Hey guys it's ash, and today i thought i'd share five very unpopular truths about investing that. You really need to know. I am so sorry for how unpopular these might be. Investing in the stock market has developed its own weird echo chamber, on social media and on places like youtuber right here and in this investing club.

I see some big misconceptions that people write in the comments over and over and many investing channels very actively promote. So i thought i would point out five of the most important ones here, but massively massively important truths in this video. It isn't going to make me any friends, and i am guessing some of you watching. This might not like what you hear, but sometimes truth hurts, and it's still really important.

So if you really want some actual advice here without all the sugar coating and all the bs, this is what you're going to get. The first truth is that most investors are focused on completely the wrong thing. Everyone is obsessed with optimizing their return strategy. People will study individual stocks for days.

I know i am guilty of that myself. I did it last week, although it kind of is sort of my job, but people will watch endless youtube videos about stocks read stuff online. Do their analysis then, do the exact same thing the next day and the day after and it's gon na be a massive massive use of time? But if you just spend that time on earning more money, you would probably do a whole lot better. With your investing - and this is the unfortunate truth, because if you piled that amount of effort and time into working harder, you could maybe get a bigger bonus, maybe you could get a promotion earn more money.

Maybe you could build a side hustle on the side that earns you extra income or whatever, and then, if you took the money, you would earn as a result and invested that on top of the money that you already have invested and are continuing to invest, you Probably have a much bigger investing pot at the end, it is frustrating because most of us don't want to hear it, but earning money can that you can then invest is far more important than being really good at picking your stocks. Investing 10 more money will give you an order of magnitude, more return into your portfolio than improving the rate of your return by ten percent. Just think about that it doesn't matter how good you are in investing if you invest just say two hundred thousand dollars. Instead of a hundred thousand dollars, your portfolio will most probably look much better in five years time, even if you just stuck it all into a total market index, which brings me very nicely onto the next unpopular truth, you might be about to guess it most.

People should not be picking stocks. Most people should not be investing in individual companies. I know that this is what i talk about on my channel, and this is what you want to watch videos about. This is probably why you're here and it's exciting in a way right, i get it you get to make analysis you get to make choices, it's interesting.

It kind of wires your brain up and there's an element of excitement in there, and your choices might win, but maybe they'll also lose. But the fact remains that when you look at longer periods of time in any study you want 20 to 25 years sort of time scales. The stock market average will beat. The vast vast majority of active investors, 90 to 95 percent of active fund managers, lose to the stock market over time.

This is a fact, and that's people who have almost infinite means infinitely more capability and capacity than average smokes. Like me, they have far more data than i or you have. They have hundreds of analysts who are working for them. They have sophisticated technology, almost impossibly complicated computers, amazingly smart models, and they also have decades of experience, but almost all of them.

These guys are loose to the market over time. So what chance, if you just think about it for a second, do you have and sure those people have certain restrictions, certain bounds, certain limits that they have to stick to which you, as a retail investor, do not have, and you might also happen to start investing During i don't know the biggest bull run in the history of the stock market, where picking literally any stock, especially gross stocks. You felt like it would get you a ridiculous rate of return and then it's easy to think that you're god's gift to investing - and it's so easy - you can just go and do it over and over every single year and you're gon na be a bazillionaire. But time is a very powerful thing and the unfortunate truth is that the vast majority of us for the vast majority of regular investors, just sticking our money into the s p 500 index - will most probably perform far better than we will by trying to be smarter.

I know it's a pretty self-deprecating thought and we all think that we're in that five percent of special people who are smarter than the rest and are better than the rest. But the truth is that we probably are not so there. You go have a little ponder on that one. The next truth that you probably don't want to hear is that you're going to lose a money trying to time the market and yeah.

It happens to everyone, and it will at one point happen to you, no matter what you tell yourself how strict and disciplined you are. How amazing you think, at sticking to your principles, it will happen and that one time when you think you are sure you are doing the right thing, you're making it for the right reason. But the market will just go and turn around slap you hard in the face and laugh at you mocking you. It happened to me last week, elon announced on twitter two weeks ago that he's selling 10 of his shares and then he went and sold about half of that over the course of just one week and the share price tanked by about two hundred dollars.

And so he had another half to sell and everything was pointing to him continuing on that route until we sold out the whole thing, and i moved some of my tesla positions out to other high upside stocks expecting new to go somewhere further down. I don't know where, but it was just going down hard every single day he was sending huge amounts of stock and then the sale never came. Who knows maybe elon is taking a pause. Maybe he's never gon na sell it.

Maybe he can't sell because he has material information that he is uh privy to. That means that he's in a holdout window, i it doesn't really matter. The market turned around smacked me in the face and laughed at me, and i hardly ever do anything like this and the one time i did, and this is what happened and at some point i can guarantee it will happen to you too. You might not think that you're even doing it, you might not realize that you are actually trying to time the market, but you'll do something that will actually be doing exactly that.

You'll wait to buy shares because you want to wait for the quarterly updates. In two days that will definitely, in your opinion, cause the price to drop or you'll wait to invest in the stock, because you think it will trade sideways, maybe for the next two years, because it'll take some time for it to break even and only then you Think it's going to begin going up and then inevitably the exact opposite of what you think will happen will happen and you're going to be kicking yourself and getting really annoyed with yourself. Because here is some advice. This will happen to you, but don't beat yourself up about it.

The game of investing is long. You are chasing a long-term averages. You will not win every battle, you're not going to get it perfect. Nobody does, but sometimes we all just need that little reminder lesson.

The timing, the market is a losing strategy. The next unpopular truth has become a whole lot more important. In the last two to three years, we have had an absolute explosion in the number of retail investors, and, alongside that, we have had an explosion of advice for those retail investors in how they can optimize their investing returns and a fast growing niche in this advice Is leverage people are becoming very greedy? Now you don't anymore, just want to invest in a stock. Now you want to go and buy it on a three times leveraged position.

Instead, because you get three times the returns right, you don't want to just buy a stock directly. You want to play with options. You don't want to invest the money, just the money that you have earned. You want to go and borrow on margin and invest even more so that you can earn more money, and this way of thinking is becoming very mainstream, which is quite unfortunate, because here is a fun fact that you probably will not like leverage.

Is not your friend sure some people will be able to make money with leverage, but the downsides are spectacular and if you see any of those disclaimers the majority of people who try will lose money and that isn't just the beginners. This is not just the noobs leverage is dangerous, especially as the same people who play with leverage, often like investing in growth or the more speculative end of the stock spectrum. Stocks that tend to fluctuate, go up and down a lot more and if you go and load up on leverage on a stock that then loses say a third of its value for no apparent reason. The market has decided to just do whatever it does.

You will then have not just you know, lost a third, you will have lost all of your money, you don't get to patiently wait out the dip and you know wait for the recovery and then wait for the stock to go back up. You have lost your money is gone. Leverage is far more complicated and requires a very different kind of risk assessment to normal investing for most regular investors. Leverage is probably not a good option.

That is why some platforms will force you to do a whole lot of sales certification. This isn't just a regulatory thing. It's there for a good reason and some investing platforms make access to things like leveraged cfds are much more easy than others which has sort of normalized these things and people now see them as being not that different, just another, a different way to invest. But leverage is a very dangerous game, it is very active game and it can very easily completely murder your entire investing strategy and your portfolio.

So if you really do want to play with it, that's your prerogative. I'm not going to tell you what to do. Just remember that leverage is not your friend and most people who play with that fire are going to get burned, and now we get to the most painful of all the truth and i'm so sorry in advance, because this one might hurt here it is winning big At gambling does not make you a great investor, just look at what happened over the past year, we've had stocks explode out of nowhere and head for the stratosphere. We've had spacks that took ten dollars, investments all the way to sixty dollars in just the space of a few months, we've had the whole gme and amc sagas where stocks stop trading and anything remotely related to any kind of numbers or fundamentals based stuff.

In a short squeeze game against the big boys in the hedge funds, and some people have made a lot of money on these things, i am not denying it, but here is the unpopular truth. If you say wrote that amc train all the way up from two dollars at the beginning of the year to over 60 dollars in june. That's great enjoy your money, pat yourself in the back, but i can tell you now that, just because you did, it is not some kind of sign of being an investing genius. It is a gambling win that paid off big great, but i can tell you now that if you try to play that game 10 times in a row in different times with different scenarios and different companies, you won't flip heads every single time, and this is a Very common issue: at the moment we've got people who have made a huge amount of money on like dolce coin or some pump and dump token or some meme stock or whatever, and then that person is immediately elevated to a status of cult hero in some investing Circles and on places like reddit, because we have this massive survivor, bias problem, the thousands of people who lost a lot of money on other tokens or maybe by investing in the exact same short squeeze of bump and dump just too late.

Don't get interviewed by mainstream media and don't get elevated into this position where everyone listens to what they have to say now, when you're looking for someone to learn from just be wary just because someone scored a big gambling win does not in any way make it More likely that they will be able to get a return of over 20 per year from the stock market consistently for a couple of decades. In fact, i would wager the exact opposite if you found this video useful, please don't forget to smash the like button for the algorithm. Thank you so much for watching. I really really appreciate it and, as always i'll see you guys later, you.