One of the things I haven’t really covered yet in my videos is the risks of investing and how to recover from a market crash, especially now with stocks at their all time highs. But is it possible to time the market? And what’s the best time to invest? Well, according to statistics, doing THIS is what generates the highest profits. Thanks for watching! Feel free to add me on Snapchat/Instagram: GPStephan
Here’s the stock market timing game!
https://qz.com/487013/this-game-will-show-you-just-how-foolish-it-is-to-sell-stocks-right-now/
If you expose your money to any type of market, you expose your money to risk - it’s unavoidable. But markets are cyclical and there will be a time when the markets go down and you see some losses.. It’s totally normal. That lends the question - since the markets continuously hit all time highs, is it a good time to sell and then wait for a crash? Statistically, it’s shown that market timing rarely ever works - it’s impossible to know exactly when the market will crash and when to buy back in. Hypothetically if this is possible and you can do it consistently, great - but the chances of doing this consistently and accurately rarely ever happens, and it’s shown that time in the market yields higher average returns than timing the market.
Studies by Brad Barber and Terrance Odean find that individual investors experience reduced returns with their stock trading accounts, with increased active trading a key reason in lowering returns. Examining 66,465 US household trading accounts over the 1991 – 1996 period, Barber and Odean find that the average household account earned an annual return of 16.4% over the period, compared to the 17.9% market return. Those households which traded most earned an annual return of 11.4%.
http://faculty.haas.berkeley.edu/odean/papers%20current%20versions/behavior%20of%20individual%20investors.pdf
They’ve also determined less than 1% of households were able to reliably predict market cycles between 1992-2006.
I’m personally against market timing because no one truly knows when the next crash could be. If you pull out now, you could miss a few more years of gains. If you sell now and it crashes, how do you know when the bottom hits and when to buy back in? There have been numerous studies that show that the more you tinker with your investments, the higher the probability of achieving lower returns than if you had just stuck it out and held on to your investment.
Now speaking of risk and all-time highs in the market, what about a large upfront lump sum investment NOW, or slowly putting it in the market over time? Or waiting until the market is down, and then investing a lump sum?
Charles Shchwab ran the numbers from 1993-2012 for each investment strategy.
If you start with $2000 per year available at the beginning of each year, and bought at the YTD low every year, this resulted in $87,004.
If you just invest immediately as soon as you have it, you’d have $81,650.
If you invested $2000 equally every month over the course of the year, you’d have $79,510
If you had bad timing and bought at the YTD high, you’d have $72,487.
And if you had cash investments, you’d be left with $51,291.
http://www.schwab.com/public/schwab/nn/articles/Does-Market-Timing-Work
The study concludes that the most reliable investment method has always been to buy immediately, and hold. Do not try to time the markets.
So how do you deal with risks and the possibility of losing money? First, don’t invest money you will for sure need in the next 2-5 years. For all other investments, have a long term outlook - don’t be too short sighted to panic sell or try to time the market as soon as it’s down. Instead, you should see this as a long term 10-20 year play.
According to research conducted by Charles Schwab Company in 2012, between 1926 and 2011, a 20-year holding period never produced a negative result!!
For business/music inquiries, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Here’s the stock market timing game!
https://qz.com/487013/this-game-will-show-you-just-how-foolish-it-is-to-sell-stocks-right-now/
If you expose your money to any type of market, you expose your money to risk - it’s unavoidable. But markets are cyclical and there will be a time when the markets go down and you see some losses.. It’s totally normal. That lends the question - since the markets continuously hit all time highs, is it a good time to sell and then wait for a crash? Statistically, it’s shown that market timing rarely ever works - it’s impossible to know exactly when the market will crash and when to buy back in. Hypothetically if this is possible and you can do it consistently, great - but the chances of doing this consistently and accurately rarely ever happens, and it’s shown that time in the market yields higher average returns than timing the market.
Studies by Brad Barber and Terrance Odean find that individual investors experience reduced returns with their stock trading accounts, with increased active trading a key reason in lowering returns. Examining 66,465 US household trading accounts over the 1991 – 1996 period, Barber and Odean find that the average household account earned an annual return of 16.4% over the period, compared to the 17.9% market return. Those households which traded most earned an annual return of 11.4%.
http://faculty.haas.berkeley.edu/odean/papers%20current%20versions/behavior%20of%20individual%20investors.pdf
They’ve also determined less than 1% of households were able to reliably predict market cycles between 1992-2006.
I’m personally against market timing because no one truly knows when the next crash could be. If you pull out now, you could miss a few more years of gains. If you sell now and it crashes, how do you know when the bottom hits and when to buy back in? There have been numerous studies that show that the more you tinker with your investments, the higher the probability of achieving lower returns than if you had just stuck it out and held on to your investment.
Now speaking of risk and all-time highs in the market, what about a large upfront lump sum investment NOW, or slowly putting it in the market over time? Or waiting until the market is down, and then investing a lump sum?
Charles Shchwab ran the numbers from 1993-2012 for each investment strategy.
If you start with $2000 per year available at the beginning of each year, and bought at the YTD low every year, this resulted in $87,004.
If you just invest immediately as soon as you have it, you’d have $81,650.
If you invested $2000 equally every month over the course of the year, you’d have $79,510
If you had bad timing and bought at the YTD high, you’d have $72,487.
And if you had cash investments, you’d be left with $51,291.
http://www.schwab.com/public/schwab/nn/articles/Does-Market-Timing-Work
The study concludes that the most reliable investment method has always been to buy immediately, and hold. Do not try to time the markets.
So how do you deal with risks and the possibility of losing money? First, don’t invest money you will for sure need in the next 2-5 years. For all other investments, have a long term outlook - don’t be too short sighted to panic sell or try to time the market as soon as it’s down. Instead, you should see this as a long term 10-20 year play.
According to research conducted by Charles Schwab Company in 2012, between 1926 and 2011, a 20-year holding period never produced a negative result!!
For business/music inquiries, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
You sound nothing like you do today.
I see a fluffer in the background
Wow you were way more fit here
“SunCor Financial MPI review""
Things to value in life freedoms , nature, peace of mind, and normal conversation.
People lose money because they don't understand the markets and they don't have an investing plan. After studying various experts, I tried using the best from each. I've managed to get 50%+ per year since 2014. Not only that, but I've also learned to make money during stock market crashes.
I don't mean to brag – I just hated the concept of investing money when the markets were not favorable to making profits. I spent six months trading on simulated accounts (TD Ameritrade ThinkorSwim). Initially, I lost big time. Progressively, I corrected my mistakes and started making money on a regular basis. I am far from greedy. If I don't have a good feeling about the market on a particular day, I just turn around and go away until a good day comes.
I respect other strategies. Mine made me a successful trader. I learned to time my investments while reducing risks as much as possible.
Good luck to all.
Outside the swearing in the video . Information is still relevant today .
Weird hearing you curse lol
Unfortunately people Pay money to SoCal financial advisors to hear the same crap
The Fed controls everything now starting in 2009. Your whole theory is blown.
Look 3 years later and the market is the highest it's ever been!
Im nit yrying to time the market over n over again .just one time after the crash
I took it twice, I panicked the first time and wouldn't buy or sell the second time. I can't even imagine this with real money.
Heads up: you forgot to filter out your swearing at around the 7 or 8 minute mark. I’m not offended but it might affect video monetization 🤷♂️
Out of 10 plays, I beat the market Once. Lmao. Thanks, that game is pretty eye opening.
Great breakdown & advice man 👌
Time in the market > Timing the market!
Excellent video, backed up by facts. Re-iterates what a lot of people say that its best just to wait out the dips and not panic.
lol, beat the market almost everytime in that game….now whats tempting is look at our 10 yr mountain…seems like an easier game
Thank you Graham!!
I always search random financial topics and your videos always pop up and they've been my favorite ones.
In the last crisis, the market bottomed on 03/06/09, but we could only see that in the rearview mirror, nobody saw it through the windshield.
That’s a pretty vague advice, you should balance your portafolio at least once every year, based on age, market conditions with the idea of capital preservation. There are ways to hedge your portafolio to prevent massive loses
gotta pop my cat eyes in
extremely intelligent video!
The stock market timing game is cool but kinda broken.
It random lines miss the point of knowing how long the present bull or bear market has been, in real life we can see the present bull market has been ongoing for 10 years, this is a key indication for a crash whereas in the game this is not apparent
I played the game and I beat the market with 21,000
Bah blah blah the market the market and don't buy in high risk markets blah blah blah. BULLSHIT. Why do stock investors never give an example of a fucking STOCK that they have bought and made money on. Buy some piece of paper in a company and hold on to it for 20 to 30 years in hope that the shit doesn't tank is fucking dumb and very old thinking. And this coming from a real estate guy? How's that Sears stock that you bought 30 years ago doing? Maybe if you got the fuck out of California you would see that real estate is hands down the best investment.