My Recession Proof Investing Plan For 2020

What's up guys, is this getting exhausting? So if they opened their computer in the last week, now that I think about it, they're actually watching a YouTube video, so obviously they opened their computer or their phone to just stand here listening to me so that automatically filters out everyone else who doesn't. they are open. I have to rethink this introduction anyway, investments have had a crazy and wild ride in a matter of weeks. Robin Hood has given us some really juicy drama that we have experienced. record profits and record losses and this guy seems to appear on the cover of every investment article known to mankind no, I'm actually serious, go look at this and this and this this this this no, I'm not even kidding, I think all the media notices that this guy here has the perfect miniature face and if it works on YouTube, hey, you know what it must work on CNBC too.

Here I will show you. I'll make my thumbnail of the video right here anyway, it's certainly been a very wild

investing

ride so far in

2020

and with the very real possibility that we're slowly getting closer and closer to a bear market and potentially even a

recession

, I felt it would be a good idea to share my investment strategy for

2020

and how I

plan

to invest at a time when it may not be good to invest after all, there is a lot of speculation that the stock market will continue to fall and the real estate market value will collapse and also how 90 percent of my subscribers don't hit the like button of the YouTube algorithm which is very worrying and we need to change that so let's talk about whether or not I'll have to wait to see what happens.

I will be talking about what will happen to my real estate investments if the market falls and my investment

plan

for 2020 which I believe should weather the storm and come out profitable, so what he said, sit back, relax, subscribe if you haven't already subscribed and let's go. start the video ok, first here's the super short explanation of what's happening in the market summarized in about a minute. Since March 2009, we have been in the longest bull market in history for the last one hundred and thirty-two months. The S&P 500 is up a whopping three hundred and forty percent, which if you look back historically makes this not only the longest but also the most profitable;

However, all good things come to an end, although we saw a bit of a dip in December 2018, things quickly recovered because people realized we had money to make and therefore the stock continued rising to new highs and new highs; However, recently there has been a mysterious and easily transmissible disease that developed abroad that I cannot mention here on YouTube. due to the risk of being demonetized and this disease that will not be said on YouTube has been wreaking havoc on our entire economy and potentially leading us down the path of a bear market and perhaps even a

recession

, this is because in an effort to contain Because of the disease, people aren't traveling as much, which means they aren't spending as much money, which means they're spending more time at home without spending money, which means manufacturing slows down, which means companies aren't they do so well, which means companies lose money and potentially. close, which means that stocks don't tend to perform as well and then people lose money and because they are afraid of losing even more money, they take their money out of the markets and put it in cash, which makes the market go down even more.

Also, which panics other people who also do the exact same thing and take their money out of the markets, which causes the markets to go down even more and then it becomes this endless cycle of people not wanting to lose money, which ironically makes people lose. money basically until the disease is contained we don't know the full impact this will have on our economy and because of that generally prices will go down of course that is a very simplified explanation like the m5 version of what is happening currently because In the midst of it all, we also have the Federal Reserve lowering interest rates to record levels, we also have an oil competition between two nations that are playing a real life game of chicken to see who can manage the lowest prices for longer so that it's not just the illness that's bringing us down, but also the illness along with a bunch of other crazy things that really lead to almost like the perfect storm, so anyway, that's where we are now, the stock market at the time I'm recording this is down. about 15 percent from its recent high and that's 15 by the way like 1/5 because every time I say 15 I'm worried that people will think 50 no it's 1/5 and really with everything else that's going on people He is looking for a safe. investment plan to put your money in and this is exactly what I'm doing too, so this is what I'm doing first.

Let's start with something that a lot of people wanted me to talk about and cover and that would be real estate for me. This has easily been my biggest

investing

focus over the last decade. I started by purchasing three properties in 2011 and 2012. I then purchased a single family home in 2016, a duplex in 2017, another duplex in 2018 and then another property recently in 2020 which I purchased. I'll cover that shortly, so between everything, I now have a little over six million dollars in real estate and of course, for the purposes of this video, all of them are rentals except for one of them that I live in, but yeah In general, it is real.

Real estate has really been my biggest focus, a lot of people have come up to me and asked me what's going to happen to the future of real estate prices with this mysterious disease that I can't name here on YouTube and also with the stock market crashing. and To answer a question like that, we have to turn to the almighty graphs and data because the science and the data that I found was really interesting or is basically as interesting as it would be for someone who is very interested in real estate, which is interesting for me anyway.

The red line represents the National House Price Index and the blue line is the Nasdaq Stock Market Index dating back to 1987, as you can see even as the stock market rose and then cried throughout 2001. , the real estate sector was largely unaffected and continued to rise even though we saw a sharp decline during the 2008 mortgage crisis, any short-term decline in the stock market had very little effect on overall home prices; Instead, real estate values ​​are largely driven by the old saying: location, location, location, it's kind of like going out and buying individual stocks, some of them might do incredibly well and then some of them just do poorly. gone wrong.

The same applies to real estate. Real estate prices are heavily influenced by the specific market conditions of supply and demand, proximity to employment in the current supply of inventory on the market, this will vary drastically from place to place, not so much by what is happening with the economy in general, secondly, real estate prices will be heavily influenced by how high or low mortgage interest rates are and right now they are at historic lows, the Fed just lowered average interest rates period and they are expected to lower them even further, making real estate much less expensive and thirdly, in general, people are not going to buy and resell houses multiple times a day.

As with stocks, most people aren't going to have that much turnover in their holdings and they buy them with the intention of holding them long term, so whatever the value is in the interim doesn't really make that much of a difference. . Not only that, but trying to find the value of a property at any given time is quite complex, for that reason we normally don't see as big a price variation as we do with stocks, so from this perspective at least at As of right now the real estate sector has been doing quite well and with interest rates at historic lows housing has continued to rise even higher now obviously a lot of the data on the real estate sector is lagging behind a few months ago, so it's a little unclear what the current situation is.

The illness is going to affect the current values, although I must say that I am not very sure how much it will register. Low interest rates at the moment are likely to keep prices fairly stable and for anyone with cash on the sidelines, now tends to be a good time to buy now, some people could definitely argue that fewer people are abandoning their homes and fewer people are buying real estate, which is probably true, but that also means there will be less inventory on the market as fewer people sell their homes and fewer sellers. sell, which, ironically, low inventory tends to drive up prices on the other hand;

However, if interest rates rise, that will affect property values ​​because it will be more expensive to buy, which means people can't afford as much housing, which means prices could end up going down. I would say this is the biggest risk for real estate values, but right now it seems like the Fed has no intention of raising rates and if anything they want to lower interest rates, so now is a good time. . It's time to set a price that is very low, so I'm really a buy and hold investor. This might work exceptionally well for you for my own investments.

However, I must say that it has been very difficult to find an agreement here in Los Angeles. I have been searching non-stop for the last 7 months and I was finally able to find a property and recently closed on it so details will be coming soon I promise but actually finding something like this was not easy because not only has the price gone up a lot. more than I think they are worth, but the upside cash flow is very limited, it's hard to come by and the things coming on the market just aren't good, which is why I think in 2020 I'll finally take a leap of faith and buy a property off of the state and invest in some single-family homes in Phoenix, Arizona.

Well the research I've done seems to be a really strong growing population, a lot of people are moving there for lower taxes and their money goes a long way compared to Properties in Los Angeles also have pretty good cash flow a a rate of 5 to 8 percent depending on the area, which I'm sure is pretty low for some of you, but for me in Los Angeles, getting 5 to 8 percent is basically like magic. horn, a magic horn, a magic unicorn. I have called it magic horn. I'm going to leave it there, whatever, anyway, it's a magical unicorn deal compared to what I'm used to and that's what I meant, so my plan here. is go buy a single family home in the price range of 350 to about 550 thousand dollars, go and hire a property manager to take care of everything for me, then see how it goes and if everything goes well, I will buy another one and In fact, it's fine if I'm going to buy another one.

I've never bought a property out of state before, so this will certainly be at first and it's really almost out of necessity at this point because I just don't find good deals here in Los Angeles in terms of cash flow or in terms of what I think which is really worth buying because the prices are too high, although overall my real estate plan hasn't really changed much, it's still just buy it, hold it and rent it. and continue as usual for me, this is really the perfect investment to ride out a recession because if interest rates go down, I can refinance my loans at a lower rate and then the cash flow from that property is much more positive than the real .

Property values ​​don't really make a big difference to me, all I care about is how much rent I receive for the property each month and usually, if we get back to super scientific here, you can see that the rent stays the same. . relatively stable regardless of how the real estate market performs in terms of cash flow and I'm pretty optimistic that even if values ​​go down, you shouldn't see any reduction in rent each month, so I feel that a strategy like this works extremely well. During a time of market volatility, let's talk about stocks, and as surprising as it may be to some people, yes, I invest in things other than real estate.

I have a 401k, an IRA, and several taxable accounts through Vanguard Alli Robin Hood wiebel acorns m1 Finance and every other investing app I forgot to mention here, but overall my main focus has been buying into the SP 500 index fund; every year I have recently supplemented it with some VT and Vivat bags, nonsense, but in general, as you know, mystrategy. It's really been just buy and hold. I've also branched out a little into some fun individual stocks from time to time, which is basically another term for saying I have a niche for betting, but I don't want to go to Las Vegas because it's too far away. away so I'll do it on my phone instead so I bought some Tesla stock last year and recently spent ten grand buying American Airlines stock right after I saw their stock price drop an eight percent, but I don't understand.

I'm wrong, this is not a serious investment in any way. I mean, if the price goes up really well and if the price goes down, then you know, so be it; Anyway, I think we do end up seeing a big correction in prices in the future. and prices continue to drop even further. I'll probably increase my contributions a little bit, but otherwise I'm going to stay the course and do exactly the same thing I've always done. I know there has been a lot of talk about buying. gold investing in bonds or trying to short the market, but honestly that seems unnecessarily risky and complicated to a lot of people and I'm sure most people would be better off if the dollar cost averaged the market each week or every month.

If someone doesn't know what dollar cost averaging is, all that is is, instead of investing all of your money at a single moment in time, simply invest a long-term constant amount every week or every month, like that. One way you'll buy all the dips, you'll buy all the gains, and in the long run everything will average out so that Honestly, who knows, the whole stock market is pretty irrational, but all we could do based on the last hundred years of data history, we simply buy from the markets as soon as we can. Hold it for as long as you can and that will prove to be the most profitable and that leaves me with my recession-

proof

investment plan: continue to buy and hold real estate whose price typically won't fluctuate and even if it does.

The data shows that rents have stayed pretty constant regardless of what happens and that's really all I care about. At the end of the day, within 25 to 30 years, all the mortgages will be paid off, I will be owned outright, free and clear, and then all the rent I receive will be pretty much pure profit. Secondly, they will buy in the stock markets as usual. It will be a combination of US international stocks and bonds, and that's it. All of this is meant to be money that I am not. I'll need it for the next 20 to 30 years, so whatever it's worth in the short term, it won't make much of a difference because I don't plan on withdrawing money third.

I always make sure to maintain a large emergency fund. On the other hand, I know it sounds a little crazy, but I have enough cash to last me at least a few years in case prices crash, all my income dries up, and all my properties become empty at exactly the same time, but on the other hand, my overhead expenses are extremely low, so it doesn't take a lot of money saved to end up wasting me for a long time, although I recommend that anyone else have at least three to six months of their expenses saved in cash at all times in a high interest savings account or CD or anything else that's easily accessible if you don't currently have that and that's something you need to work on immediately before anything else and I'm a big believer in backing that up even if the markets go down only invest money that you won't need in the short term only buy rental properties that you can afford where the rental income covers all your expenses plus some and all those properties only get low long term fixed rate interest rates mortgages so that that way there are never any surprises or anything that will disconcert you in the future.

This is one of the reasons why I am a big fan of real estate because even in the current market conditions with the stock market crashing I still receive the same amount of rent month after month so for anyone who wants to know my recession and my investment plan for 2020, there you have it. I'm a little more cautious than before, but I always do my best, it doesn't matter. what to always cut back on my expenses save as much money as I can invest as much money as I can and of course smash the like button on the YouTube algorithm if I or you haven't done it already so with that you said Guys thank you very much for looking.

I really appreciate it as always. If you enjoy videos like this, be sure to smash the subscribe button notification bell. Feel free to add me and Graham on my poster almost daily, so if you want to be a part of this, feel free to add me there, as on my second channel, the Graham Stefan show, I post there every day. I don't post here, so if you want to see a new to me video every day, be sure to add it. Lastly, speaking of shares, if you want to release shares, use the link below in the description.

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