I think your explanation, based on GDP, of what has been happening with the market is inaccurate. It would have been accurate in a normal economy, but we have not been in one since 2008. What we are observing with the stock market is the result of quantitative easing (QE). The wealthy (large asset owners) received tons of cash because of QE and do not know where to invest, so they are pushing all asset prices, including crypto, up.
The US alone printed at least 10 trillion dollars during COVID. This is also true for the large "Magnificent Seven" companies. They have not innovated much, so they continue to buy back stock and inflate their stock prices. Wait until the new administration gives them a tax cut and see what they will do with all this cash.
The US alone printed at least 10 trillion dollars since 2020. This is also true for the large "Magnificent Seven" companies. They have not innovated much, so they continue to buy back stock and inflate their stock prices. Wait until the new administration gives them a tax cut and see what they will do with all this cash.
The USA alone printed at least 10 trillion dollars since 2020. This is also true for the large "Magnificent Seven" companies. They have not innovated much, so they continue to buy back stock and inflate their stock prices. Wait until the new administration gives them a tax cut and see what they will do with all this cash.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can I participate in this? I sincerely aspire to establish a secure financlal future and i'm eager to participate. Who is the driving force behind your success?
My CFA JULIANNE IWERSEN NIEMANN a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thank you for saving me hours of back and forth investigation into the markets. I simply copied and pasted her full name into my browser, and her website came up first in search results. She looks flawless.
My advice to new investors is to buy stocks in strong companies and hold onto them as long as they are performing well. Just follow this strategy and ignore the predictions and opinions about the financial landscape, which are often more entertaining than practical.
The key to achieving substantial returns isn’t chasing big-moving stocks; it’s about managing risk relative to reward. Position sizing is crucial, and consistently applying your edge as often as needed to reach your goals. This principle applies to everything from long-term investing to day trading.
People often underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to over $750k.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
I've shuffled through investment coaches and yes, they can be positively impactful to an individual's portfolio, but do your due diligence to find a coach with grit, one that withstood the 08' crash. For me, “Teresa L. Athas” turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
Thank you for saving me hours of back and forth investigation into the markets. found her web instantly. After reviewing her credentials and conducting due diligence, i reached out to her.
I've been in touch with a financial analyst ever since I started investing. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $150k in a little over a year, my adviser chooses entry and exit orders
I take guidance from an advisor Rebecca Lynne Buie. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Increasing wealth inequality means more and more money is out not being used to finance consumption but instead is used for chasing financial returns, elevating asset prices across the board (as you point out) and so depressing the "expected return" from stocks. But this does NOT necessarily mean the actual returns in the future will be lower, since increasing inequality is a form of compounding growth all by itself. Unless you think the distribution of wealth is going to rapidly reverse over your investing lifetime, you should not wait for high asset prices to "come back to earth", because it's pretty unlikely that they will.
exactly my thought. A lot of rich americans sits on huge assets and have ridiculous amount of money to put somewhere. They won't need that money anytime soon so yeah stocks goes up and have no reasons to go down. Those rich guys also usually tons of cash to "buy the dip" which means no dip can really happen. A lot of that money also comes from retirement plan and so is stable.
@@TheAntoine191 that essentially describes a ponzi scheme at that point where an investment is based on the perception of more money entering tomorrow rather than an underlying value. Dangerous game that. There have been several historic occasions where market valuations have become disjoint from reality and investing at those times has put the investment in a loss position for a decade or more after.
@geraldhammer2766 in the case of madoff people could always change assets. Here tell me what is the alternative investment? Real Estate has ridiculously low returns. Alternative markets all have their drawbacks and are probably also inflated by the excess income the richest people have accumulated.
I can't predict the future & I'm terrible in timing the market. So I just buy great companies at reasonable prices and hold them for the long term. If the market drops, all the better, I'll just add more to my positions in great companies. I sleep well at night regardless of what the fund managers or the markets are doing. Before the latest drop in the market was down to $95K now up to about $200K
Remember that investing in the stock market carries risks, and it’s important to do your own research and consult with a financial advisor before making any investment decisions.
I've been able to scale from (50K to 189k )in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns
ANNETTE MARIE HOLT, my CFA, is a well-known professional in her field. I advise doing more study on her qualifications. She is a great resource for anybody trying to understand the financial industry because of her many years of expertise.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Post elections is one of those things that could really contribute to portfolio growth and vice versa. I've been going hard with my investments this year and have been able to build up to 180k, Are there tips I could apply to help me grow my portfolio even more during this election season?.
If you are in cross roads or need sincere advice on the best moves to take now its best you seek an independent advisor who knows about the financial markets. It's better to hire a skilled financial planner especially if you're not one yourself. I hired one, after my retirement pension took a hit in April due to the crash.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
My CFA ’Gabriel Alberto William a renowned figure in his line of work. I recommend researching his credentials further. he has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
This is a new high … different way of addressing how Economics links with our investment returns… I haven’t seen a RUclips video like this before.. well done.
@@wernerfoerster3666yes. Albeit it doesn’t improve your spending power (better that than losing spending power if the company’s value increased by less than inflation).
I have a question to anyone on here that knows the answer. Does accessing funds from your SIPP draw a line in the sand on how much free cash you can access? For example, if you have a SIPP valued at £500k (25% tax free = £125k) and you then drawdown £10k, would any future growth in the SiPP value still enjoy growth in the tax free portion? I’m near certain that you can continue to grow your tax free balance even after accessing some of the SIPP but want to be sure. I am only 53 so have time (but have just retired).
I’ve watched many videos on finance and investing as I plan for the future. Yours are the best by far, extremely well thought out and informative. Extremely useful knowledge and insight you share.
I’ve been trying all opportunity to make money, now I’m stuck with forex trading I need someone to help me trade or invest the forex or crypto market because I'm tired of trading in losses myself. I've blown my account twice and it's frustrating..
I will advise you to seek the help of a professional because it's really hard to create a strong professional portfolio. This will help you to achieve your goals and long term financial objectives
Many won't accept this truth but allow them, they'll understand when they become bankrupt as a result of unavoidable losses trading from mere RUclips videos.
Good advice to anyone today, Don't simply retire from something; have something to retire to. Start saving, keep saving, and stick to investments. Everyone should have BTC in their portfolio.
Trading in many source of income that are independent of government paychecks is the prudent thing that everyone should be thinking about right now, especially given the global economic crisis. Good asset and digital currencies are still good trading at this time.
This is superb! Information, as a noob it gets quite difficult to handle all of this, and staying informed is a major cause, how do you go about this are you a pro investor?
As a beginner in this, it’s essential for you to have a mentor to keep you accountable. Jihan Wu is also my trade analyst, he has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
So, I've managed to stash away $85k as an emergency fund (because, you know, life happens), and now I'm eyeing the stock market like it's the next big thing. But seriously, can the market keep up this momentum? I'm trying to get a head start here, but the whole thing is giving me anxiety. Do I just jump in or wait for the next crash to be "that guy"?
I get the hesitation, but trust me, the market's like a rollercoaster-it's gonna be up and down, no matter what. You might wanna consider talking to a financial advisor. I was in the same boat, but once I spoke with mine, I felt a lot better about diversifying my investments. He helped me with all the strategy stuff I was missing out on. Just my two cents.
Totally agree on the advisor part! But, I'm also stuck on how to even find one. I know I need guidance, but I’m not sure where to look or what to even ask them. Do you have any advice on finding someone trustworthy?
There are a handful of CFAs. I've experimented with a few over the years, but I’ve stuck with Linda Aretha Reeves for some time now, and her performance has been consistently impressive. She’s well-known in her field, look her up.
I looked up Linda Aretha Reeves, and she seems like exactly what I needed! Her background and reviews are exactly what I was hoping for in a financial advisor. Definitely going to reach out to her.
I saw Linda Aretha Reeves speak at the Bloomberg Finance Summit four years ago, and her presentation was absolutely spot on. She really knows her stuff!
As I've gotten older, I've found that i have less to spend money on (apart from life's essentials). Ive been investing since 2001 and ive determined that I'll stay invested, regardless of what is going on in the world. I'm 56 and have no immediate need for the money and if the market plummets 1929 style, I'll just leave the lot to my son. He's 18 and will hopefully have the time to ride out any big crash. Personally i think a lot of investors chose the stock market as a savings tool, because interest rates were so low for savers.
What's interesting is that before 2008 or maybe even a bit earlier, you could get bank interest > inflation. Afterwards it wasn't the case. It is possible now but you have to hunt for it a bit. But then when banks and building societies can magic money out of thin air... why do they want our need to pay us to borrow our money?
Life has become faster. Cars are faster. Payment via the cloud is fast and companies send bill faster. And people expect returns on "investments" faster as a result. But the human brain hasn't got any faster. And there is always the fickle toy called fashion. But some call it investments.
Stocks returns on average 10%. Property returns on average 10.5%. if you close to retirement i'd suggest stocks as it's easier to liquidate and less upkeep
This is a very informative video, although I'm still confused. I'm worried about retirement planning and I want to ensure a comfortable future. I've worked hard my entire life and I want to enjoy the fruits of my labor without financial stress. I'm really concerned about whether I've saved enough and invested
That's true. Assess to reliable information and professional guidance is key to success in investing. That's where a CFP comes in. You should definitely consider working with one
I have been advised on that for a while, but finding one who understands what I want and can work with me to that accord is whom I'm in search of. Any recommendation please?
Yes I do, I recommend JOSEPH NICK CAHILL to you. He is a renowned figure in his field. I recommend him to you because I've been where you are and understand your need for an open ear
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying it’s ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.
The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset and knowledge to pull such trades.
Agreed! this is why I work with one. My $520k portfolio is well-matched for every market season yielding 65% rise from early last year to date. I and my advisor are working on more figures for this year. IMO, financial advisors are the most sought-after professionals after doctors.
Elisse Laparche Ewing has always been on the top of my list..She is regarded as a genius in her area and well knowledgeable about financial markets. I highly recommend you look her up if you need an excellent collaboration.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
3.81% is brutal. Still, can't do much about it besides continuing to pile as much new cash as I can afford each month into a range of stocks and hoping for the best.
I can’t believe this is the end of year already and I have investment goals I haven’t achieved yet. I hear people talk about a bull run in the financial market and I just recently sold a home. Do you suggest I utilize a financial advisor on stocks to buy, or can I do it on my own?
its just like asking if you should self-medicate, of course it’s always better to consult a doctor, so yes it’s a good idea to seek financial advise if you think you need guidance
AI stocks and Bitcoin are definitely ones to watch. I'm optimistic about growth, but with the economy still uncertain, staying diversified feels like the smart move right now.
I agree. Even with great opportunities, we should proceed cautiously. Seeking market analysis or advice from certified market strategists is important.
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until Q3 2024.
I don't know if I am permitted to go into details here, but mine is Stacy Lynn Staples and you could also look her up though I'm not so sure she's taking on new people atm.
Maybe the problem is noobs like me invest in the S&P500 companies without knowing much about the companies in it. There is too much demand for these companies because most people don’t know any better, creating a bubble.
This is the only argument I've seen that could support the "new paradigm" theory. If the overall percentage of money going into stocks from the economy is higher, then in theory it could support worse PE ratios in the longer-term. In other words we as a society value stock market investing more in the aggregate, and so returns in the stock market are more expensive. It's kind of like, if people didn't care about living in houses and were happy to just van-life if rents went up, then you'd find houses in general would be cheaper.
Which is fine until prices start to trend downwards. Suddenly the stock market will no longer be the place to put your money and the sentiment will turn rapidly leading to a correction. It is gonna happen at some point but the problem is nobody knows when.
@@Anteater23 very true but when you're retired, like me, you don't get the benefit of buying more after a correction, just the prospect of having to sell at lower prices to fund your retirement. All depends on your circumstances vs the risks of a correction.
2:11 I believe this is incorrect. You don’t add the inflation rate to the return a stock gives you. Inflation is “consumer price inflation“. It does not impact asset prices directly. The only way that CPI impacts stocks/businesses is that their revenue growth (and earnings indirectly) generally INCREASE by the rate of inflation because they are able to charge more. This means a company with revenue growth of 3% and CPI of 3% has no REAL revenue growth. All the growth recorded has come from CPI. In other words, they have no real pricing power and have had zero growth. Otherwise I agree with your major premise - the stock market cannot keep going up from here. The idea is ludicrous.
I’m honestly fed up with stocks. I’ve been putting in $2000-$3000 a month, but it’s just losses. It’s so frustrating, especially since I only pick stable, large companies. What’s the best way to succeed in this market?
With my demanding job, I can’t dedicate the time needed to evaluate my investments. For the last seven years, I’ve hired a fiduciary to actively manage my portfolio. This has led to a 330% return since the COVID outbreak, bringing my portfolio to nearly $1 million. I think this approach is worth considering for all investors.
Her name is 'Melanie Kristine Skelton' Just research the name on the internet. You’d find necessary details to work with a correspondence to set up an appointment.
Market highs are often followed by corrections, though predicting their timing and magnitude is difficult. Some analysts are warning of a 'massive' correction, which has me considering whether to adjust my $2M portfolio or explore more defensive investment options.
Consider diversifying your portfolio with a blend of stocks and stable assets. Consulting a professional could offer valuable guidance and strategies to manage market uncertainties and safeguard your investments.
Agreed. It's always wise to be proactive and consider diversifying our investments to manage risks in uncertain economic times. I delegate my day-to-day investing to an advisor ever since suffering a major steep-down late 2019, amid rona-outbreak, and as of today, I'm semi-retired with barely 25% short of my $1m retirement goal after subsequent investments
I've shuffled through a few advisors in the past, but settled with Victoria Louisa Saylor her service is exemplary and she's a genius in portfolio diversification. I'd suggest you research her further on your browser, sure you'll find her basic info.
@@NicolePangea Thank you so much. I just searched her full name online and found her website-her qualifications are outstanding! She appears highly capable.
The last 60 seconds of this video is the crucial point. I've lost count of the number of TikTok investors assuming their S&P ETFs will continue to grow at 10%. I fear they will be disappointed
Dude one of those figures is adjusted for inflation (gdp) and the other isn't (s&p 500). You can't compare them. This whole video is ridiculous. People have been forecasting the demise of the stockmarket for more than 100years.
@@patmanrick the thumbnail, the graph with the p/e and the little markers for previous crashes. The lack of any counter argument (these runs are unpredictable but the best predictor of a good year this year is that last year was also good, the idea that over performance predicts underperformance is the exact opposite of what we see when we study actual historical sequence risk). Basically all wrong from start to finish - even the bits that are right technically aren't presented in a balanced way. We old guys have heard all these arguments before many times, its never been right before so why is this time any different. What you buy with stocks is a multiple on future returns so looking back at gdp after the deflator makes no sense.
@@kxjx so where data about future expected returns is presented from a study, are you saying that data/study is wrong? I don't think the video says anything about near term sequencing other than to say that PE doesn't give us any indication about the short term (graph showing basically zero correlation), which I think is in agreement with your comment - so I'm not clear on how it's a counter argument? The video is also very clear that the stock market is forward looking, which again is what you are saying at that end of your comment. Am I missing something? Did you watch the whole thing? My takeaways from the video are: 1 - the future is uncertain, there will almost certainly be a crash or stagnation at some point, nobody knows when, but more likely than not we will have a period of weaker performance than has been seen in the past 15 years or so. 2 - over the long term just keep DCA for anyone who doesn't think they can generate alpha (which should be pretty much everyone) 3 - there are good reasons why GDP growth of X% doesn't mean that stocks should grow X%
What about all the money printing thats raises stock valuations..? And where would you reinvest ? Cash bonds? What about US 35 trilion dollar debt keeps getting higher. UK 3 trillion in gov debt . Will they default on bonds? Or will they print more cash to pay out that in turn debases the curren cy. Please discuss these points..
@@break1722 He factored in inflation right at the beginning of the video. Although I think the charts with the P/E ratio to returns at the end may not factor out inflation, which could skew the 10 year expected returns in particular
Cause as much as the stock market is influenced by economy, it is NOT the economy. The prices are based on investors expectations of future earnings so we could say that the markets will grow as long as the investors are somewhat optimistic about the future. Kind of like with bitcoin right now.
Thanks you certainly made me question my current S&P allocation. I have a question if you don’t mind… I don’t see this covered but could a reason for the overinflated prices be partly due to people’s access to investing? The reason I ask is I’m an electrician and the amount of labourers, builders, electricians, etc who tell me they are “all in on Tesla”, or “I have all my money in the S&P” is crazy. Surely the amount of people investing has a huge sway on the current prices, especially large companies like NVidia, Tesla,etc? Maybe you could mention this in a future video? Thanks for your time.
I am open to this as a theory. The idea that higher valuations (and lower returns) are here to stay because investing has become so much more accessible, the demand for risk (stocks) has increased, pushing up prices to the extent that we should have higher valuations and lower returns moving forward. However, even if that is true, you don't know when that trend will end, and stocks could keep getting more expensive for decades to come. The other side of the argument is that, if we roll back 50 years, people did not need to be as interested in investing because they had Defined Benefit pensions that looked after them in retirement. People were not necessarily investing less back then, it's just the DB scheme was doing it for them, investing huge amounts in stocks, bonds and other asset classes. As DB pensions have declined, defined contribution schemes have replaced them. Therefore, the rise of DC schemes and demand created by individual investors may be offset by the decline in DB schemes. It only seems like people are saving and investing more for retirement because we're now the ones who have to do it. Interesting graph here from the ONS on assets in DC vs DB schemes: www.ons.gov.uk/economy/investmentspensionsandtrusts/bulletins/fundedoccupationalpensionschemesintheuk/october2023tomarch2024 Also, as part of a debate on the Rational Reminder Podcast, Michael Green argues that DB schemes were a massive risk to companies (and there is a lot of evidence of that), but because they have been replaced by DC schemes, which pushes that risk on employees, companies and therefore the stock market in aggregate have become less risky. Less risk = higher valuations = lower returns. That's my understanding of it anyway, it's a very intense podcast! ruclips.net/video/qy7SlWI6PlQ/видео.htmlsi=rGxAFnBLWSccPmIf
Not quite, because there are two sides to every trade. When you buy shares (directly or through a fund) your money doesn't go to the company, your money goes to another shareholder (directly or a fund) that wants to sell those same shares, thus a negligible impact on the share price. Share prices are set by trading activity, which is dominated by institutional investors and based largely on company fundamentals, so we can still rely on prices we see as reasonably fair.
I don't think it's retail investors, but mostly rich foreign investors. People often forget the USD is the world reserve currency. So rich people and businesses across the world keep reserves of it and they invest it in US assets because they're the vast majority of USD denominated assets (foreign companies and governments will issue USD bonds, but it's very small compared to the US bond market). I think the uncertainty of COVID lead a lot more people to shift into dollars from their local currency, like what happened in 2008.
So the key point at the end is modelling a real return of 3.81% annual average. Is that for S&P500 or a global Index Fund. It just seems to be another reason to consider holding a globally diversified index fund. I have seen values of 5.5% and 6.4% representing annual average real returns so as low as 3.81% will hamper retirement hopes of the DC pot generation
3.8% is much lower than historical averages. Not sure why he thinks that pessimistic, if somebody truly would believe that they would have to invest drastically less in equities, but that would be a mistake
I have seen lots of different values quoted between 5% and 7% annual average real return which are often ambiguous on whether S&P500 or a FTSE/MSCI global Index, whether they assume folk invest consistently, don't tinker and reinvest dividends etc.
Excellent job explaining how the pricing of companies work. And that's the biggest point to take home. It should be "price" of the ownership for a company rather than "value. " people can buy up or choose not to sell and the price will go up. The return on their investment is still limited to what the company can churn for profits. And sometimes, pricing gets out of control because humans become unreasonable when they see prices going up. It works just the same when they see prices coming down. I like to think about the consequences of more people choosing to invest instead of spending their money. This could also be a price driver. People putting more money into a 401k will drive up those prices and make it more expensive to make these investments. You'd think that's just fine, just consider higher PE ratios as they rise but eventually, even super long-term investments like a 401k are going to come out. What if the largest generation is now retiring and starts withdrawing while we're having less and less kids these days? Seems to me that prices might wind up coming down at some point and it'll just be the norm for us to have taken that hit from buying when it was high and then seeing very slow returns or even losses for a decade. Be careful out there. It's not just high prices these days. We have a lot of factors at play to what's been so predictable during times when populations were growing.
Truth is that the market is really panicking at this moment and I'm worried what effect this frenzy could have on my portfolio of about 80k. Could you make any recommendations on how I could preserve my portfolio during this period and also make profit from the market situation?
It's a good idea to seek advice at the moment, unless you're an expert yourself. As someone who runs a service business and sells products on eBay, I can tell you that the economy is struggling and many people are struggling financially.
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
My CFA Carol Vivian Constable, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Globally $7.3 TRILLION was given to citizens as stimulus payments (although not one coin to me bloody hell) and 85% of it was saved not spent - this is why the stock markets have boomed. My pension went up 17% last year, after 3% and 2% the years before and with 10% inflation, so still only a long term average of a few % over inflation....
Average Inflation over the past two decades was 2.5% in the US and Europe. If would say much/most of the stimulus money is spend. Year to year stock market gains are meaning less and not driven by single stimulus.
If there are problems in the US, the whole World will be affected. The US is the biggest, most attractive, and most reliable market to invest in, and it will remain so in the foreseeable future. Therefore, diversifying into Emerging Markets or Europe does not make sense as their performance is likely to be even worse than the US in case of a crisis.
There have been many periods when emerging markets - and even European stock markets - have outperformed the U. S. market. I see no reason why it could not happen again.
@@johnstewart1814 One peculiar finding finding is that GDP growth has historically correlated rather poorly with stock market performance. There are many reasons to this, but one cause is that many companies are highly international and derive only a small share of their income from the market where they are listed.
Money moves around, one man’s loss is another man’s profit. When inflation is running high cash can earn more than stocks at less risk so money moves into bonds. When inflation falls and interest rates reduce money starts to flow out of bonds and back into the stock market. When things are looking dicey (wars, oil strife, etc) then money flows into gold and other metals. Follow the money.
The bit that James missed but has shown in the past is the timeline across 100 years. Buying and holding even when things are overpriced still reaps the best rewards over 10+ years. 10 years from now the world will be a different place and the Magnificent 7 will most probably be a different cast.
Only if you're younger and DCA'ing in all the time. If you already have a large portfolio and expect only 10 years to retirement, waiting 10 years for a -40% drop to recover is no bueno
I think one very important aspect of the markets not mentioned is that prices have been pushed up by all the quantitative easing by central banks, which also causes inflation
@@dawnmartyne Hi Dawn, Maybe he isn't that knowledgeable. I think his video was excellent, apart from ignoring the huge amount of printing of money that's gone on for many years. Real wages haven't moved for about 25 years because of it. What do you do for a living? Peter
QE doesn't cause inflation, although the helicopter money during COVID did, but the two are quite different things. See the "Money & Macro" video on QE.
I hope so ...but ready for any changes in direction. Thanks for your great adviceJames,it helped my dad a lot after mum passed away last year. Regularly watching from Sweden ..cheers Dave
At 10:30 the balloon and the mountain, funny enough, a balloon will burst at high altitude. Could have gotten more out of that metaphor. The pressure inside the balloon from the air it contains, becomes greater than the outside pressure, the balloon expands because the air inside pushes outward more than the reduced atmospheric pressure pushes inward. As so the higher altitudes, the higher atmospheric pressure decreases significantly, if the balloon expands beyond its elastic limit, it can burst. And if so it inflates and lets some air out because of the pressure, the balloon loses its elasticity and stiffness. Stocks will burst and will lose its value (stiffness).
Thank you for mentioning Sarah Jennine Davis in one of your video! I decided to check her out, and it's been a game-changer. Over 8 months, I've managed to save $400k, clear my debts, and my portfolio's now over $200k. Anyone else had success with her strategies?
Hi James - thanks for all your great videos this year, I have learnt so much. Would you be able to advise on salary sacrifice schemes and the risks/benefits? Can we save a lot of NI contributions under this arrangement?
The rich are money-minded; that's a lesson I've grasped from the very beginning. My desire to build wealth has always been strong. I’ve been saving up some money since 2020, and I’m eager to invest it in the stock market to grow my financial future. is now the right moment to buy or not?
I think the safest strategy is to diversify investments. But if you need proper advice, consider speaking with a financial expertise. Don't get me wrong, you can do it on your own, but financial advisors have a lot more knowledge and expertise in this area.
I agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000
Judith B. Richards, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for the suggestion! I really needed it. I looked her up on Google and explored her website; she has an impressive background in investments. I've sent her an email, and I hope to hear back from her soon.
Is it a valid point that so much money enters stocks every month via compulsory employee contributions, into etfs, and that is only going to increase, that is fueling higher multiples in valuations for longer than before because theres always buyers , just a thought
Knowledgeable Investors know where and how to put money during a crisis in order to reduce risk and maximize returns. See a market strategist with experience if you are unable to manage these market conditions.
It seems like there's potential, but caution is warranted. hence I will advice you get yourself a financial advisor that can provide you with entry and exit points
Right, I delegate my day-to-day investing to an advisor ever since suffering a major steep-down late 2019, amid rona-outbreak, and as of today, I'm semi-retired with barely 25% short of my $1m retirement goal after subsequent investments.
It is sustainable. This advice is typical after a big run. The future has no relation to the past...it is writing 'new history', which might be similar to the past, but is really new history. I recommend to James that he take a major short, if he is so confident. I remember in the 1990's, 5 years of S&P 500 > 20% - many folks came screeming, down, down, down just like James is. I am staying in, 100%. Most folks miss on economic productivity, which has returned to the USA economy.
Great video, the only thing for is that people seem to forget the S&P 500 average return of around 10% includes time periods of underperformance like we may see, yet it still has outperformed the global approach over the long term so given I’m very young with such a long time horizon I don’t mind being so heavy on the s&p 500 but I definitely see the pros and cons to both sides
Yes I agree and also we have to mindful that a lot of the S&P 500 companies may change and the fact that a low cost ETF tracks it all and does it for you whilst you sleep with next to no charges has to be good! Majority of these businesses are also globally diversified as well in their own right so I see no need to exit the S&P 500
To obtain financial freedom, one must either be a business owner, an investor or both, generating passive income particularly on a weekly or m8onthly basis. That’s the key to living financially stable...
I want to compliment you, you have said it all. I am a little business owner and I really want to expand my business to the next level by making myself an investor but I really don't know how to go about it..
I love your content James, it’s so well thought out and considered. Any chance you are considering doing something on bonds? Loads of the standing advice is around things like the 120 rule but I can’t find any content that models why you need to do this or really sets out the advantages at all. It just seems to be tons of content on stocks and “oh by the way, ramp up your portfolio into bonds because that’s just what you do”. I feel like there is a man that can help explain this better… Feels like it could be a companion piece to this given I understand they move in somewhat opposite directions (allegedly)
My target retirement fund in my 401(k) had poor returns compared to the S&P 500. I switched everything to the S&P 500, but I regret not doing it earlier. What are the best options for investing $200k for reliable cash flow?
The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again
Credits goes to "Mary Elizabeth Fugelsang" one of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.
Great advice as always. I went heavily into US technology stocks about 6 years ago when I transferred my pension into a SIPS account. It has worked wonders for me, currently producing a 5 years annualised return of 15.05% (weighted across the various funds). Your base line return figure is very sobering and will temper my expenditure / drawdown going forward.
I feel investors should focus on under-the-radar stocks, considering the current rise of the stock market since trump was pronounced winner of the united state election. 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Svetlana Sarkisian Chowdhury has always been on the top of my list..She is regarded as a genius in her area and well knowledgeable about financial markets. I highly recommend you look her up if you want excellent collaboration..
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Even if you just went for a global index majority of it is US companies and then even the developed countries non US make majority of their money in the US anyway so you can't really avoid said currency risk. Nearly 80% of the FTSE 100 revenue (the top 100 UK companies) for example in UK comes from non UK geographic markets thus exposed to multitudes of currencies even if you thought you were buying UK index in GBP. You really can't miss it unless you purely go small/medium cap UK only and even then there's still international exposure.
@ fair point, but if you buy FTSE companies, you're buying in GBP. Also if you want to diversify your portfolio e.g. with bonds, gold, cash, you won't get the full benefits of diversifying unless it's all in your own jurisdiction. Also inflation, interest rates in UK for example, may behave very differently to US, Australia, Japan etc.
@scotdoc just because you're buying the share in GBP, it's performance is massively exposed to other currencies and their relative value at the time considering nearly 80% of the revenues are non UK denominated. Has a similar impact but you just don't see it easily.
@@BaileyMxX yes I agree. That's part of the reason my stocks are in the FTSE 350. Take a look at Max King's comments in MoneyWeek this week. He presents a case for why the FTSE will perform very well going forward. We'll see. US outlook is 3% according to Goldman Sachs. US market is massively over-valued.
I have a question for the thread generally. I have a relatively small DB pension from a job I did 30 years ago. It makes up about 5-10% of my pension assets and having done the maths I would like take the current transfer value and switch to my SIPP. I am pretty good at maths and the sums aren’t that complicated but I know I legally have to take financial advice that I don’t want/need to get my answer (plus paying for the advice makes the transfer less advantageous) and they may recommend I don’t transfer. Value is over £30k and am aware of threshold. Anyone have any suggestions?
Keep the small DB private pension as it will be index linked guaranteed income in retirement to add to the state pension. It isn't worth transferring the DB pension to a SIPP unless the cash equivalent transfer value is many times more than the present day value of the DB pension, as a minimum this would be 20x to transfer and ideally many times more. Also relatively high FA fees will eat into the CETV.
Ok, but... where else will people park their money? Housing is overpriced. Farmland is overpriced. Bonds have crappy returns. Do we just suck it up, cash out, prepare for a brutal correction, and then bargain hunt? When? Timing the market is a fool's errand.
wdym bonds are overpriced. They're looking great right now after the recent correction. Direct property too, but you gotta have a 10 year hodl mindset for them.
Hi, can someone help answer a question for me? If I have a large SIPP and have retired and have no income except perhaps a state pension ( UK) and wish to drawdown an arbitrary amount of £500k what would be the income tax rate on this please? Assume I have taken all tax free money from pension up to the limit at this point. If my understanding is correct it is based on your marginal rate of tax but not 100% clear if that goes up if you drawdown a large amount even if regular income is negligible. What would be the % income tax rate on this drawdown in above scenario please?
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Grace Miller.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm celebrating a $30k stock portfolio today. started this journey with 6k. I have invested on time and also with the right terms now I have time for my family and the life ahead of me
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
Have to thank you James for all of your videos over the years. Nobody else has helped me to have a more informed opinion of what I need to be doing in planning for retirement And no I am not a bot 🤣
Depends how long "long term" is. There have been several times in history when you failed to break even with US stocks (in real terms), even after 20 years of waiting.
@@chrisf1600 I now only invest in VUAG and VWRP. With a long term view you would be very unlucky not to make money…..the last 12 months have been ridiculous for making money.
@@MrQuay03 1922, 1949 and 1983 all had practically zero real returns over the trailing 20 year period, even after reinvesting all dividends. If you're interested in seeing the results for other holding periods, search "The Latest Look At The Total Return Roller Coaster" (surprisingly, even 30 years isn't "safe" if you're unlucky enough to be born at the wrong time)
Hasn’t it been like this for years though? Do you think the fact that every day people get to invest now has any impact on the the market and the way we value companies? Should we value companies the same now that There is more access to the stock market?
To be kinda blunt, I am giving up on investing in stocks... I put between 2000 to 3000 a month and it's nothing but down down.... SOOO frustrating and I only invest in boring big companies. How can I capitalize in such a market?
I rely on a fiduciary to manage my investments since emotions can lead to bad decisions. Melanie Kristine Skelton, my CFA, created a strategy for my long-term goals, and my portfolio has grown to over $850k.
Very good point about the difference in valuation for large versus mid caps. The S&P 500 is market cap weighted, so it's very biased to those large cap companies, but there's ETFs like RSP that's the S&P 500, but every company is equally weighted so mid cap companies are far better represented than in the regular S&P 500. And of course there's ETFs dedicated to just mid cap companies.
I have been trying to grow my savings and i wonder which is better the stock market or crypto, i keep seeing a lot of good news about the stock market but i am not familiar with the strategy. Any recommendation will be highly appreciated
The stock market is likely the best smart investment. However, if you are thinking of investing in the stock market and you are not well versed, its advisable to work with a financial advisor who is an expert to guide you through the process. this way you could make more profit with less risk
Right.. based on my experience with an investment advisor, I have $385k in a diversified portfolio that's grown significantly. It's crucial to be knowledgeable and persistent in stocks, especially during market fluctuations. I believe the stock market is the best investment, and while I have some crypto, I've made much more profit from stocks.
Talking about a financial market specialist, do you consider anyone worthy of recommendations? I have some money to test the waters now that large cap stocks are at a discount... Thanks
Judith Lynn Staufer a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for the suggestion! I really needed it. I looked her up on Google and explored her website; she has an impressive background in investments. I've sent her an email, and I hope to hear back from her soon!
Great explanation James! For myself I only invest in the S&P 500, because in bull markets concentration increases. The US makes up 90% of the MSCI world top 100 index. If there was a retail MSCI 100 fund I'd invest in that. Unfortunately there isn't, and direct indexing 100 constituents is a faff. So GSPC it is!
Great stuff. It's amazing how few people understand what generates stock returns over the long run. Most seem to think that it's purely earnings growth, which probably explains why so many investors seem to want to yolo into high-growth tech stocks. The idea that you can make a healthy return from a company that isn't even growing is mind-blowing to some :) This is the clearest explanation I think I've ever seen, great job.
I have invested in FTSE global all cap etf for 15 years, and my investment is currently worth just over £650K. I was looking at changing how I invest recently and discovered had I been putting the money into an S&P 500 index etf my portfolio would now be worth just under £1.1M, yes, over £450K more
@Thaitanium73 hahaha yeah chalk that up to the tech giants. Could have just as easily been a big flop though right, we can't know these things. I still can't believe how much AI hype has skyrocketed Nvidia... and I can't even count the amount of times I've said Bitcoins overvalued and not worth investing in 🤣 You've made me want to swap my investments over to S&P tho.....
@@Thaitanium73Hindsight can be a dangerous thing. I bought 100 Carnival shares a couple of years ago - not just as an investment but also to get on-board credit when we sail on their ships. Shares are now around 260% of what I paid. Should I have bought more ?? TBH that sounds like gambling more than investing. My aim is to beat inflation, not getting rich overnight. Without a DeLorean and 1.21 Gigawatts I think I'm okay with the outcome
James. What about if im in camp 1 ..... i believe that markets are often irrational and that they get prices wrong ...... but that i also believe they will continue to do that for many years, which will keep prices irrationally high, for the long term 😅.
This not financial advice, but I share your conundrum. I chose to grow a beard, which I can stroke while I'm staring out the window and pondering the future. When a bird lands on the clothesline, I stop pondering and I say to myself; "bird". If a bird fails to land on the clothesline, I keep stroking my beard and pondering, uninterrupted.
The same Goldman that predicted s&p500 to hit 4700 by end of 2024 which they revised to 5100. Now as I type sits at 6048. These comedians couldn’t find their @rse with both hands
Hi James - when you say “Globally Diversified Portfolio”; obviously this means diversification by country, but does (or should) it also mean diversification between small and large cap indexes?
Good for you! I assume you’ll be investing each month for many years to come. Some of those times the market will be high and some will be low - there’s no way to tell for certain which is which in advance - and they’ll balanced themselves out over time. So that, over the long term, no matter when you start investing, the stock market is likely to be a great tool for building wealth.
@@JamesShackThanks. It is a bit concerning but I will put in maybe £200 a month anyway instead of a lump sum. This is a clear warning sign and it would be foolish to ignore it.
@@pingupenguin2474 I think a good idea is to invest regularly and in the case the market nosedived then actually increase your investments to lower your avg. price
This is an awesome explainer. If you look at stock growth as the 3 headed monster of GDP growth, inflation and returns, I think there are structural changes in society- mainly the end of the demographic dividend across much of the planet- that atrophies all 3 to varying extents, which I imagine will suppress interest rates and put a premium on yield. A lot of the machinations of the markets over the last century can be explained by these 3 factors and I think can be used to project somewhat into the future. A lot of smart folks project their predictions on these factors through interest rates, which even at recent "highs" are much lower than historical norms.
Maby we also have to take inequality into account, wich is growing, that means we have more people that can’t really do anything else then putting it into assets. So maby we will have a other ratio of earnings to value in the future. Still I think that ratio could be lower than it is now.
@@random.mandembecause crypto currencies suddenly have a tangible value 😂. Huge risk but big reward unless you are the person holding the somewhat worthless parcel when the music stops.
Also the way the inflation rate is calculated doesn't reflect the true inflation which is solely caused by quantitative easing. Supply and demand mean nothing as the market always dictates prices on a long term timescale.
Great vid as ever, James. But I didn’t understand your final comment. Like you I am in camp 2 and know I can’t out wit the markets. I have a single Global Index all equity fund which suits my risk appetite - which as near as dam it is an S&P index fund. Why do I have some thinking to do? Many thanks Pallab
The content of this video is really valuable! Explaining the relationship between the stock market and the economy in such a clear way helps us gain the right perspective when investing. The examples and analysis provided were very informative. I'd definitely love to see more content like this!
all this is great IF market prices actually did strictly follow these concepts. but honestly they are all just that, concepts.. market pricing is determined by a willing buyer and willing seller. that’s all it is.
Please be mindful of bots in the comments that are trying to scam people. If you spot them, please report them. 👍
the answer is actualy printing money
I think your explanation, based on GDP, of what has been happening with the market is inaccurate. It would have been accurate in a normal economy, but we have not been in one since 2008. What we are observing with the stock market is the result of quantitative easing (QE). The wealthy (large asset owners) received tons of cash because of QE and do not know where to invest, so they are pushing all asset prices, including crypto, up.
The US alone printed at least 10 trillion dollars during COVID. This is also true for the large "Magnificent Seven" companies. They have not innovated much, so they continue to buy back stock and inflate their stock prices. Wait until the new administration gives them a tax cut and see what they will do with all this cash.
The US alone printed at least 10 trillion dollars since 2020. This is also true for the large "Magnificent Seven" companies. They have not innovated much, so they continue to buy back stock and inflate their stock prices. Wait until the new administration gives them a tax cut and see what they will do with all this cash.
The USA alone printed at least 10 trillion dollars since 2020. This is also true for the large "Magnificent Seven" companies. They have not innovated much, so they continue to buy back stock and inflate their stock prices. Wait until the new administration gives them a tax cut and see what they will do with all this cash.
The stock market is where patience meets opportunity; long-term growth comes from consistent action.
Consistency in investing is crucial for long-term success, especially in the stock market.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can I participate in this? I sincerely aspire to establish a secure financlal future and i'm eager to participate. Who is the driving force behind your success?
My CFA JULIANNE IWERSEN NIEMANN a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thank you for saving me hours of back and forth investigation into the markets. I simply copied and pasted her full name into my browser, and her website came up first in search results. She looks flawless.
My advice to new investors is to buy stocks in strong companies and hold onto them as long as they are performing well. Just follow this strategy and ignore the predictions and opinions about the financial landscape, which are often more entertaining than practical.
The key to achieving substantial returns isn’t chasing big-moving stocks; it’s about managing risk relative to reward. Position sizing is crucial, and consistently applying your edge as often as needed to reach your goals. This principle applies to everything from long-term investing to day trading.
People often underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to over $750k.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
I've shuffled through investment coaches and yes, they can be positively impactful to an individual's portfolio, but do your due diligence to find a coach with grit, one that withstood the 08' crash. For me, “Teresa L. Athas” turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
Thank you for saving me hours of back and forth investigation into the markets. found her web instantly. After reviewing her credentials and conducting due diligence, i reached out to her.
Investing in stocks is planting a tree for your future; with patience, it will bear fruit.
Just like a tree, investments need time and care to reach their full potential.
I've been in touch with a financial analyst ever since I started investing. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $150k in a little over a year, my adviser chooses entry and exit orders
Mind if I ask you to recommend this particular coach you using their service? Seems you've figured it all out.
I take guidance from an advisor Rebecca Lynne Buie. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
I just Googled her name and her website came up right away. It looks interesting so far. I sent her an email and i hope she responds soon.
Increasing wealth inequality means more and more money is out not being used to finance consumption but instead is used for chasing financial returns, elevating asset prices across the board (as you point out) and so depressing the "expected return" from stocks. But this does NOT necessarily mean the actual returns in the future will be lower, since increasing inequality is a form of compounding growth all by itself. Unless you think the distribution of wealth is going to rapidly reverse over your investing lifetime, you should not wait for high asset prices to "come back to earth", because it's pretty unlikely that they will.
exactly my thought. A lot of rich americans sits on huge assets and have ridiculous amount of money to put somewhere. They won't need that money anytime soon so yeah stocks goes up and have no reasons to go down. Those rich guys also usually tons of cash to "buy the dip" which means no dip can really happen. A lot of that money also comes from retirement plan and so is stable.
@@TheAntoine191 that essentially describes a ponzi scheme at that point where an investment is based on the perception of more money entering tomorrow rather than an underlying value.
Dangerous game that.
There have been several historic occasions where market valuations have become disjoint from reality and investing at those times has put the investment in a loss position for a decade or more after.
@geraldhammer2766 in the case of madoff people could always change assets. Here tell me what is the alternative investment? Real Estate has ridiculously low returns. Alternative markets all have their drawbacks and are probably also inflated by the excess income the richest people have accumulated.
I can't predict the future & I'm terrible in timing the market. So I just buy great companies at reasonable prices and hold them for the long term. If the market drops, all the better, I'll just add more to my positions in great companies. I sleep well at night regardless of what the fund managers or the markets are doing. Before the latest drop in the market was down to $95K now up to about $200K
Remember that investing in the stock market carries risks, and it’s important to do your own research and consult with a financial advisor before making any investment decisions.
I've been able to scale from (50K to 189k )in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns
@@JamesDinsdale-e6q I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
ANNETTE MARIE HOLT, my CFA, is a well-known professional in her field. I advise doing more study on her qualifications. She is a great resource for anybody trying to understand the financial industry because of her many years of expertise.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Post elections is one of those things that could really contribute to portfolio growth and vice versa. I've been going hard with my investments this year and have been able to build up to 180k, Are there tips I could apply to help me grow my portfolio even more during this election season?.
If you are in cross roads or need sincere advice on the best moves to take now its best you seek an independent advisor who knows about the financial markets. It's better to hire a skilled financial planner especially if you're not one yourself. I hired one, after my retirement pension took a hit in April due to the crash.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
My CFA ’Gabriel Alberto William a renowned figure in his line of work. I recommend researching his credentials further. he has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thank you for putting this out, it has rekindled the fire to my goal
BS. NASDAQ went from 10895 to 18500 in 4 Years. Despite 5% rates pushing down revenue and profits.
James takes it to another level. I'm going to need to watch this again.
This is a new high … different way of addressing how Economics links with our investment returns… I haven’t seen a RUclips video like this before.. well done.
Couldn't agree more. Even by James' high standards this is good!
Wait ... inflation adds value to a company?? 2:10
My returns are 3.8% over last 5 years. What should I do?
@@wernerfoerster3666yes. Albeit it doesn’t improve your spending power (better that than losing spending power if the company’s value increased by less than inflation).
I have a question to anyone on here that knows the answer. Does accessing funds from your SIPP draw a line in the sand on how much free cash you can access? For example, if you have a SIPP valued at £500k (25% tax free = £125k) and you then drawdown £10k, would any future growth in the SiPP value still enjoy growth in the tax free portion? I’m near certain that you can continue to grow your tax free balance even after accessing some of the SIPP but want to be sure. I am only 53 so have time (but have just retired).
I’ve watched many videos on finance and investing as I plan for the future. Yours are the best by far, extremely well thought out and informative. Extremely useful knowledge and insight you share.
Thanks for saying so!
I’ve been trying all opportunity to make money, now I’m stuck with forex trading I need someone to help me trade or invest the forex or crypto market because I'm tired of trading in losses myself. I've blown my account twice and it's frustrating..
I do see it that forex and crypto trading is one of the profitable money exchange services that elevates investors and their financial status.
I will advise you to seek the help of a professional because it's really hard to create a strong professional portfolio. This will help you to achieve your goals and long term financial objectives
Well, I think people loss funds because they want to trade on their own without the help of an expert
Most people today have been having a lot of failures in forex and crypto because of poor orientation and bad experts.
Many won't accept this truth but allow them, they'll understand when they become bankrupt as a result of unavoidable losses trading from mere RUclips videos.
Good advice to anyone today, Don't simply retire from something; have something to retire to. Start saving, keep saving, and stick to investments.
Everyone should have BTC in their portfolio.
Trading in many source of income that are independent of government paychecks is the prudent thing that everyone should be thinking about right now, especially given the global economic crisis. Good asset and digital currencies are still good trading at this time.
This is superb! Information, as a noob it gets quite difficult to handle all of this, and staying informed is a major cause, how do you go about this are you a pro investor?
A big thanks to Jihan Wu with his trading advice, at least I can afford a good home and also have to retire early.
As a beginner in this, it’s essential for you to have a mentor to keep you accountable.
Jihan Wu is also my trade analyst, he has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
Jihan Wu Services has set the standard for others to follow, we love him here in Canada 🇨🇦 as he has been really helpful and changed lots of lives
So, I've managed to stash away $85k as an emergency fund (because, you know, life happens), and now I'm eyeing the stock market like it's the next big thing. But seriously, can the market keep up this momentum? I'm trying to get a head start here, but the whole thing is giving me anxiety. Do I just jump in or wait for the next crash to be "that guy"?
I get the hesitation, but trust me, the market's like a rollercoaster-it's gonna be up and down, no matter what. You might wanna consider talking to a financial advisor. I was in the same boat, but once I spoke with mine, I felt a lot better about diversifying my investments. He helped me with all the strategy stuff I was missing out on. Just my two cents.
Totally agree on the advisor part! But, I'm also stuck on how to even find one. I know I need guidance, but I’m not sure where to look or what to even ask them. Do you have any advice on finding someone trustworthy?
There are a handful of CFAs. I've experimented with a few over the years, but I’ve stuck with Linda Aretha Reeves for some time now, and her performance has been consistently impressive. She’s well-known in her field, look her up.
I looked up Linda Aretha Reeves, and she seems like exactly what I needed! Her background and reviews are exactly what I was hoping for in a financial advisor. Definitely going to reach out to her.
I saw Linda Aretha Reeves speak at the Bloomberg Finance Summit four years ago, and her presentation was absolutely spot on. She really knows her stuff!
As I've gotten older, I've found that i have less to spend money on (apart from life's essentials). Ive been investing since 2001 and ive determined that I'll stay invested, regardless of what is going on in the world. I'm 56 and have no immediate need for the money and if the market plummets 1929 style, I'll just leave the lot to my son. He's 18 and will hopefully have the time to ride out any big crash.
Personally i think a lot of investors chose the stock market as a savings tool, because interest rates were so low for savers.
That's pretty much my philosophy.
What's interesting is that before 2008 or maybe even a bit earlier, you could get bank interest > inflation. Afterwards it wasn't the case. It is possible now but you have to hunt for it a bit. But then when banks and building societies can magic money out of thin air... why do they want our need to pay us to borrow our money?
Life has become faster. Cars are faster. Payment via the cloud is fast and companies send bill faster. And people expect returns on "investments" faster as a result. But the human brain hasn't got any faster. And there is always the fickle toy called fashion. But some call it investments.
Agree, and cash in the bank is killed by inflation so we are forced to put money into either the stock market or real estate.
Stocks returns on average 10%. Property returns on average 10.5%. if you close to retirement i'd suggest stocks as it's easier to liquidate and less upkeep
This is a very informative video, although I'm still confused. I'm worried about retirement planning and I want to ensure a comfortable future. I've worked hard my entire life and I want to enjoy the fruits of my labor without financial stress. I'm really concerned about whether I've saved enough and invested
That's completely understandable . Ensuring financial security in retirement is crucial. Have you considered consulting a financial advisor?
That's true. Assess to reliable information and professional guidance is key to success in investing. That's where a CFP comes in. You should definitely consider working with one
I have been advised on that for a while, but finding one who understands what I want and can work with me to that accord is whom I'm in search of. Any recommendation please?
Yes I do, I recommend JOSEPH NICK CAHILL to you. He is a renowned figure in his field. I recommend him to you because I've been where you are and understand your need for an open ear
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying it’s ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.
The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset and knowledge to pull such trades.
Agreed! this is why I work with one. My $520k portfolio is well-matched for every market season yielding 65% rise from early last year to date. I and my advisor are working on more figures for this year. IMO, financial advisors are the most sought-after professionals after doctors.
Glad to have stumbled on this comment, Please who is the consultant that assist you and if you don't mind, how do I get in touch with them?
Elisse Laparche Ewing has always been on the top of my list..She is regarded as a genius in her area and well knowledgeable about financial markets. I highly recommend you look her up if you need an excellent collaboration.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
3.81% is brutal. Still, can't do much about it besides continuing to pile as much new cash as I can afford each month into a range of stocks and hoping for the best.
That's the reality. What else are you gonna invest in?!
If that's the price we currently put on risk then... that's the price.
@@JamesShack What? Small cap value. Extremely cheap compared to the past.
I can’t believe this is the end of year already and I have investment goals I haven’t achieved yet. I hear people talk about a bull run in the financial market and I just recently sold a home. Do you suggest I utilize a financial advisor on stocks to buy, or can I do it on my own?
its just like asking if you should self-medicate, of course it’s always better to consult a doctor, so yes it’s a good idea to seek financial advise if you think you need guidance
Just give your money to scammers in the comments… that is the best investment.
@YubiLeevdisshe’s dead.
Best analysis of valuations I’ve seen.
Thanks Joe, love your content!
AI stocks and Bitcoin are definitely ones to watch. I'm optimistic about growth, but with the economy still uncertain, staying diversified feels like the smart move right now.
I agree. Even with great opportunities, we should proceed cautiously. Seeking market analysis or advice from certified market strategists is important.
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until Q3 2024.
I could really use the expertise of an advisor like that.
I don't know if I am permitted to go into details here, but mine is Stacy Lynn Staples and you could also look her up though I'm not so sure she's taking on new people atm.
Maybe the problem is noobs like me invest in the S&P500 companies without knowing much about the companies in it. There is too much demand for these companies because most people don’t know any better, creating a bubble.
This is the only argument I've seen that could support the "new paradigm" theory. If the overall percentage of money going into stocks from the economy is higher, then in theory it could support worse PE ratios in the longer-term. In other words we as a society value stock market investing more in the aggregate, and so returns in the stock market are more expensive. It's kind of like, if people didn't care about living in houses and were happy to just van-life if rents went up, then you'd find houses in general would be cheaper.
You don't need to know about the companies.
Which is fine until prices start to trend downwards. Suddenly the stock market will no longer be the place to put your money and the sentiment will turn rapidly leading to a correction. It is gonna happen at some point but the problem is nobody knows when.
@ Investing is long term game so corrections aren’t a big deal. Invest through them and you get the cheaper prices too.
@@Anteater23 very true but when you're retired, like me, you don't get the benefit of buying more after a correction, just the prospect of having to sell at lower prices to fund your retirement. All depends on your circumstances vs the risks of a correction.
2:11 I believe this is incorrect. You don’t add the inflation rate to the return a stock gives you. Inflation is “consumer price inflation“. It does not impact asset prices directly. The only way that CPI impacts stocks/businesses is that their revenue growth (and earnings indirectly) generally INCREASE by the rate of inflation because they are able to charge more. This means a company with revenue growth of 3% and CPI of 3% has no REAL revenue growth. All the growth recorded has come from CPI. In other words, they have no real pricing power and have had zero growth.
Otherwise I agree with your major premise - the stock market cannot keep going up from here. The idea is ludicrous.
I’m honestly fed up with stocks. I’ve been putting in $2000-$3000 a month, but it’s just losses. It’s so frustrating, especially since I only pick stable, large companies. What’s the best way to succeed in this market?
Great Buying opportunities today. Embracing pullbacks and correction is key. This is where the money is made!
With my demanding job, I can’t dedicate the time needed to evaluate my investments. For the last seven years, I’ve hired a fiduciary to actively manage my portfolio. This has led to a 330% return since the COVID outbreak, bringing my portfolio to nearly $1 million. I think this approach is worth considering for all investors.
I’m amazed! Mind sharing more? As an adult living in Miami, I’ve met several millionaires, and I’m hoping to reach that level too.
Her name is 'Melanie Kristine Skelton' Just research the name on the internet. You’d find necessary details to work with a correspondence to set up an appointment.
I just curiously searched her up, and I have sent her an email. I hope she gets back to me soon. Thank you
Market highs are often followed by corrections, though predicting their timing and magnitude is difficult. Some analysts are warning of a 'massive' correction, which has me considering whether to adjust my $2M portfolio or explore more defensive investment options.
Consider diversifying your portfolio with a blend of stocks and stable assets. Consulting a professional could offer valuable guidance and strategies to manage market uncertainties and safeguard your investments.
Agreed. It's always wise to be proactive and consider diversifying our investments to manage risks in uncertain economic times. I delegate my day-to-day investing to an advisor ever since suffering a major steep-down late 2019, amid rona-outbreak, and as of today, I'm semi-retired with barely 25% short of my $1m retirement goal after subsequent investments
I and my spouse been considering going the same route, could you share more info please on the advisor that guided you to such impressive gains
I've shuffled through a few advisors in the past, but settled with Victoria Louisa Saylor her service is exemplary and she's a genius in portfolio diversification. I'd suggest you research her further on your browser, sure you'll find her basic info.
@@NicolePangea Thank you so much. I just searched her full name online and found her website-her qualifications are outstanding! She appears highly capable.
The last 60 seconds of this video is the crucial point. I've lost count of the number of TikTok investors assuming their S&P ETFs will continue to grow at 10%. I fear they will be disappointed
Dude one of those figures is adjusted for inflation (gdp) and the other isn't (s&p 500). You can't compare them. This whole video is ridiculous. People have been forecasting the demise of the stockmarket for more than 100years.
What about the video is ridiculous?
@@patmanrick the thumbnail, the graph with the p/e and the little markers for previous crashes. The lack of any counter argument (these runs are unpredictable but the best predictor of a good year this year is that last year was also good, the idea that over performance predicts underperformance is the exact opposite of what we see when we study actual historical sequence risk). Basically all wrong from start to finish - even the bits that are right technically aren't presented in a balanced way. We old guys have heard all these arguments before many times, its never been right before so why is this time any different. What you buy with stocks is a multiple on future returns so looking back at gdp after the deflator makes no sense.
I’ve seen it worse than this. People recommending borrowing (at 6%) to invest because they were expecting 15%+
@@kxjx so where data about future expected returns is presented from a study, are you saying that data/study is wrong?
I don't think the video says anything about near term sequencing other than to say that PE doesn't give us any indication about the short term (graph showing basically zero correlation), which I think is in agreement with your comment - so I'm not clear on how it's a counter argument?
The video is also very clear that the stock market is forward looking, which again is what you are saying at that end of your comment.
Am I missing something? Did you watch the whole thing?
My takeaways from the video are:
1 - the future is uncertain, there will almost certainly be a crash or stagnation at some point, nobody knows when, but more likely than not we will have a period of weaker performance than has been seen in the past 15 years or so.
2 - over the long term just keep DCA for anyone who doesn't think they can generate alpha (which should be pretty much everyone)
3 - there are good reasons why GDP growth of X% doesn't mean that stocks should grow X%
What about all the money printing thats raises stock valuations..? And where would you reinvest ? Cash bonds? What about US 35 trilion dollar debt keeps getting higher. UK 3 trillion in gov debt . Will they default on bonds? Or will they print more cash to pay out that in turn debases the curren cy. Please discuss these points..
The US government won’t default on its loans. The reason they can have this much debt is because the dollar is what’s used all around the world.
@@gamingwitharlen2267 They will inflate away the debt.
Yes he’s missing a huge factor, stock market goes up in nominal terms, (following inflation) regardless of growth.
@@break1722 He factored in inflation right at the beginning of the video. Although I think the charts with the P/E ratio to returns at the end may not factor out inflation, which could skew the 10 year expected returns in particular
Cause as much as the stock market is influenced by economy, it is NOT the economy. The prices are based on investors expectations of future earnings so we could say that the markets will grow as long as the investors are somewhat optimistic about the future. Kind of like with bitcoin right now.
I normally watch to validate what I already know. I learned lots in this video
Thanks you certainly made me question my current S&P allocation. I have a question if you don’t mind… I don’t see this covered but could a reason for the overinflated prices be partly due to people’s access to investing?
The reason I ask is I’m an electrician and the amount of labourers, builders, electricians, etc who tell me they are “all in on Tesla”, or “I have all my money in the S&P” is crazy.
Surely the amount of people investing has a huge sway on the current prices, especially large companies like NVidia, Tesla,etc?
Maybe you could mention this in a future video? Thanks for your time.
I am open to this as a theory.
The idea that higher valuations (and lower returns) are here to stay because investing has become so much more accessible, the demand for risk (stocks) has increased, pushing up prices to the extent that we should have higher valuations and lower returns moving forward.
However, even if that is true, you don't know when that trend will end, and stocks could keep getting more expensive for decades to come.
The other side of the argument is that, if we roll back 50 years, people did not need to be as interested in investing because they had Defined Benefit pensions that looked after them in retirement. People were not necessarily investing less back then, it's just the DB scheme was doing it for them, investing huge amounts in stocks, bonds and other asset classes.
As DB pensions have declined, defined contribution schemes have replaced them. Therefore, the rise of DC schemes and demand created by individual investors may be offset by the decline in DB schemes.
It only seems like people are saving and investing more for retirement because we're now the ones who have to do it.
Interesting graph here from the ONS on assets in DC vs DB schemes: www.ons.gov.uk/economy/investmentspensionsandtrusts/bulletins/fundedoccupationalpensionschemesintheuk/october2023tomarch2024
Also, as part of a debate on the Rational Reminder Podcast, Michael Green argues that DB schemes were a massive risk to companies (and there is a lot of evidence of that), but because they have been replaced by DC schemes, which pushes that risk on employees, companies and therefore the stock market in aggregate have become less risky. Less risk = higher valuations = lower returns. That's my understanding of it anyway, it's a very intense podcast!
ruclips.net/video/qy7SlWI6PlQ/видео.htmlsi=rGxAFnBLWSccPmIf
Not quite, because there are two sides to every trade.
When you buy shares (directly or through a fund) your money doesn't go to the company, your money goes to another shareholder (directly or a fund) that wants to sell those same shares, thus a negligible impact on the share price.
Share prices are set by trading activity, which is dominated by institutional investors and based largely on company fundamentals, so we can still rely on prices we see as reasonably fair.
Big difference between being in one stock like Tesla and being in the S&P which is 500 companies.
I don't think it's retail investors, but mostly rich foreign investors. People often forget the USD is the world reserve currency. So rich people and businesses across the world keep reserves of it and they invest it in US assets because they're the vast majority of USD denominated assets (foreign companies and governments will issue USD bonds, but it's very small compared to the US bond market). I think the uncertainty of COVID lead a lot more people to shift into dollars from their local currency, like what happened in 2008.
Probably the best stock market video I’ve ever seen 👏
So the key point at the end is modelling a real return of 3.81% annual average. Is that for S&P500 or a global Index Fund. It just seems to be another reason to consider holding a globally diversified index fund. I have seen values of 5.5% and 6.4% representing annual average real returns so as low as 3.81% will hamper retirement hopes of the DC pot generation
3.8% is much lower than historical averages. Not sure why he thinks that pessimistic, if somebody truly would believe that they would have to invest drastically less in equities, but that would be a mistake
I have seen lots of different values quoted between 5% and 7% annual average real return which are often ambiguous on whether S&P500 or a FTSE/MSCI global Index, whether they assume folk invest consistently, don't tinker and reinvest dividends etc.
Incredibly articulate video. Great job James 🙂
Another great and well researched video James! And I’m assuming a new camera - video looks crisp!
Excellent job explaining how the pricing of companies work. And that's the biggest point to take home. It should be "price" of the ownership for a company rather than "value. " people can buy up or choose not to sell and the price will go up. The return on their investment is still limited to what the company can churn for profits. And sometimes, pricing gets out of control because humans become unreasonable when they see prices going up. It works just the same when they see prices coming down.
I like to think about the consequences of more people choosing to invest instead of spending their money. This could also be a price driver. People putting more money into a 401k will drive up those prices and make it more expensive to make these investments. You'd think that's just fine, just consider higher PE ratios as they rise but eventually, even super long-term investments like a 401k are going to come out. What if the largest generation is now retiring and starts withdrawing while we're having less and less kids these days? Seems to me that prices might wind up coming down at some point and it'll just be the norm for us to have taken that hit from buying when it was high and then seeing very slow returns or even losses for a decade. Be careful out there. It's not just high prices these days. We have a lot of factors at play to what's been so predictable during times when populations were growing.
Truth is that the market is really panicking at this moment and I'm worried what effect this frenzy could have on my portfolio of about 80k. Could you make any recommendations on how I could preserve my portfolio during this period and also make profit from the market situation?
It's a good idea to seek advice at the moment, unless you're an expert yourself. As someone who runs a service business and sells products on eBay, I can tell you that the economy is struggling and many people are struggling financially.
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
How can I reach this advisers of yours? because I'm seeking for a more effective investment approach on my savings?
My CFA Carol Vivian Constable, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thank you for the recommendation. I'll send her an email, and I hope I'm able to reach her.
Globally $7.3 TRILLION was given to citizens as stimulus payments (although not one coin to me bloody hell) and 85% of it was saved not spent - this is why the stock markets have boomed. My pension went up 17% last year, after 3% and 2% the years before and with 10% inflation, so still only a long term average of a few % over inflation....
No. Vast majority was spent on living expenses and went ultimately to company owners
Average Inflation over the past two decades was 2.5% in the US and Europe.
If would say much/most of the stimulus money is spend. Year to year stock market gains are meaning less and not driven by single stimulus.
If there are problems in the US, the whole World will be affected. The US is the biggest, most attractive, and most reliable market to invest in, and it will remain so in the foreseeable future. Therefore, diversifying into Emerging Markets or Europe does not make sense as their performance is likely to be even worse than the US in case of a crisis.
It’s a collapsing what you on?
There have been many periods when emerging markets - and even European stock markets - have outperformed the U. S. market. I see no reason why it could not happen again.
@@henrikorvola1004 US is like the British empire . Do some research. Look at gdp Growth. What you smoking lol
@@johnstewart1814 One peculiar finding finding is that GDP growth has historically correlated rather poorly with stock market performance. There are many reasons to this, but one cause is that many companies are highly international and derive only a small share of their income from the market where they are listed.
When the US sneezes, the world catches a cold
Money moves around, one man’s loss is another man’s profit. When inflation is running high cash can earn more than stocks at less risk so money moves into bonds. When inflation falls and interest rates reduce money starts to flow out of bonds and back into the stock market. When things are looking dicey (wars, oil strife, etc) then money flows into gold and other metals. Follow the money.
The bit that James missed but has shown in the past is the timeline across 100 years. Buying and holding even when things are overpriced still reaps the best rewards over 10+ years. 10 years from now the world will be a different place and the Magnificent 7 will most probably be a different cast.
Very true.
Only if you're younger and DCA'ing in all the time. If you already have a large portfolio and expect only 10 years to retirement, waiting 10 years for a -40% drop to recover is no bueno
Can’t get enough of your videos! A thorough look into Step Finance would be super engaging and informative.
I think one very important aspect of the markets not mentioned is that prices have been pushed up by all the quantitative easing by central banks, which also causes inflation
@petiger6646 yes agree, why dosnt james discuss this?
@@dawnmartyne Hi Dawn, Maybe he isn't that knowledgeable. I think his video was excellent, apart from ignoring the huge amount of printing of money that's gone on for many years. Real wages haven't moved for about 25 years because of it. What do you do for a living? Peter
@@petiger6646hairdresser
QE doesn't cause inflation, although the helicopter money during COVID did, but the two are quite different things. See the "Money & Macro" video on QE.
@@uncreativename9936 Thank you for mentioning the Money & Macro video on QE. I will watch some of their other videos
It's not just investment in the company or payout via dividends that can be done with company profits. You can also buy your own stock.
I hope so ...but ready for any changes in direction. Thanks for your great adviceJames,it helped my dad a lot after mum passed away last year. Regularly watching from Sweden ..cheers Dave
One big factor with the S&P 500 is the exchange rate as this can vary a lot over time
Excellent video, think I need to reflect on this.
I think as always the answer is to make sure your diversified, bird in the hand and all that.
At 10:30 the balloon and the mountain, funny enough, a balloon will burst at high altitude. Could have gotten more out of that metaphor.
The pressure inside the balloon from the air it contains, becomes greater than the outside pressure, the balloon expands because the air inside pushes outward more than the reduced atmospheric pressure pushes inward. As so the higher altitudes, the higher atmospheric pressure decreases significantly, if the balloon expands beyond its elastic limit, it can burst. And if so it inflates and lets some air out because of the pressure, the balloon loses its elasticity and stiffness. Stocks will burst and will lose its value (stiffness).
Thank you for mentioning Sarah Jennine Davis in one of your video! I decided to check her out, and it's been a game-changer. Over 8 months, I've managed to save $400k, clear my debts, and my portfolio's now over $200k. Anyone else had success with her strategies?
Wow, that's impressive!
How are you able to make that much is less than a year of trading
@@Neibrandt Honestly, I simply reached out to Sarah Jennine Davis a pro trader and FA and began my journey.
I've been working with her for 2weeks now, and I've seen a 70% increase in my investments. Her approach is really solid.
Could you share some key factors you look at? Also, any advice for someone just starting out in investing would be greatly appreciated
which emerging markets etf would you recommend investing in to diversify my investments
Really good clear video - I have been reducing equity proportions recently maybe left some money on the table for someone but risk is on the downside
Some of the best content on RUclips. Fantastic overview, thank you
Glad you enjoyed it!
"New paradigm." The most expensive financial services phrase along with "It's different this time."
Hi James - thanks for all your great videos this year, I have learnt so much. Would you be able to advise on salary sacrifice schemes and the risks/benefits? Can we save a lot of NI contributions under this arrangement?
The rich are money-minded; that's a lesson I've grasped from the very beginning. My desire to build wealth has always been strong. I’ve been saving up some money since 2020, and I’m eager to invest it in the stock market to grow my financial future. is now the right moment to buy or not?
I think the safest strategy is to diversify investments. But if you need proper advice, consider speaking with a financial expertise. Don't get me wrong, you can do it on your own, but financial advisors have a lot more knowledge and expertise in this area.
I agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000
That's impressive! I could really use the expertise of this manager for my dwindling portfolio. Who’s the professional guiding you?
Judith B. Richards, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for the suggestion! I really needed it. I looked her up on Google and explored her website; she has an impressive background in investments. I've sent her an email, and I hope to hear back from her soon.
Is it a valid point that so much money enters stocks every month via compulsory employee contributions, into etfs, and that is only going to increase, that is fueling higher multiples in valuations for longer than before because theres always buyers , just a thought
Kinda funny how the stock drop of no reason. My guess is Institutional investors secured gains and try to buy lower
Knowledgeable Investors know where and how to put money during a crisis in order to reduce risk and maximize returns. See a market strategist with experience if you are unable to manage these market conditions.
It seems like there's potential, but caution is warranted. hence I will advice you get yourself a financial advisor that can provide you with entry and exit points
Right, I delegate my day-to-day investing to an advisor ever since suffering a major steep-down late 2019, amid rona-outbreak, and as of today, I'm semi-retired with barely 25% short of my $1m retirement goal after subsequent investments.
It is sustainable. This advice is typical after a big run. The future has no relation to the past...it is writing 'new history', which might be similar to the past, but is really new history. I recommend to James that he take a major short, if he is so confident. I remember in the 1990's, 5 years of S&P 500 > 20% - many folks came screeming, down, down, down just like James is. I am staying in, 100%. Most folks miss on economic productivity, which has returned to the USA economy.
Great video, the only thing for is that people seem to forget the S&P 500 average return of around 10% includes time periods of underperformance like we may see, yet it still has outperformed the global approach over the long term so given I’m very young with such a long time horizon I don’t mind being so heavy on the s&p 500 but I definitely see the pros and cons to both sides
Yes I agree and also we have to mindful that a lot of the S&P 500 companies may change and the fact that a low cost ETF tracks it all and does it for you whilst you sleep with next to no charges has to be good! Majority of these businesses are also globally diversified as well in their own right so I see no need to exit the S&P 500
I strongly agree, this video is only relevant to the older or traders really, us young long term investors aren't affected by a couple slower years
This is such high quality content, thank you ❤
Stock market is correlated to corporate profits (listed companies) and expectations on those, not the global economy -
Corporate profits are correlated with GDP… Companies cant make more money than what actually exist…
Did you even watch the video?
An excellent one James. Thank you ❤
To obtain financial freedom, one must either be a business owner, an investor or both, generating passive income particularly on a weekly or m8onthly basis. That’s the key to living financially stable...
I want to compliment you, you have said it all. I am a little business owner and I really want to expand my business to the next level by making myself an investor but I really don't know how to go about it..
imagine investing in Btcoin earlier.... You could have been a multi millionaire precently
You are right. Been thinking of going into gold and cyptocurrency
Assets that can make you rich
*FX
*Btcoin
*Stocks
*Gold
*Real estate
You’re right but a lot of people remain poor due to ignorance
I love your content James, it’s so well thought out and considered. Any chance you are considering doing something on bonds? Loads of the standing advice is around things like the 120 rule but I can’t find any content that models why you need to do this or really sets out the advantages at all. It just seems to be tons of content on stocks and “oh by the way, ramp up your portfolio into bonds because that’s just what you do”. I feel like there is a man that can help explain this better… Feels like it could be a companion piece to this given I understand they move in somewhat opposite directions (allegedly)
My target retirement fund in my 401(k) had poor returns compared to the S&P 500. I switched everything to the S&P 500, but I regret not doing it earlier. What are the best options for investing $200k for reliable cash flow?
The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again
impressive gains! how can I get your advisor please, if you dont mind me asking? I could really use a help as of now
Credits goes to "Mary Elizabeth Fugelsang" one of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.
I searched for her full name online, found her page, and sent an email to schedule a meeting. Hopefully, she responds soon. Thank you
Great advice as always. I went heavily into US technology stocks about 6 years ago when I transferred my pension into a SIPS account. It has worked wonders for me, currently producing a 5 years annualised return of 15.05% (weighted across the various funds). Your base line return figure is very sobering and will temper my expenditure / drawdown going forward.
I feel investors should focus on under-the-radar stocks, considering the current rise of the stock market since trump was pronounced winner of the united state election. 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Svetlana Sarkisian Chowdhury has always been on the top of my list..She is regarded as a genius in her area and well knowledgeable about financial markets. I highly recommend you look her up if you want excellent collaboration..
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Honestly very nicely explained, kudos James.
Don’t forget currency risk if investing outside UK. If value of your S&P stocks falls in dollars, your investments fall too.
And the converse is true. Tbh, S&P has done so well, a little currency risk is well worth it.
Even if you just went for a global index majority of it is US companies and then even the developed countries non US make majority of their money in the US anyway so you can't really avoid said currency risk.
Nearly 80% of the FTSE 100 revenue (the top 100 UK companies) for example in UK comes from non UK geographic markets thus exposed to multitudes of currencies even if you thought you were buying UK index in GBP.
You really can't miss it unless you purely go small/medium cap UK only and even then there's still international exposure.
@ fair point, but if you buy FTSE companies, you're buying in GBP. Also if you want to diversify your portfolio e.g. with bonds, gold, cash, you won't get the full benefits of diversifying unless it's all in your own jurisdiction. Also inflation, interest rates in UK for example, may behave very differently to US, Australia, Japan etc.
@scotdoc just because you're buying the share in GBP, it's performance is massively exposed to other currencies and their relative value at the time considering nearly 80% of the revenues are non UK denominated. Has a similar impact but you just don't see it easily.
@@BaileyMxX yes I agree. That's part of the reason my stocks are in the FTSE 350. Take a look at Max King's comments in MoneyWeek this week. He presents a case for why the FTSE will perform very well going forward. We'll see. US outlook is 3% according to Goldman Sachs. US market is massively over-valued.
I have a question for the thread generally. I have a relatively small DB pension from a job I did 30 years ago. It makes up about 5-10% of my pension assets and having done the maths I would like take the current transfer value and switch to my SIPP. I am pretty good at maths and the sums aren’t that complicated but I know I legally have to take financial advice that I don’t want/need to get my answer (plus paying for the advice makes the transfer less advantageous) and they may recommend I don’t transfer.
Value is over £30k and am aware of threshold. Anyone have any suggestions?
Keep the small DB private pension as it will be index linked guaranteed income in retirement to add to the state pension.
It isn't worth transferring the DB pension to a SIPP unless the cash equivalent transfer value is many times more than the present day value of the DB pension, as a minimum this would be 20x to transfer and ideally many times more. Also relatively high FA fees will eat into the CETV.
Ok, but... where else will people park their money? Housing is overpriced. Farmland is overpriced. Bonds have crappy returns. Do we just suck it up, cash out, prepare for a brutal correction, and then bargain hunt? When? Timing the market is a fool's errand.
wdym bonds are overpriced. They're looking great right now after the recent correction. Direct property too, but you gotta have a 10 year hodl mindset for them.
Hi, can someone help answer a question for me? If I have a large SIPP and have retired and have no income except perhaps a state pension ( UK) and wish to drawdown an arbitrary amount of £500k what would be the income tax rate on this please? Assume I have taken all tax free money from pension up to the limit at this point. If my understanding is correct it is based on your marginal rate of tax but not 100% clear if that goes up if you drawdown a large amount even if regular income is negligible. What would be the % income tax rate on this drawdown in above scenario please?
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Grace Miller.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm celebrating a $30k stock portfolio today. started this journey with 6k. I have invested on time and also with the right terms now I have time for my family and the life ahead of me
The very first time we tried, we invested $1400 and after a week, we received $5230. That really helped us a lot to pay up our bills.
I'm new at this, please how can I reach her?
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
Have to thank you James for all of your videos over the years. Nobody else has helped me to have a more informed opinion of what I need to be doing in planning for retirement
And no I am not a bot 🤣
No matter what, just keep buying. Long term you will be ok…..
Depends how long "long term" is. There have been several times in history when you failed to break even with US stocks (in real terms), even after 20 years of waiting.
@@chrisf1600 I now only invest in VUAG and VWRP. With a long term view you would be very unlucky not to make money…..the last 12 months have been ridiculous for making money.
@@chrisf1600which period?
@@MrQuay03 1922, 1949 and 1983 all had practically zero real returns over the trailing 20 year period, even after reinvesting all dividends. If you're interested in seeing the results for other holding periods, search "The Latest Look At The Total Return Roller Coaster" (surprisingly, even 30 years isn't "safe" if you're unlucky enough to be born at the wrong time)
Show me “several” rolling 20 year periods where failed to break even ? What on earth are you talking about
Hasn’t it been like this for years though? Do you think the fact that every day people get to invest now has any impact on the the market and the way we value companies? Should we value companies the same now that There is more access to the stock market?
To be kinda blunt, I am giving up on investing in stocks... I put between 2000 to 3000 a month and it's nothing but down down.... SOOO frustrating and I only invest in boring big companies. How can I capitalize in such a market?
There are great opportunities to invest right now. Embracing pullbacks and corrections is how wealth is built!
I rely on a fiduciary to manage my investments since emotions can lead to bad decisions. Melanie Kristine Skelton, my CFA, created a strategy for my long-term goals, and my portfolio has grown to over $850k.
I could really use the expertise of this advisor, What's the best way to contact her?
Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you for the lead. I searched her site up and filled the form. I hope she gets back to me soon.
Very good point about the difference in valuation for large versus mid caps. The S&P 500 is market cap weighted, so it's very biased to those large cap companies, but there's ETFs like RSP that's the S&P 500, but every company is equally weighted so mid cap companies are far better represented than in the regular S&P 500. And of course there's ETFs dedicated to just mid cap companies.
I have been trying to grow my savings and i wonder which is better the stock market or crypto, i keep seeing a lot of good news about the stock market but i am not familiar with the strategy. Any recommendation will be highly appreciated
The stock market is likely the best smart investment. However, if you are thinking of investing in the stock market and you are not well versed, its advisable to work with a financial advisor who is an expert to guide you through the process. this way you could make more profit with less risk
Right.. based on my experience with an investment advisor, I have $385k in a diversified portfolio that's grown significantly. It's crucial to be knowledgeable and persistent in stocks, especially during market fluctuations. I believe the stock market is the best investment, and while I have some crypto, I've made much more profit from stocks.
Talking about a financial market specialist, do you consider anyone worthy of recommendations? I have some money to test the waters now that large cap stocks are at a discount... Thanks
Judith Lynn Staufer a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for the suggestion! I really needed it. I looked her up on Google and explored her website; she has an impressive background in investments. I've sent her an email, and I hope to hear back from her soon!
Great explanation James! For myself I only invest in the S&P 500, because in bull markets concentration increases. The US makes up 90% of the MSCI world top 100 index. If there was a retail MSCI 100 fund I'd invest in that. Unfortunately there isn't, and direct indexing 100 constituents is a faff. So GSPC it is!
The balloon graphic is pretty wild because the deviation of the balloon was on the x-axis, which represents time. Goddamn time traveling balloons
Yer, I thought about just having the ballon move up and down, but this helps to visualise the market "getting ahead of itself".
Great stuff. It's amazing how few people understand what generates stock returns over the long run. Most seem to think that it's purely earnings growth, which probably explains why so many investors seem to want to yolo into high-growth tech stocks. The idea that you can make a healthy return from a company that isn't even growing is mind-blowing to some :) This is the clearest explanation I think I've ever seen, great job.
FTSE global all cap baby, job done.
I have invested in FTSE global all cap etf for 15 years, and my investment is currently worth just over £650K. I was looking at changing how I invest recently and discovered had I been putting the money into an S&P 500 index etf my portfolio would now be worth just under £1.1M, yes, over £450K more
@Thaitanium73 hahaha yeah chalk that up to the tech giants. Could have just as easily been a big flop though right, we can't know these things.
I still can't believe how much AI hype has skyrocketed Nvidia... and I can't even count the amount of times I've said Bitcoins overvalued and not worth investing in 🤣
You've made me want to swap my investments over to S&P tho.....
@@Thaitanium73Hindsight can be a dangerous thing.
I bought 100 Carnival shares a couple of years ago - not just as an investment but also to get on-board credit when we sail on their ships.
Shares are now around 260% of what I paid. Should I have bought more ??
TBH that sounds like gambling more than investing. My aim is to beat inflation, not getting rich overnight.
Without a DeLorean and 1.21 Gigawatts I think I'm okay with the outcome
Yeah you can't have known.
James. What about if im in camp 1 ..... i believe that markets are often irrational and that they get prices wrong ...... but that i also believe they will continue to do that for many years, which will keep prices irrationally high, for the long term 😅.
This not financial advice, but I share your conundrum. I chose to grow a beard, which I can stroke while I'm staring out the window and pondering the future. When a bird lands on the clothesline, I stop pondering and I say to myself; "bird". If a bird fails to land on the clothesline, I keep stroking my beard and pondering, uninterrupted.
The same Goldman that predicted s&p500 to hit 4700 by end of 2024 which they revised to 5100. Now as I type sits at 6048. These comedians couldn’t find their @rse with both hands
Totally agree 😂😂😂
Hi James - when you say “Globally Diversified Portfolio”; obviously this means diversification by country, but does (or should) it also mean diversification between small and large cap indexes?
Yes, it should. I think I say that at the end.
I started investing last week.
Good for you!
I assume you’ll be investing each month for many years to come.
Some of those times the market will be high and some will be low - there’s no way to tell for certain which is which in advance - and they’ll balanced themselves out over time. So that, over the long term, no matter when you start investing, the stock market is likely to be a great tool for building wealth.
@@JamesShackThanks. It is a bit concerning but I will put in maybe £200 a month anyway instead of a lump sum. This is a clear warning sign and it would be foolish to ignore it.
@@Anteater23 thanks for letting us know. I'm selling it all 🤣
@@pingupenguin2474 I think a good idea is to invest regularly and in the case the market nosedived then actually increase your investments to lower your avg. price
This is an awesome explainer. If you look at stock growth as the 3 headed monster of GDP growth, inflation and returns, I think there are structural changes in society- mainly the end of the demographic dividend across much of the planet- that atrophies all 3 to varying extents, which I imagine will suppress interest rates and put a premium on yield. A lot of the machinations of the markets over the last century can be explained by these 3 factors and I think can be used to project somewhat into the future. A lot of smart folks project their predictions on these factors through interest rates, which even at recent "highs" are much lower than historical norms.
It's the money supply not GDP 🤯
Exactly! This is so important and rarely talked about
Maby we also have to take inequality into account, wich is growing, that means we have more people that can’t really do anything else then putting it into assets. So maby we will have a other ratio of earnings to value in the future. Still I think that ratio could be lower than it is now.
If people think the S&P is overvalued just look at Crypto Currency.
The S&P is actual companies
Crypto Currency is just gambling
Looks like somebody missed the train?
Oh dear. A few years ago, comments like this were just ignorance. Now it's stupidity.
@@random.mandembecause crypto currencies suddenly have a tangible value 😂. Huge risk but big reward unless you are the person holding the somewhat worthless parcel when the music stops.
@@cryptobond8650 the Emperors New clothes come to mind.
Also the way the inflation rate is calculated doesn't reflect the true inflation which is solely caused by quantitative easing. Supply and demand mean nothing as the market always dictates prices on a long term timescale.
And then there's the geopolitics.
You said you model on 3.81% real returns for a global 100% stock portfolio. Can you share what you use for a 60/40 please?
Amazing video, such a comprehensive and balanced view that answered my questions
Best analysis of valuations I’ve seen.❤❤
Well explained technically. Tackled the issue from multiple fronts with very good reasoning. Thanks
Thanks!
Great video and explanation. You’ve earned yourself one sub.
Great vid as ever, James. But I didn’t understand your final comment.
Like you I am in camp 2 and know I can’t out wit the markets. I have a single Global Index all equity fund which suits my risk appetite - which as near as dam it is an S&P index fund.
Why do I have some thinking to do?
Many thanks
Pallab
The content of this video is really valuable! Explaining the relationship between the stock market and the economy in such a clear way helps us gain the right perspective when investing. The examples and analysis provided were very informative. I'd definitely love to see more content like this!
This is a brilliant, informative video. Thanks!
all this is great IF market prices actually did strictly follow these concepts. but honestly they are all just that, concepts.. market pricing is determined by a willing buyer and willing seller. that’s all it is.