What's up, graham, it's guys here. So, let's face it, the stock market is easy money. In fact, in just the last 12 months, both the s - p 500, the dow jones and the nasdaq are all up over 30 and nearly every single stock you can imagine, is up substantially from a year ago, meaning it's been nearly impossible to lose money. Because of that, there's no shortage of experts, hedge funds and wall street conglomerates congratulating themselves on their wild returns, making money hand over fist.

While you think to yourself hmm, i want some of those attendees too well, not a problem to show you just how easy it is to make money in the stock market. Right now i invested a hundred thousand dollars into 10 different stocks that were picked at random by a monkey and best of all those stocks are even outperforming the s p, 500, without any time, research or work whatsoever. So we got ta talk about exactly what's going on how a monkey is beating the stock market, precisely what i invested in the strategy behind this and then finally, how you could use these exact same techniques to make as much money as possible, but first monkey business Aside, it absolutely helps me out a ton if you go bananas on that like button by making it turn blue, okay, but seriously monkey puns aside, it takes you just a quick second, it's totally free. It helps up my channel tremendously and it's a thank you for doing that.

Here's a picture of me holding a picture of me holding a picture of me holding a picture of me holding the like button and also big. Thank you to policy genius for sponsoring this. Video, but more on that later right. So all of this started in december of 2020, when i was doing some good old-fashioned stock market research and came across a quote by the economist burton malkiel, who said that a blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do Just as well as one carefully selected by experts and that got me thinking, i should try that, after all, studies have shown that not even the most intelligent investors can consistently beat the stock market.

So maybe if we took the opposite approach and took stock market instruction from a monkey with no emotional tie or ego to proof that could be enough to win over the market, but there was a problem. First, i didn't have a monkey. Second, even if i did have a monkey, it would be dangerous to give him access to a dart while blindfolded and third, i have no idea if this would actually work. Thankfully, though, youtube came to the rescue and within a few hours i was introduced to the fun-loving, celebrity monkey boo, whose owner volunteered to help me out on my quest to beat the market.

Now, obviously, we were not gon na. Have him throw darts, but he was able to pick stocks at random that i could invest in and here's how that was done. I found a website that lists the top 1 000 publicly traded companies in the us, and then i used a random number generator to pick a number one through a thousand that would correspond with the ranking of each of those stocks on the list. I repeated that process 30 times, so i could randomly select the large enough sample size for buu to pick from and then with each of those 30 stocks written down on a piece of paper.

Boo proceeded to hand, select 10 of them, where i could invest. Ten thousand dollars each and now, to my surprise, those ten randomly picked stocks by a monkey that i invested. A hundred thousand dollars into is doing better than the entire index. They were picked from up 21 in the last nine months and, if you're curious, exactly which stocks they bought and how well they did well.

Here you go the first ford they're one of the largest auto manufacturers in the world. They sold 4.2 million cars in 2020 and their new mustang mock is the number two best-selling electric suv in the u.s, the second cerner corporation. They provide health information, technology devices and hardware with more than 28 thousand employees around the world. Third online.

They manufacture. 3D. Digital scanners and the invisalign braces used by dentists, fourth and l americas, is a conglomerate of energy companies located in south america. Fifth republic services is one of the largest waste management companies in the u.s they've also begun investing into solar products and natural gas, which is not the opportunity to be wasted, get it six.

We got the infamous blackrock they're, an investment corporation with nine trillion dollars under management and a history of solid growth and smashing like button for youtube algorithm. Seventh we've got ihs market which provides data and trade processing for foreign exchange and loans. Eighth invitation homes is one of the largest owners of single-family properties in the us, owning approximately 80 000 homes. Ninth tesla, they manufacture the most popular and data-driven electric vehicles in existence recently passing more than one billion dollars in net income for the first time in its second quarter, intense netflix one of the top streaming platforms in existence with over 200 million paid subscribers worldwide.

Even though it takes you an hour just to decide what you want to watch, but this all gives me a total return of 21.62 since december 21 2020, which is higher than the 18.8 total gain of the s p, 500, and what's really weird about this, is That these returns are actually somewhat normal for a monkey and if you're confused about that, let me explain, but before we go into that since summer is almost ending, we got ta have a talk about making sure you're saving as much money as possible on life insurance And thankfully our video is sponsored today, policy genius is here to help don't get it life insurance is never something you want to think about ever needing and it's easy to keep putting it off a little bit longer, but sometimes the peace of mind associated with knowing That your loved ones are covered and financially taken care of. In the event, something happens is absolutely worth it. Policy genius makes it incredibly easy to compare quotes from over a dozen top insurers all in one place, and you could save 50 or more on life insurance by comparing quotes of policy genius, plus it's incredibly easy. First, just go and head to policygenius.comgram and then in minutes you can work out how much life insurance coverage you need and to compare personalized quotes to find your best price and best of all policy.

Genius. Never sells your information to third parties, they don't add on any extra fees and their licensed experts work for you and not the insurance companies. So you can trust them to help you navigate every step of the shopping and buying process along the way so head to policygenius.comgram to get started right now and with that said, let's get back to the video all right. So now here's the information that you've been waiting for when burton malkiel originally made the statement that a blindfolded monkey throwing darts at a newspaper's financial page could select a portfolio that would do just as well as one carefully selected by experts.

His words were put to the ultimate test. In 1988, the wall street journal simulated this experiment by pretending to be a monkey throwing darts at a random list of stocks and then comparing those results with a professional over the following six month period to see who ended up making the most amount of money. This experiment was repeated over a hundred times throughout 14 years and surprisingly, 40 of the time the monkeys earned a higher return than the experts did to make matters even worse for the experts. They barely even managed to outperform the dow jones industrial average, even though they had every piece of analysis and research available to them at their disposal.

Another group of researchers also conducted this experiment from 1964 to 2010 and they found that their monkey portfolio consistently beat the stock market by an average of 1.7 percent a year 96 of the time, and it doesn't even stop there. Goldfish's stock picks were simulated over a thousand times and beat the market an average of 14 and a half percent over three years. There's also a cat who beat the market by eight percent. A monkey named adam, who beat jim cramer and a chimpanzee who beat 94 percent of russian bankers, which begins to make you realize this can't just be a random coincidence that all of these animal portfolios tend to do so exceptionally well, and maybe we've just discovered the Secret to becoming one of the most famous investors of all time right, well, believe it or not, there's actually a formulated reason why the monkey and animal portfolios get such a high return, and it has nothing to do with luck chance or a highly intellectual genius stock.

Picking monkey who could predict future stock prices, even though that would be really cool. Instead, it has to do with the strategy being used to pick stocks that tends to do well consistently year over year, and this is what it is. Research conducted in 2013 found that by randomly selecting 30 stocks out of the top thousand companies and then buying them all in equal proportions, you're increasing the likelihood that such a portfolio would contain smaller stocks, which have higher potential for more growth and because monkeys were not Emotional and didn't panic sell because cnbc ran an article with a headline that was kind of spooky that led to an outperformance of the entire market year after year, or in other words, smaller companies have a stronger likelihood of seeing higher than average growth when you buy. Those companies in equal proportions to these stronger, more established growth companies.

You increase your chances of beating the overall market index funds, on the other hand, represent companies in proportion to their size and therefore the top ten percent of stocks contribute to fifty percent of the index. Slowing down your overall return by giving you smaller, more consistent growth as proof of this between 1980 and 2015, smaller stocks returned 11.24 annual growth on average, while large stocks returned eight percent. So that just means when 30 stocks are picked at random, investing an equal amount in each of them, you're more likely to include smaller stocks, which would boost your overall return when compared to the index, and then voila you've beat the market. Now, even though this sounds like the ideal way to invest and you're, probably thinking to yourself well, graham, if it's that easy, why doesn't everyone just do this? Well, i hate to rain on the parade, but there is also a reason for that too.

The reason is simple risk, even though smaller companies outperformed the market by 1.7 96 of the time they experienced significant volatility, meaning just as much as they went up. They also went down, for example, if we compare the top 1 000 growth companies with the top 2 000 value companies. We could see that nearly every price movement in the value category is magnified by at least 20 to 50, so every market peak is higher and every market drop is lower and risk is something that every single investor needs to consider when they think how much money Do i want to potentially make or lose? After all, if you didn't care about risk - and you just wanted a small chance at making as much money as fast as possible - go and throw everything you have into 30 day amd call options and see what happens. But almost no one is going to go and do that because there's too much risk that you could potentially lose everything.

But you also don't want to play it too, safe either and throw everything into a savings account, because, even though there's no risk there's also not enough upside, the reality is with investing. You have to balance the amount of money you make with the level of risk. You're willing to take and for most investors, taking the short-term volatility of investing in 30, completely random stocks to get a 1.7 average tire return, doesn't generally beat the safety of investing in 500 different companies throughout the entire index and earning a little bit less. My monkey portfolio was a perfect example of this, even though i am slightly beating the overall market that was almost entirely because of these top three stocks, which could have very easily gone the other way and worsened my return, but thankfully more people liked the mustang mock E than expected, and that's good for me, i was also just as perplexed about the performance of these stocks, because i'll be honest, it's not what i expected.

Initially, i had the highest expectations for both netflix and tesla, which, as you could see, were some of the worst performing stocks of the entire list. On the other hand, the stocks - i was not extremely optimistic about including invitation homes, ford and republic waste management were some of the highest returns in the entire group, which i was not expecting. It really goes to show you that, sometimes, even though we think we have the best instincts, we really don't, and objectivity is nearly impossible to utilize for something like this, because these were stocks that i never would have invested in on my own if it were not For a stock picking monkey, that's why, as interesting as this experiment is and as fun as it is to research and watch when you account for both stability and risk, the best investment still tends to be throwing it all. In a broad index fund tracking the entire market and then doing absolutely nothing, even though technically 96 of the time you're going to see a slightly lower return, you end up paying that extra little bit for the assurance that your returns will be more stable.

The drops will be smaller and you'll see more consistent growth over decades and not necessarily years. This strategy has even outperformed the best hedge funds and actively managed investments in the entire world by a rate of nearly double showing you that over the long run, no one has a clue what's going to happen, including myself, even though everything is really easy to point To in hindsight, in the moment there are so many different variables that you have to take into consideration that may or may not happen, which really makes it impossible to predict any meaningful outcome. On top of that, let's be real. The entire market is up from a year ago and you could have invested in anything and look like a genius.

After the fact. It's important not to let this get to your head or for you to think you're a stock-picking genius, because everything is up and as the billionaire chris sacca said, to everyone who got into stock trading this year, i have a little hard truth for you: you're, not Actually that good at it, you just caught a wild bull market, which in a way, is true. Now, as for the monkey portfolio, i will continue to watch how it performs over the next year and as a thank you for making it to the end of the video. I got a challenge for you.

If we could get this video to a hundred thousand likes. I will strongly consider investing a million dollars into recreating this experiment again by going back to the monkey boo having him pick a random 30 stocks and investing 33 000 into each of them, and then we could see exactly what happens to it over the next year. When we compare it to the overall stock market, if you think i'm joking with this hit the like button, if this actually gets to 100 000 likes, then i know there's enough demand out there for me to go ahead and do this. So until then the choice is yours: either: invest your money in a broad index fund and get a safe, stable return or smash.

The like button and watch me invest a million dollars into a stock picking monkey enjoy. So with that said, you guys thank you. So much for watching, i really appreciate it as always make sure to smash the subscribe button, and the notification bell also feel free to add me on instagram. My posts are pretty much daily, so if you want to be a part of it, there feel free to add me there.

As my second channel. The gram stefan show i post there every single day. I'm not posting cures. So if you want to see a brand new video for me every single day, make sure to add yourself to that.

And lastly, if you want a completely free stock, that's now worth all the way up to 70 dollars, use the link down below in the description and sign up for public and plus, i am posting all of my own stock trades on there. So if you want to see exactly what i am buying, the link to that is down below in the description enjoy, let me know which free stock you get and thank you so much for watching.