The 2020 Recession | My Investing Concerns

What are the boys? I'm Graham, so I just want to have a really open, honest and sincere discussion about what's been going on with the markets lately. The stimulus package is implemented. What that means to you and me. Thoughts about what is likely to happen at all. Don't worry about this, I have never been nor will I be one of those channels that try to induce panic and make you think that the whole world is falling apart even though I haven't really left the house for a few days. and today is the first day I wear real pants;

However, I want to take a really sensible, logical and realistic approach to what this means for all of us and discuss some of the strategies we could use to get out of all of this. unscathed because after reading almost all the comments on my previous video it was quite refreshing to see how many people appreciated having a level-headed perspective on things and believe me, it's not always easy to do. Be completely honest with yourself. I'm the kind of person who worries too much for no reason. I easily get caught up in all these alarmist headlines about the end of the world as we know it.

I've been glued to my computer refreshing the screen every five minutes. to make sure I don't miss anything and I've wasted a lot of mental energy on absolutely nothing of importance and I think if you and I are the same, I'm not the only one who does this, trust me, I review every single one of the worst ones. Possible case scenario in my mind about what happens if all my tenants stop paying rent. What if I can't sell any homes as a real estate agent? What happens if my entire YouTube channel gets overly monetized and people don't destroy similar things? button to the era of the algorithm what's going to happen, but then you take a step back from all these sensational headlines only to realize that we are going to get through this totally fine and the only way to do it is not to panic and as proof of that , this is what we are going to do first.

I'm going to quickly recap what's been happening lately, then we'll look back at the history of all the bear markets just to see how bad things have really gotten, how long it's taking. taken to recover, then I will share my own thoughts and

concerns

about what is happening in the market and finally I will end the blatant self-promotion of bowling for anyone who wants to release shares when they deposit. $100 on the platform with one of those stocks valued at $1400 at the link below in the description which is basically my video in a nutshell so with that being said let's start the video my new studio said I've been working on lately since I'm not the leader of the house, so at least this is what's been keeping me busy lately, so it's over here.

I'm going to go for a walk and enjoy the video. Alright guys, welcome to my new studio. Let me know what you think. it's down in the comments, but anyway let's do a little history lesson here or at least like a history lesson of the last few weeks because actually up to that point the economy was going perfectly fine, let's not forget a month. On February 19th, the S&P 500 hit an all-time closing high of thirty-three hundred and eighty-six dollars, unemployment was near all-time lows, interest rates were low, and, plus a bright little glimpse of this mysterious disease that was developing in China, everything seemed completely fine. until it started to spread, I mentioned this term before, but something like this is known as the Black Swan event because no one could have predicted it.

I mean, I'm sure Bill Gates warned us about a potential situation like this a few years ago in a TED talk, but no one could have predicted that

2020

would have been the year it happened and if it weren't for what's coming, a lot People would say that the economy would continue to move forward quite calmly and profitably anyway as their disease began to spread. It became clear that it not only posed a huge threat to our entire global economy, but also to the health and safety of ourselves and those around us, and that's when the poop hit the fan.

The second-largest economy essentially shut down. Investors worried about how this would affect. people in their businesses started expecting lower profits and then the stock market started doing its thing by lowering the price and then lowering the price and lowering the price even more and at the same time making people on Wall Street bet on Reddit got very, very rich, but that's just the tip of the iceberg when illnesses started to be announced here in the United States, the Federal Reserve, out of nowhere, suddenly lowered interest rates by half a point. Normally, a move like this would excite the stock market, excite investors because all of a sudden they could borrow money. at much cheaper rates, but not this time.

Instead, people panicked because they thought that if the Federal Reserve sees the need to suddenly lower interest rates out of nowhere, how bad the situation is and what do they know that we don't know, with that the markets still fell further. and subsequently, more and more, making people on Reddit Wall Street betting richer and richer, here's the thing, from an investment point of view, this disease brought to the surface a lot of things of that our economy was simply not prepared for our healthcare system is not designed for such a large influx of people at exactly the same time, so measures have been put in place to try to do everything we can to limit the number of people who contract this and , while that happens, people don't leave the house, they don't spend money, companies don't make money, they lay people off they reduce the hours that people don't make money and the ripple effect of this becomes unprecedented, so In an effort to alleviate those

concerns

, Congress passed several stimulus packages to restore funds to the economy, including a proposal to give every American received a check worth $1,000 or more, depending on their family size and income. , then after travel restrictions were implemented and airline stocks fell faster than I think, according to the video of their aides, the Federal Reserve lowered interest rates again at a rate that had not been seen for the last time. since the Great Recession of 2008 and even with all that, the stock market is still customer now, obviously I'm leaving a lot out of this just as a way to simplify the situation as much as possible, but the bottom line is that the impact of businesses are closing and people losing their jobs and not spending money could have a very lasting impact on our economy not to mention that we are not exactly sure how long this is going to last and the uncertainty is leading us to check stock prices. stock every few minutes and to make sure Robin Hood is still running and I just checked to see if Robin Hood is still running so with that one month mini history lesson over and with the stock down about 30 percent from its peak , let's move on. and take a look at other bear markets and crashes just to see how this compares and of course to do that we're going to go all the way back to 1929 the wonderful year of 1907 this is a time when the stock market fell 50% in value after the San Francisco earthquake of 1906, where heavy insurance payouts led to gold being withdrawn from banks and lending requirements suddenly became much stricter, causing people to panic about liquidity within from banks and companies were rumored to have speculated about when to trust.

A failed copper businessman panicked and started withdrawing his money to the banks and the rapid numbers of that situation led to the monetary policies that we know today as what is called the Federal Reserve after that, however, the market saw a wonderful price surgeon once again like people. regain their confidence in the economy, which saw a 193 percent rise in prices in less than four years, but this was until the Great Depression of 1929 and this is what happened after the roaring 1920s, money practically was spilling out of every corner and for lack of a better word, people were over-leveraging their money and borrowing too much to re-invest in the stock market, to the point that the Federal Reserve was warning people like, hey, this is probably not sustainable, the guy is not a good idea, make this problem with this was that the banks were lending money to people so loosely that virtually anyone could borrow money in order to invest in the markets because the markets and stocks only rose a lot although the exact catalyst for the crisis is unknown.

Some theories suggest that an increase in interest rates weakened people's confidence in the market and began to prompt people to sell, others say that it was due to overproduction in agriculture that caused those companies to sell that product at a lost price, which hurt profits throughout the year. Many other economists were suggesting and theorizing that there weren't enough people pushing the button on these algorithms anyway, once the stock market showed even the slightest glimmer of vulnerability, people started selling at rapid levels and started withdrawing. their money from the banks for fear that the banks would close, however, the banks were a bit paralyzed because they had invested and lent all their money and could not give people their own money back, which led to the values ​​fell 83% in two points.

Two eight years with an unemployment rate of almost twenty-five percent among Americans and even as the stock market slowly began to recover from its free fall, many people were still unemployed and the economy was basically picking itself up again to eventually rebuild when the War World Two blows: Many economists argued that this was what helped us get out of the Great Depression because it ended up providing jobs for the nearly 17 million people who were unemployed during that time. Either way, after that, the economy enjoyed about fourteen years of steady economic growth on average. a profit of more than eight hundred and fifteen percent during that period;

However, when the war ended we saw another decline in the markets of around 22 percent in six months as veterans re-entered the workforce and began competing for a limited supply of jobs and the entire economy had weakened. reset without the government spending money on a war, but after that we saw a fifteen year rise in the stock market with prices rising over nine hundred and thirty five percent during that time, but then the 1970s saw times still most turbulent between January 1973 and In December 1974, the stock market lost about 40% of its value. This occurred when President Nixon took us off the gold standard which tied the value of our dollar to the value of gold.

However, this caused runaway inflation because when they started printing more money, it devalued all the rest of the money that is currently in circulation to counter that strict policies were implemented to increase interest rates and try to keep the value of their dollar low. control, but after that, as usual, like clockwork, people regain their confidence in the economy, the markets continue to rise for the next 13 years with an average gain of eight hundred and forty-five percent during that time, After that we have another one that people keep mentioning lately and that would be the Black Monday crash of 1987 where stocks fell 22% in a single day, the exact cause of this is unclear but since there are no policies to To prevent this from happening in the first place, a combination of factors occurred that caused a once in a lifetime sequence of events that caused the biggest stock market crash in history and not long after the markets recovered and continued to rise over 800 percent over the next 13 years, then we had the dotcom speculation of 2001, which was caused by a frenzy of speculation towards Internet-related companies are a bit similar to what we saw in cryptocurrencies in December 2017, people They were really buying everything they could because this is the Internet and this is the future, well that was unsustainable since many communications companies actually couldn't.

To make money, they collapsed, but even despite all that, things recovered and we saw about five years of almost 110 percent growth, until the great

recession

of 2009. I'm sure this doesn't need much explanation at the moment. but basically the banks lent too much money to people who were not qualified, who then went on to buy houses, and then once they couldn't sustain those payments, they started defaulting, meaning they went back to the banks and caused the housing market to crash.values ​​fell. About 50% in value, the Fed stepped in to bail them out and then we rebounded into the longest, most profitable bull market we've seen in history so far.

At the time I'm filming this, the markets are down about 25%. from its peak and if we look back historically through the data of the last 110 years, we can see that throughout everything we have been through we will eventually recover and everything will be fine, not to mention whether we include the Great Depression of 1929 or The average bear market has experienced a 41 percent loss over an average period of 1.4 years and when it comes down to it, there is a saying that every bull market is the same, every bear market is different and this is especially true. nowadays.

We are experiencing a global event that is largely unprecedented compared to anything we have seen before and we have no idea how much worse or how much better things are going to be in the short term. We are realizing that many companies are paying salaries. salary and cannot afford to close its doors for more than a few months without going out of business, which will eventually lead to a domino effect throughout our country as businesses close, people lose their jobs, stop make money to downsize. in their spending and can no longer make payments even with this surplus financial stimulus package expected to go into effect, we have no idea if it will be too little too late.and also how many people will be affected by this, both from the financial and health point of view, in terms of what I think can happen with all this.

While we have some potential scenarios, one is that we are able to slow the spread of people's confidence slowly recovers a vaccine is offered consumer spending begins to slowly increase and, aside from a few quarters of lost growth, the things eventually recover and continue as normal or this will last much longer than people think, our healthcare system is temporarily overwhelmed and overcrowded and public confidence people in the market dwindle to the point where that becomes a domino effect of continued low prices and really, even with these two scenarios, no one really knows what's going to happen. and many people may argue that if it weren't for this disease, the entire economy would continue as usual, so once we can remove this variable from the market, things should, in theory, recover once our confidence in the market, this affects everything around the world. the council is completely separate from our economic stability and the longer it takes to bring it under control, the worse it will be for everyone.

My personal belief is that although we don't know how long this is going to last, I have a feeling that as soon as we saw it go down, we will see it come back to life, maybe not to the highs and to the extent that we saw a month ago, but higher than where we are now, although I think the longer it takes to happen, the longer it will last. to lead us to recover from the losses we have seen and heard, the goal of this video is not to scare anyone, it is not to tell you the usual cut back on spending, save money, invest consistently and stay the course, but to be honest with you and say, hey, you know what it's normal to be worried it's normal to be worried it's normal to feel like they're panicking and we can't ignore these emotions after all, as a real estate investor I'm worried about my tenants, not paying rent and having to cover the cost of my mortgage, property taxes and insurance, that's a lot of money each month out of my pocket without taking any rent and coming back to help and even though I'm fully prepared for it and have everything in place to handle it in case arise.

I know many people who are not prepared for that and are actually just a few months away from defaulting on their loans at that point. I have a feeling that it is up to the government to then intervene and suspend payments long enough for this to pass, if not I worry that the domino effect could be much larger than we imagine. We can really be sure that all of this is only temporary and that eventually our markets will recover. and judging from what I saw personally during 2008 and 2009, when people are on the verge of believing that everything is over, that our entire economy is doomed to exist and people have lost all faith in the financial system, that is usually the point where we have arrived. or bottom, after all, panic and fear must be at all-time highs for us to see our lows in the stock market and although we don't know exactly when that will be, it is very important to understand that that is just an investment process.

In the long run, after all, looking back, what if I told you that you had the opportunity to invest in 1929 after everything had lost 80% of its value? We imagined having the opportunity to go and invest in 1974 after everything lost 40% in price or What about

investing

in Amazon during the dotcom bubble, when people thought that technology stocks were finished? What about being able to buy real estate in 2009, when many people believed real estate would never be the same? a unique buying opportunity that would have made patient and willing investors a lot of money in the long term.

All I'm saying is that in each of these market declines you could argue that this time is different and in fact each time is different, there are no two bears. The markets will always go back to the same and I believe that once we run out of unknowns about what will happen to our economy, eventually that will be the point at which stocks will start to rise again. I have no idea how long it will take, but I do think that we will be able to consider this as a very good buying opportunity in hindsight, many years from now, when we are all safe and sound, we are not cooped up in our houses all day, that doesn't mean To say that the price could go down even further and very well, it could be, but for anyone who has ever commented or wished they could have invested during the Great Recession of 2009, this is your chance.

I don't want to say this to disappoint anyone or give anyone a false sense of security, but objectively if you look back at every stock market crash in history, things have gotten better and things have recovered. I have no doubt that eventually that will happen here, as does my own thinking on this. I'll be honest, it's scary to read a lot. In the headlines, it's easy to wonder how bad things are going to get and then go into a state of panic, especially if you stay home, stay indoors all day, and spend all your time thinking about the worst possible things. scenario, no wonder people are going crazy and panicking.

I've already spent a few days inside and I'm going crazy without much to do. I'll tell you directly if you have too much free time. It will bring out the best in you, so I recommend that you take a step back and realize that in the long run everything will be fine, everything will recover. Make sure you put your health and safety first and then carry on as usual. Of course, I wonder what the ripple effect this will have on our economy if this persists for more than a few months. If that happens, I feel like consumer spending is almost going to change as people have PTSD from not working and not having enough money to pay the bills and I think it will take a while for people to feel comfortable spending again, but for anyone who is less than a few years away from retirement, especially if they are young from an investment standpoint, it is still a great option.

It's time to continue shopping and just dollar cost average as usual throughout this entire experience and on a totally unrelated note, social distancing right now is very important, the longer you can stay home watching YouTube videos and pressing the Like button for the YouTube algorithm, the better. It's going to be for everyone, so what did they say? Thanks so much for looking. I really appreciate it if you haven't subscribed yet to make sure you destroy the subscribe button. Destroy the notification bell. Also feel free to add me on Instagram. Public. it's almost daily so if you want to be a part of it feel free to add me there as on my second channel the Graham Stefan show which I post there every day I won't be posting here so if you want to see a mark .

New video for me every day, make sure you add to it and then as I mentioned at the beginning, as I promised, if you want to get free stock, use the link below in the description and Weeble will give you 2 free. shares when you deposit 100 on the platform and one of the shares can be worth up to $1400, so if you want a chance to get two free shares, use the link below, let me know which two free shares you will get. Thanks so much for looking. And until next time