research methodology.
@@menno.henselmans thanks for replying. Your observation that chart / waveform analysis isn't possible might be true for micro or short term study, but Buffet's indicator clearly shows that we are getting closer to late cycle / swing of the pendulum. I recently read Howard Mark's Mastering the Market Cycle, and he really reinforced my thinking around what I was doing innately since a teenager (now in my 50s) with waveform study.
Rather timely video since the S&P500 hit a record high today...I'm expecting a correction into October and am currently short. Will be amusing if timing of this video marked the top (at least for a couple of months)
It would be like the old story where near the great depression, a man knew it was time to exit the stock market when even his shoeshine boy started giving him stock tips.
so.. lets see if i got this right - everyone should invest because inflation devaluates cash.. invest and become a millionaire in 40 years, potentially..... doing messy stuff that is counter intuitive and following the graphs actually wipes 75% of your investment :D and the final advice which is if you see the market crashing dont pull your money out they are already gone.. you should've pulled them out or invested before the crash happened. next do a video about foods in your diet that help y ou look into the future
Here's anotherone I see all the time: sell your winners and keep your loosers. "It has gone up by 30% this yer, what are the odds of it keeping up?" Well if the rise is due to fundamentals, very good actually. "It has halfed in price since I bought it, it will come back." Why would it? Or "I know it was a bad pick but I want my money back." Again, why should it do it? The market and other people owe you nothing. Besides, a price is always due to something. If a stock moves to some direction, there is usually (not always but good luck trying to identify that) a damn good reason. Moral of the story: don't sell your achievers and keep your underachievers. Don't sell your winner and keep your loosers. Winners are winners for a reason.
Its such a shame that investing isnt taught in school. Its the best and most secure way of making a lot of money. I would say follow the science: Buy the whole market (market weighted global index fund) with the lowest fee, no matter if its up or down put in all the money you can and never sell. I did all the beginner mistakes as well but now I am 31 and have ~330'000$. And Im working as a traindriver now and before that a security guard. Every one can get filthy rich with index investing even with a low salary. Either increase your salary or decrease your monthly payments. No red bulls😂
"Technical analysis doesn't work." It does. Plenty of price action setups have 60+% win rates, which become even more probable if indicators corroborate it too. No trade has a guaranteed outcome, though, versus the inevitability that the market as a whole goes up over time.
I've always believed you are buying the company. I owned Boeing until I decided that I didn't like their changes and lack of quality control. I sold because of that. Turns out, I was right and they're no longer a good buy. .
A very informative video. However, I would suggest dedicating a whole channel to su h content since tjis channel was dedicated for a long time for fitness only videos.
So basically, the stock market is objectively quite fickle and unpredictable, but making emotional investments is also bad. I'm failing to see how investing is a good thing lol. Just put your money in and hope for the best
If you ignore the top half of his face and focus on Menno's nostrils, it looks like a small beady-eyed man with a huge mouth is talking. Unrelated, but I've been investing in Stocks, Bonds, and ETFs through my 401k and have been keeping excess cash in a High Yield Savings account for a while now. Came here to see what Menno had to add and he's spot on, as usual. The hard and honestly frustrating truth is TIME has more upside potential than anything else you own (in more ways than one). You're not too young to invest. Do a little research and get to it!
After a 30 year military career my father became a certified financial planner and hence my personal financial advisor. I think he would say to work with someone that is certified and choose a reputable investment firm. His advice was good for me and all of his clients. Do your homework. Choose wisely.
The discussion of compounding and becoming a millionaire is very flawed because it conceptually omits the very thing mentioned in thr beginning of the video: Inflation. Yes you will be a millionaire, nominally, but it will mean much, much less.
I'm a bit confused. I thought you were a science based guy yet your investment advice includes a lot not supported by reality. You say don't use trends and then use trends to suggest country selection should be based on past trends. As well, just as technical analysis doesn't work neither does market timing. My man I love your content on the fitness side but this isn't great advice on the investing.
You seem to confuse technical and fundamental analysis. You can invest countercyclically based on fundamentals without looking at any trends. Shiller PE, for example, can help with country allocation. Market timing within 1 market indeed doesn't work.
@@menno.henselmans Both are are value destroying activities. If you base it on past performance as you suggested with the US or fundamentals which in efficient markets are priced in it all sucks. If you want to teach the basics start with risk reward trade offs and diversification in the context of MPT, dollar cost averaging and the impacts of taxes. I say this with love a little knowledge is a dangerous thing because we don't know what we don't know. You have a lot to learn about investing. Not as much as I do about working out but still your basics aren't there yet.
@@menno.henselmans Shiller PE was a tool that was easier to use when the assets of the company were highly tangible and things like book value were easier to measure from a value investing standpoint. Now that most book value is intangible and tech companies have a lot of optionality due to scale, they may have high price to free cash flow/yields yet still be reasonably priced compared to more mature/old type businesses which will naturally have lower P/E. Certain regions have more companies that would be viewed as "traditional" and although you can expect a revision to mean that is less likely than when you had to do all the calculations manually and you could find alpha from this strategy. Aswath Damodaran has some really good content on value investing/life cycles and country risk I think you would enjoy it,
I like the branch out into new content. Between bodybuilding, gardening, and other hobbies that involve delayed gratification, I see them all as forms of investing as well.
For the vast majority of people you are best buying a world index or s&p 500 and consistently buying and never selling
Hey Varun, when do we get to hear your entrepenourship story and how you managed to sell to Google?
@@felipeguerrero5059 if people want to hear about it I’ll make a video at some point
VFIAX if you use Vanguard
Very true. Some people argue that even most professional investors would do best by doing mostly that.
Bitcoin has outperformed the SP500 and every other financial asset class over the last 15 years. It is the only provable scarcity humanity has ever encoutnered and demand is continuing to surge. Basic supply/demand dynamics playing out as always.
Invest in your muscles!
Menno, supporting you as you expand, I think it’s great. I enjoy your lifting content but also your generally thoughtful approach to life.
Even if investments are not a popular topic around here, i am sure many people are curious to see what other topics are on the table. Cheers
I'm not understanding any of these lifting metaphors at all
🤣
Very interested to see where this goes. I might not be interested in the subject matter, but Menno’s videos are always high quality content-wise.
Bro create a channel with that content, I’d like to subscribe there and also the algo is gonna stop you content to be pushed in the algo
Yea probably best to keep this content in a separate channel.
If you’re into this type of content, Ben Felix is fantastic
This is a nice content, please keep em coming.
Very informative, will keep this in mind. Thank you 🙌
Great content, Menno! I'm passionate about investing as well as exercise science so this was an awesome surprise💪🏻 Great explanation for each of your main points! I would add 1 more which I thought you were about to touch on when you showed how the increase in avg annual returns makes a big difference over the long time horizon: fees! As you know, those can really compound over time and you aren't getting much for your money vs. an index fund. I know you touched on that somewhat by discouraging actively-managed funds. Looking forward to more of this type of content💪🏻
Menno is stepping into a new area of development. Grow your muscles, grow your money.
That was really interesting. I'm down for more beginner investing advice, just saying... This stuff can be dry and intimidating at times, but you somehow got me interested 👍
I've been thinking about how potential policy changes might affect market growth as the election approaches. Election results frequently affect industry performance, cause volatility in the market, and necessitate modifying your investing plan because of changes in the legislation.
Absolutely. Unemployment might rise and the economy could get tougher, but there are still good investment opportunities right now. My 120k portfolio grew by 70% over the last four months by investing in volatile sectors
:0 How do you invest? I’m having trouble making a plan
I use market research tools, follow financial news, and talk to my advisor regularly. She helps me stay on track
Who is your advisor?
June Renae Matthysse. She’s quite known
I really enjoyed this. Bodybuilding is also a form of investment - doing things today for the betterment of tomorrow.
Great public service, to young guys who need it.
Honestly, I like the new content. Keep it up! 👊💪
Menno helping with my gains in the gym and my bank account 💪 💰
Keep up these types of videos Menno!
I like how you sneaked in your academic credentials in the video
I'm actually so pumped to be getting investment AND evidence-based lifting advice in the same place. Maybe it's a small niche, but I love to see it!
Thanks Menno I enjoyed this video and hope you continue this type of content.
everything I'm interested in in one place. muscles and money. perfect
excited for this new kind of content
wait what
I'm also a bit confused! haha
bro that was me too lmao im confused
ye right. So he has a masters in behavioral economics and a phd in some thing exercise related?
Diversification. There is probably more to talk about with regards to investing and money management than fitness and hypertrophy. How many ways can you spin maximum or minimum recoverable volume and calories out vs calories in?
@@FlatStan1l Is that right? Well, it is refreshing for sure! Way better than grown men like Greg Doucette gossiping about other people for the sake of making money
Top video Menno! 👌
How did you go from muscles to stocks?
Very refreshing! However, I would not say that technical analysis is useless. How would you go about daytrading and swingtrading without it? Now, I am not saying that it is the be all end all but in combination with fundamental analysis I think it has its value and allows you to "trade what you see". Jack Schwager points this out too. But especially with stocks and long term investing I think fundamental analysis is more useful. Daytrading and swingtrading play by slightly different rules, I´d argue.
Hey! Love your videos. Just have a few points i want to bring up
I personally think expected returns of 10% is much too high as a prediction. World wide expected returns of stocks are more likely to be around 4-5% after inflation.
Furthermore at the moment it is not OpenAI who is winning from the “ai bubble” but at the moment it is NVDIA.
Lastly I would say that for most people in terms of investing, I would not suggest going against the grain. I would suggest for most people to invest In an all world etf instead, as by far most retail traders are not able to beat the market.
100%
Honestly this is really good. Not sure if you'll catch the same audience but surely these is an overlap between intelligent investors and intelligent lifter though.
Ok I was quite skeptical about you starting to branch off in other topics such as investing. After watching this I think "yeah, nothing groundbreaking here, all of this sounds like boring advice without a miracle solution". Which convinces me it's actually good advice.
Any books/textbooks that you can recommend on investing?
I love this, a more hollistic content outlook!
did not expect this kind of content from you, like it tho thumbs up
Damm I can't thankyou enough for this video, also i was thinking that it would be very nice of you if you make a video on some side hustles or what else should i do in my free time to earn more money.❤❤
Ik ben 30 jaar en zit 100% in VanGuard World. Ik wil, voor stabiliteit van mijn portfolio, 10-20% obligaties introduceren. Nog aanraders van obligatie ETF's? Mooie video!
Just do SIP on an index ETF
Index investing is best for beginners for sure.
Do not listen to anyone who says "Index investing is just for beginners". Studies have shown that most professional active managers don't outperform broad market index in the long run after fees. It is highly unlikely that you're going to be the one.
@@NitinPatelIndia Agreed, Index is the best option for the vast majority of people. I value companies in addition to owning index, but the idea of mean reversion based on PE worked in the Ben Graham days when everything was done manually and stocks/book value was all based on tangible assets.
@@NitinPatelIndia this is fallacious. I know in my personal life several traders who do outperform the market. The problem isn't that it's impossible. You still have to be top 1-10% and have a lot of emotional resilience. Also, the problem for fund managers is liquidity. Getting in and out of multi billion dollar positions isn't as easy as a retail investor getting in/out with a few mil. Slippage wrecks you.
@@gregfields011yeah so a 99-90% change to underperform. Good odds. That’s also before fees and taxes.. even worse odds. Yess the hedge funds are less nimble but they have better access, faster information flow and 10 phd’s working for them on computers more expensive than your house… also the order vs fees and taxes makes much more sense for them than for the average retail day trader. It’s just the same argument of small and nimble companies vs mega caps companies (and look who dominates now..). Do you really know them btw, have you checked their accounts… after fees and taxes… anecdotes are pretty low on the evidence skill. Look at the research. It’s a ******* graveyard. Yeah you might eat, but more likely you’re the dinner.
I loved this information 👍👍
reasonable general advice definitely above average “finfluencer” advice but I am used to Menno having top 1% content as opposed to top 25%
What would you add?
@@bobbobson4030 i thought about that and in my opinion there’s an uncanny valley in most expertises.
Maybe i am using the metaphor wrong but what i mean is that a smart hard working semi professional or hobbyist can do a very reasonable job at the general level. I think Menno did that here. Getting from there to a level of a professional economist or fund manager isn’t just a question of what to add. Look at channels like money/macro or patrick boyle, or even plain bagel to see the “je ne sais quois”. On the inverse ser Dr. Mike’s Making Progress channel
That said from Menno’s poll he’s going for a broad set of topics and maybe the general approach will work well when there is a larger sample set
it’s hard to pivot channels and like i said the content in this video is top 25% quality but not top 1%
I bet i will love topics i know less about than finance
I'm going to guess your primary strategy is to buy ETFs in previously underperforming international markets to (hopefully) capture benefits from mean reversion. But curious if you will also be providing insight into selecting individual stocks?
Fantastic Menno
Would like to see more of these kinds of videos
You say that investment is largely a zero sum game, however can that really be true given that the market trends upwards so not every gain results in equal loss. Is there really a need to be so contrarian in such a game?
excellent point. stock market investing is NOT a zero sum game (though options market is). stock market "alpha," perhaps, is zero sum. But everyone can make (or lose) money in the stock market.
Total returns are not, but alpha is. For beginners, just going with market ETFs is good. You won't get above market returns by definition, but that's fine.
I had the same comment regarding investing not being a zero sum game, "investing" almost by definition tends to be on longer time periods and therefore is closer to beta. "Trading" (not investing) is usually worse than zero sum game due to cost of trading.
Good video, but not a fan of the 10% a year return. That’s before inflation, based on a crazy bull market and US-only. The number is quite a bit lower if you look at the international let’s say past 100 years. Also a problem with the arithmetic and geometric mean. But anyways, many professors talk more about 3-5% above inflation. More like 3-4% taking into account current valuations. Nice video though and very cool to see your other interests.
People say timing the market doesn't work and hedge funds dont outperform the index.
Just like for diets, 99% of people fail at timing the market. However in my personal life I do know a couple of people who have consistently outperformed the market. They use systematic investing rather than investing based on feelings.
Also hedge funds have to enter and exit with billions of dollars. Due to slippage this is completely different from a retail investor entering an exiting with a few million. It is absolutely possible to outperform the market but just like any endeavour 99% of people will fail
Quite a different video Menno. Spend little and save as much as possible, invest the difference DCA-wise into a well diversified world wide ETF, buy some physical GLD/SLV, and BTC. Retire early. Search FIRE movement.
I don't know man going all in on BTC and buying the eth ICO during college with all my spare cash worked out pretty good.
He isnt ready for that convo.....we are still soooo early. Also hope you pivoted your ETH to SOL cycle ;)
The moment menno realises the CPM for investing videos is $100 per 1000 views 😁
Sounds like a poor return 😂
Worth noting that 1million will have the purchasing power of about $280k in 40yrs, so aim to be a multi-millionaire.
You should of course adjust your monthly investment also for inflation, so that would make $200 monthly inflation-adjusted investment to have $467k purchasing power in 40y (assuming 3% inflation)
thank you gigachad
I like this addition. I can unsubscribe from some investment channels that I find a bit repetitive. Then get my motivational and info fix here for the gym and dosh!
rather optimistic , ave return 50 yrs SP 500 is 7,8 net of inflation, the major problem is the pitiful purchasing power of 1 million in 40 years
What I get for clicking assuming it’s a metaphor for MPS 🤦😂
As an American, I've always wondered how Europeans invest. Do you guys invest in Euro index funds like Americans invest in S&P 500 or US total market funds? Do Europeans commonly buy US index funds?
Globally, most of the time. For example MSCI world or ftse all world. I think relying solely on euro stock or dax is very uncommon.
Btw, if you're American and buy only s&p500, it is probably a fine choice, but you're exposing yourself to a bit of cluster risk.
Many Europeans don't invest at all, which is a big part of the reason I made this video.
I really thought this was going to be a fitness video even though I saw the title
Why do you keep saying 10% return from stocks? You show a chart that states 6.9% on average.
Real return is about 7%. Total 10%. The exact numbers depend on which period you look at.
@@menno.henselmans fair enough, but you start by talking about inflation and the purchasing power of the dollar, shouldn't you use real return which accounts for inflation in your example?
@@ethanthibaudeau2853why would you consider inflation in investing? Your money will lose value either way, if you invest or not
So a high-yield money market generating 5.1% isn't an investment? It's interesting that you publish this video while the Schiller P/E is at levels correlating to 1929, 1999, and 2021. If cash is trash, why is Warren Buffett sitting on ~$300 billion USD? Good video though. You always bring smart content
That's an investment. I'm talking about actual cash, not the 'cash' investors talk about when they know nobody would ever hold actual cash and therefore refers to 'high liquidity investments'.
past performance is not indicative etc etc but in all previous crises like that, where rates were high, equites easily outperformed treasury bonds. Think about it- businesses procedure something. T-bills on the the other hand barely match the official inflation. I think you will be fine with an index - so many pensions and people's investment are lined to it nowadays that Fed will prop it up, if needed.
Market efficiency is on a continuum. Strong form efficiency reflects past performance (trading volume, price patterns), public and private info, while semi strong form reflects only past and public info. No market is strong form because that would mean that insider trading is systemic. Weak form reflects only past performance.
Using past performance to inform technical analysis is a violation of weak form assumptions. Studies that have analyzed P/Es using statistical analysis would go against semi strong form assumptions as these variables are public but are not associated to the price patterns (like trading volume, bid ask spreads, etc.)
That being said, just because you read a study on such fundamental variables, it doesn't mean that there's proof for market inefficiency. It might mean that the researcher(s) found a market
anomaly. Most anomalies cannot be replicated/
are just artifacts of research methodology.
@@menno.henselmans thanks for replying. Your observation that chart / waveform analysis isn't possible might be true for micro or short term study, but Buffet's indicator clearly shows that we are getting closer to late cycle / swing of the pendulum. I recently read Howard Mark's Mastering the Market Cycle, and he really reinforced my thinking around what I was doing innately since a teenager (now in my 50s) with waveform study.
Hmmm, BTC has returned on average 44% a year. Dont expect that over the next ten years to drop below 20%
This is glorious news! More content like this for noobs like me please
+1
And this is an interesting video and it's to your credit that you added it to your video lineup.
Rather timely video since the S&P500 hit a record high today...I'm expecting a correction into October and am currently short. Will be amusing if timing of this video marked the top (at least for a couple of months)
It would be like the old story where near the great depression, a man knew it was time to exit the stock market when even his shoeshine boy started giving him stock tips.
Good luck timing the market homie
@@rafaeldietrich8050 Thanks homie, but I've been doing it for 30 years now
so.. lets see if i got this right - everyone should invest because inflation devaluates cash.. invest and become a millionaire in 40 years, potentially..... doing messy stuff that is counter intuitive and following the graphs actually wipes 75% of your investment :D and the final advice which is if you see the market crashing dont pull your money out they are already gone.. you should've pulled them out or invested before the crash happened. next do a video about foods in your diet that help y ou look into the future
VT only
Here's anotherone I see all the time: sell your winners and keep your loosers. "It has gone up by 30% this yer, what are the odds of it keeping up?" Well if the rise is due to fundamentals, very good actually. "It has halfed in price since I bought it, it will come back." Why would it? Or "I know it was a bad pick but I want my money back." Again, why should it do it? The market and other people owe you nothing. Besides, a price is always due to something. If a stock moves to some direction, there is usually (not always but good luck trying to identify that) a damn good reason.
Moral of the story: don't sell your achievers and keep your underachievers. Don't sell your winner and keep your loosers. Winners are winners for a reason.
in 40 years I'll be dead
Its such a shame that investing isnt taught in school. Its the best and most secure way of making a lot of money.
I would say follow the science: Buy the whole market (market weighted global index fund) with the lowest fee, no matter if its up or down put in all the money you can and never sell.
I did all the beginner mistakes as well but now I am 31 and have ~330'000$. And Im working as a traindriver now and before that a security guard.
Every one can get filthy rich with index investing even with a low salary. Either increase your salary or decrease your monthly payments. No red bulls😂
"Technical analysis doesn't work."
It does. Plenty of price action setups have 60+% win rates, which become even more probable if indicators corroborate it too. No trade has a guaranteed outcome, though, versus the inevitability that the market as a whole goes up over time.
I've always believed you are buying the company. I owned Boeing until I decided that I didn't like their changes and lack of quality control. I sold because of that. Turns out, I was right and they're no longer a good buy. .
Oh, something non muscle 👍
the question my friend is actually, what is money...
money in its most abstract is a representation of value applied to things for the purpose of tangible or intangible exchange
A transactional tool, a tool to measure value with
Sp500 and chill for life
Thats it for me
I thought this was smart title for investing in training 😅
A very informative video. However, I would suggest dedicating a whole channel to su h content since tjis channel was dedicated for a long time for fitness only videos.
So basically, the stock market is objectively quite fickle and unpredictable, but making emotional investments is also bad. I'm failing to see how investing is a good thing lol. Just put your money in and hope for the best
why is my fitness coach giving me financial advice 😂
Next video: "Is better invest in stocks than in your physique"
Look at Neil Woodford for why you don’t give your money to the rockstar fund manager. Ask me how I know! 😂
Remember everyone, you can't out-capitalism the Dutch. They invented this game.
Yeaaaahh!!!!
If you ignore the top half of his face and focus on Menno's nostrils, it
looks like a small beady-eyed man with a huge mouth is talking.
Unrelated, but I've been investing in Stocks, Bonds, and ETFs through my
401k and have been keeping excess cash in a High Yield Savings account
for a while now. Came here to see what Menno had to add and he's spot
on, as usual.
The hard and honestly frustrating truth is TIME has more upside
potential than anything else you own (in more ways than one). You're
not too young to invest. Do a little research and get to it!
Meglio separare i contenuti fitness da quelli economici e gestionali usando un nuovo canale.
Comunque video ben fatto come sempre.
❤❤❤🎉🎉🎉
Palantir will be the winner of the AI boom.
Love it
Just don't live in wrong country where your investments will suddenly get frozen by outside factors.
😹
After a 30 year military career my father became a certified financial planner and hence my personal financial advisor. I think he would say to work with someone that is certified and choose a reputable investment firm. His advice was good for me and all of his clients. Do your homework. Choose wisely.
>inb4 this becomes a reaction channel.
Never.
Open AI is owned by Microsoft
No, not owned and they only got involved after it took off. That's Microsoft's MO: acquire or copy.
Where's the fitness? :(
Welp. This channel was great while it lasted...
The discussion of compounding and becoming a millionaire is very flawed because it conceptually omits the very thing mentioned in thr beginning of the video: Inflation. Yes you will be a millionaire, nominally, but it will mean much, much less.
BTC is actually the highest return asset class by a long shot.
Buying a house is better than SP 500 if you have to pay rent. If you can live with parents then agree stock market is better
I'm a bit confused. I thought you were a science based guy yet your investment advice includes a lot not supported by reality. You say don't use trends and then use trends to suggest country selection should be based on past trends. As well, just as technical analysis doesn't work neither does market timing. My man I love your content on the fitness side but this isn't great advice on the investing.
You seem to confuse technical and fundamental analysis. You can invest countercyclically based on fundamentals without looking at any trends. Shiller PE, for example, can help with country allocation. Market timing within 1 market indeed doesn't work.
@@menno.henselmans Both are are value destroying activities. If you base it on past performance as you suggested with the US or fundamentals which in efficient markets are priced in it all sucks. If you want to teach the basics start with risk reward trade offs and diversification in the context of MPT, dollar cost averaging and the impacts of taxes. I say this with love a little knowledge is a dangerous thing because we don't know what we don't know. You have a lot to learn about investing. Not as much as I do about working out but still your basics aren't there yet.
@@menno.henselmans Shiller PE was a tool that was easier to use when the assets of the company were highly tangible and things like book value were easier to measure from a value investing standpoint. Now that most book value is intangible and tech companies have a lot of optionality due to scale, they may have high price to free cash flow/yields yet still be reasonably priced compared to more mature/old type businesses which will naturally have lower P/E. Certain regions have more companies that would be viewed as "traditional" and although you can expect a revision to mean that is less likely than when you had to do all the calculations manually and you could find alpha from this strategy. Aswath Damodaran has some really good content on value investing/life cycles and country risk I think you would enjoy it,
Menno, there's no point in using the word 'alpha' when 99% of your audience won't understand it
i really like this topic, im fine if u do more like that.
I love it! 🫡
I like the branch out into new content. Between bodybuilding, gardening, and other hobbies that involve delayed gratification, I see them all as forms of investing as well.