What EVERYONE Needs To Do With Their Money (ASAP)

What's up you guys, it's Graham here. So I had another video that was scheduled to post today, but with the current state of the economy and the rather unprecedented events that we have just seen in the stock market, I felt like it would be more appropriate to address everyone's concerns and share my own thoughts about what's going on. Because the reality is, many people have just seen years worth of savings completely wiped away in a matter of a few days, with the market falling faster and further than at almost any other point in history. That's why we really have to discuss exactly what's going on, what this means for you, and why it's important not just to invest your money, but also protect it. Because right now could be one of the most unique times in history. Although before we start, as usual, if you appreciate me filming in not my studio while I'm out of town to get this video out as fast as possible, it would mean the world to me if you hit the like button or subscribe if you haven't done that already. Yes, I get very tired of asking for it, but it does help the YouTube algorithm tremendously. As a thank you for doing that, I will do my best to read and reply to as many comments as I can. So thanks so much, and also a big thank you to Incogni for sponsoring this video, but more on that later. Alright, so in terms of what happened, all of this started with the informal announcements of worldwide tariffs going into effect on April 9th. Initially, the plan was that this would bring manufacturing back to the United States, we can negotiate favorable trade deals with the rest of the world, and it would bring back demand for more locally made products. But when those tariffs were revealed, it was significantly higher than anyone expected, and as a result, the market immediately began selling off. After all, this really could only go two ways. Scenario A is that Trump announced significant tariffs to the rest of the world, they realize he's not bluffing, the market goes down, but other countries quickly try to negotiate a deal, knowing that it's going to hurt them more than it's going to hurt us. Or Scenario B is that Trump announces these significant tariffs, the rest of the world doesn't back down, and it becomes a stalemate to see who gives in first, with the biggest contender being China, because they're one of the largest trading partners. And if that happens, it's truly an unprecedented event, and we have absolutely no idea what could happen. Even though this one is going to be impossible to predict the future, we can look back in the past to see exactly what's happened during previous market crashes, and this is where things get very interesting. In terms of how bad things could potentially get, take a look at the year 1907. This is a time when the stock market crashed 50% after the 1906 San Francisco earthquake, when heavy insurance payouts caused people to withdraw their gold from banks. Of course, that resulted in people cashing out, the stock market collapsed, and fun fact, but that actually led to the stock market and fiscal policies that we have today, known as the Federal Reserve. But shortly after that 50% sell-off, the stock market wound up surging 193% over the next four years, and that continued until the Great Depression of 1929. Back then, the issue was that banks were lending out so much money to anyone who wanted to borrow for the sake of investing, because the stock market just kept going higher. Well, once the market began topping out, people started selling, panic ensued, people began withdrawing their money from the banks, and the banks couldn't afford to give people their money back, because they had loaned it all out for people who wanted to invest. This led to the stock market dropping 83% over almost three years, with a nearly 25% unemployment rate among Americans. To make matters worse, tariffs were placed on foreign imports, with the thinking that that would help drive demand for locally made products, but in actuality, that entire plan backfired and made the entire situation that much more severe. In fact, the market didn't recover for almost 20 years when World War II offered enough work for the 17 million Americans who were unemployed, at which point the stock market started going up another 14 years, with a gain of 815%. Although after that, as the war ended, we saw another drop of 22% now that the government was spending less money, and some of those veterans re-entered the workforce, but couldn't find enough work. But after that sell-off, we saw 15 years of solid growth, with prices increasing over 935%. But then in 1973 and 1974, the stock market lost another 40% of its value. This occurred when President Nixon removed the dollar from the gold standard. This caused prices of everything to skyrocket out of control, the Federal Reserve quickly raised interest rates, and that caused the entire economy to collapse. But eventually, like clockwork, the market recovered, and over the next 13 years, the average gain was 845%. But then we have another one that a lot of people seem to bring up lately, and that would be Black Monday of 1987, when the stock market lost 22% in a single day. However, that one was very short-lived, and over the next 13 years, the market ended up rallying another 800%. Then we have the dot-com bubble of 2001, which was caused by a frenzy of internet-related companies and people buying into them because they thought that the internet was going to be the future. But none of those companies ended up making any money, and when they finally collapsed, they took the entire economy down with them, with a lot of the market falling between 40-60%. But even after that, we saw another 5 years of growth, with the market increasing 110% until the Great Recession of 2008. I'm sure this doesn't need too much explaining, but basically, banks lent out way too much money to people who couldn't afford it, and when people began defaulting on those loans, banks themselves couldn't afford to pay back their investors, and the banks went out of business. This caused the stock market to fall as much as 40-50%, but then we recovered with one of the most profitable and longest-running bull markets in history until COVID when the markets fell another 30%. To help with that, the government printed a lot of money to keep our economy afloat, and that resulted in a 120% increase over the following 5 years. Until now. At the time I'm recording this video, the S&P 500 is down about 20% from its peak, and in terms of what's most likely going to happen next, you're 100% going to want to hear this. Although before we go into that, just like it's really important to protect your finances and your investments, it's also important to protect your data. Like, I don't know about you, but I've been getting a ton of these easy-pay toll road notification texts, and no joke, the first one I got, I almost fell for it, I almost paid it, until I realized it was a scam. Wait, hold on one second. It means that your name and contact... Spam caller. Look, if this is happening to you, this means that most likely your information's floating around on the internet somewhere in the hands of third parties, spammers, data brokers, and anyone else who might want to target you. Even though this sounds absolutely horrible, the good news is that you have a right to protect your privacy, and request that data brokers remove the information they have about you. And even though this could take a lot of time to do yourself, our sponsor, Incogni, is there to help you do exactly that. They could do all the work for you, by reaching out to data brokers on your behalf, requesting your personal data be removed, and dealing with any objections that websites or data brokers might have. And since many data brokers continue collecting your information, even after they've removed it, Incogni makes sure your information stays off the market by conducting repeated removal requests. All you have to do is create an account, grant them the right to work for you, and then sit back while they keep you updated every step of the way. They're also available risk-free for 30 days, so anyone is able to try it out for themselves and get a full refund if you're not 100% satisfied. So if you're interested in having your personal data taken down, you could get 60% off an annual plan when you go to incogni.com slash gram and use the code gram. Like I said, they have a risk-free 30-day money-back guarantee, so you could always try it out and see what you think. The link is down below in the description, or you could go to incogni.com slash gram and use the code gram. Thank you so much, and now let's get back to the topic at hand, investing. All right, so in terms of what's most likely to happen next, keep in mind that throughout history, there's always a good time not to invest. Even though it's very easy to think that events like this are really rare or uncommon, when you look throughout history, they're actually a lot more frequent than you would expect. Like just take a look at this chart here. As you can see, over the last 80 years, almost every decade, there's something that happens which causes a stock market sell-off, but over time, eventually it recovers and we continue moving on as normal. Like here's the thing we need to realize. Even right now, at the time I'm making this video, prices have only fallen to the point that they were at just over a year ago, and objectively, the S&P 500 is still up significantly when you look at the last five years. Put another way, imagine the stock market's a crazy eccentric person, and it tells you, if you give me your money over the long term, I'm going to give you 7%. But here's the thing. Just earning 7% a year is really boring, so here's what I'm going to do instead. Some years, you're going to make 50%. Other years, I'm going to take 50% from you, and some years, I'm going to give you nothing. It's just over the long run, you're going to average 7%, but some years are going to be really good, and other years are going to be bad. Okay, that's my really weird impression of the stock market, but basically, when you look at a chart over the last 100 years, here's what it looks like. Obviously, green is profit and red is losses, but overall, there's a lot more green than red. But there are some red years of 17% losses, 23% losses, 30% losses, and even 40% losses, although guess what? After every single one of them, there are years, and usually multiple years, of green. And if you had panicked sold to try to find the bottom, you would have missed out on some pretty substantial profits. In fact, this is a funny picture I found on Reddit that summarizes this perfectly. It starts off by buying into the market, seeing some profits, being happy that you didn't wait, but then seeing the market drop, being excited about the market dropping because you get to buy more, then all of a sudden, it keeps dropping and you start to panic. Things get even worse. Things continue to get worse. Then you sell at a massive loss. Things drop even more. You're glad you waited. Then things start turning around. Prices go up. You hold out, expecting things to drop even more. And then they don't. So eventually, you buy back in at the same price you did originally, except now you lost a lot of money. I hate to say it, but this is very true of so many investors. I've seen so many people do this in 2009, 2010, 2018, 2020, and I'm sure even again recently, where they sell out of the market, they wait to buy the dip. They never buy the dip. They hope it keeps dropping further, but they end up missing out on pretty amazing profits afterwards. Really, all I'm getting at is this. For the last 120 years in the stock market, the only consistent strategy that has always worked is to buy and hold on a regular basis with a time frame of 20 to 30 years. That's it. I don't know why, but for some reason, the stock market is the only thing where if prices end up falling, people go into a state of panic. And really, from my perspective, unless you're planning to cash out and retire in a few years, whatever the stock market does in the short term is completely irrelevant. Like you wouldn't go in panic if all of a sudden the iPhone goes on sale for 50% off, right? Instead, you would see that as a good opportunity, and you might even just buy another iPhone because you see, oh my gosh, this is a 50% off sale right now. That's a fantastic deal. I'm going to go and buy another one. Well, how is that different from the stock market if you're not planning to retire anytime soon? If you own stocks and you intend on holding onto them for another 10 to 20 years, what does it matter if we see a 30% drop temporarily in between then? You should really see this as a Black Friday sale, where all of a sudden you're able to buy the same stocks that you were able to a few months ago for significantly less. And this to me is where a lot of the money is made. Like imagine you went and bought some eggs at the grocery store, and then you go back a week later and those same eggs are 30% less. You wouldn't think to yourself, oh darn, I overpaid for those eggs. You'd probably just think, oh great, you know what, I buy some more eggs and now they're cheaper. The same thing applies to the stock market. That's why I've never understood why people panic so much when the stock market goes down, or they think it's an apocalyptic scenario that we're never going to be able to recover from because history has shown us time and time again that the market eventually will recover. In my honest opinion, I think the biggest risk with this market is for people who panic sell, for those who decide not to invest, or for those who invest in very risky assets in hope of making a lot of quick money, but instead they can't afford to stomach the losses. In those cases, yeah, you might actually have legitimate problems. But for those who stay employed, keep their plan as usual, and continue buying in despite the lower prices, long-term history has consistently shown that you're going to be just fine. Not to mention, price drops like this should really be seen as one of the biggest opportunities out there. For instance, in a weird way, the 2009 Great Recession was a once-in-a-lifetime buying opportunity for people to buy into things that they never would have been able to otherwise. Like I bought full-on houses in California for $70,000. Seriously, houses. Stocks were also trading at a fraction of the value that they are today, and I actually remember buying Ford stock in 2009 for $2 a share. Real talk, not enough people are saying this, but riches are made in recessions. Now we shouldn't try to time these recessions, but when they do happen, it shouldn't be a spooky thing. You should just be looking at this as a 100% amazing opportunity. In my mind, now is the best time to take a proactive approach to your finances by living below your means, going through your expenses, cutting out anything you don't absolutely need, and then seizing whatever opportunities in front of you. If people ask me today if it's a good time to buy into the markets, I would argue, yes, as long as your time frame is the next few decades and you have a consistent income to stick with your plan as usual. And don't get me wrong, I have no idea what's going to happen in the future. Maybe the markets go up another 20% from here, or maybe they go down another 20 to 30%. I have no clue. Just place a strong emphasis on staying employed, keeping your expenses low, beefing up your emergency fund if that's something you need, and then carrying on the usual plan to dollar cost average long-term. If anything, just view this as a test of your willpower not to panic and not to get ahead of yourselves and get emotional when the market's down. And lastly, as our almighty investing savior Warren Buffett said, be greedy when others are fearful, fearful when others are greedy, and smash the like button for the YouTube algorithm if you haven't done that already. So thanks so much, and also make sure to leave a comment down below because I'll do my best to read and reply to as many of you guys as I can. And thanks again. Until next time.