What's gram up, it's guys you here and as most of you know, i like to find unique ways to make money in the stock market like in the past, we've determined that easy to remember. Ticker symbols like woof outperformed, some of the best investors over a 20-year period, a monkey picking random stocks from a tupperware container was able to beat the s p 500 and simply doing the opposite of retail. Investors typically gives you a better edge, although today we have something quite different. The average retail portfolio has officially crossed into the negative meaning.

The average investor now has an account balance, that's lower than where they first started, which is not okay, not on my watch, and that has to stop right now. So, let's talk about the new retail investing frenzy that you need to be made aware of whether or not hedge fund selling could be the latest signal to watch out for and how brand new cryptocurrency executive order is about to affect the price of bitcoin and ethereum. In the near future, all of that to end more on this episode of good luck, getting your employees to come back to the office when gas now costs as high as seven dollars a gallon in california. Although before we start, if you appreciate all the research and work that goes into making a video like this, it does help me out tremendously.

If you gave the like button a gentle tap or you subscribe. If you haven't done that already, that's it. So, thank you guys so much and also big, thank you to wealthfront for sponsoring this video, but more on that later, all right. So first we got retail investors, even though most people might assume this encompasses.

The redditor on wall street bets posting about making profits from stock splits warning of an s: p, 500 downtrend and signaling a 50 crash in q4, while simultaneously, writing that warren buffett isn't actually a great investor. It's pretty funny, but in actuality, the retail investor represents 81 percent of the market participation, they've, outpaced institutional money throughout 2022 and they're doing a really really bad job at investing. In fact, during a 20-year time frame where reits oil and the s p 500 averaged an almost 10 return, the retail investor barely managed to outperform inflation at two and a half percent. Why is it so bad? You might ask? Well, it's largely summarized that retail investors are prone to buying in at peak hype selling at the moment they lost any money and then repeating the process over and over and over again, while proceeding to lose even more money.

So what does this tell us? Besides, that? You should get a free stock down below in the description when you sign up for public using the code, graham because that could be worth all the way up to a thousand dollars. Well, first of all, before we answer that, it's really important to mention that right now, bank of america reported that retail investors have been a net buyer every single week. So far this year, saying that retail clients have been more aggressive buyers of this dip than any other 10 correction post crisis, potentially on the fear of missing out on what has generally been a successful strategy post crisis. At the same time, though, hedge funds are reducing their exposure to the market in the wake of the russian ukraine invasion, so who's right.

Do retail buyers typically signal the top of the market to or do hedge funds know something that the rest of us? Don't? Surprisingly, bank of america responded by saying s: p 500 returns following periods of retail inflows have been above average and return post selling have been below average, with retail flows a slightly better positive indicator than hedge fund flows, or in other words retail. Investing is typically followed by a higher return. So what gives and is it true well in the short term, their study found that, yes, retail investors are better than hedge funds for signaling an increase over the following four weeks with an average return of 0.35. During the time frame, but here's where things get even more interesting, if you really want to try to predict market returns, look no further than institutional investors who sees a 1.3 increase in the following four weeks after buying it.

Although here's another twist and turn that i just didn't expect when it comes to institutional buying research, the university of chicago uncovered that throughout 783 portfolios, even though they usually have great timing when they buy they're selling decisions underperformed substantially or in other words, they're really good. At picking the right time to buy, but really bad picking the right time to sell, leading them to an 80 basis, point lower return than had they just sold at random instead. So as it turns out, if institutional investors are buying, then chances are we'll see slightly higher than average returns, but if they're selling then most likely they're not selling at the best time and you're better off just holding onto it instead. But when it comes to retail investors, even though that can signal higher returns than hedge funds, it's probably not the best indicator to look at to begin with, since hedge funds have severely underperformed the market since 2011, and their goal is to maintain stability, not to optimize.

For the most profit possible, as you can see here, instead from everything that i could find, the best indicator to look at is simply total investor sentiment in which historically high investor sentiment, predicts low future returns, and vice versa, suggesting that in this case, as we approach Extreme fear, we could very well be positioned for even higher growth throughout these next few years, unless you're supposed to do the opposite of that, in which case? Is it better to do the opposite of the opposite, if i'm already doing the opposite anyway? What about stock splits with both google and amazon, about to become 120th of their price in just a few months, is now the time to get in and does a cheaper price actually correlate to higher returns based on science? First of all, a stock split occurs when a company decides to lower their price per share by splitting them up into smaller segments, thereby making them seem less expensive. It would be like having one share worth 100 or 10 shares worth 10. Both options give you the exact same amount of ownership, although psychologically, a lower share price might seem like a better value, you're able to buy more for less, and it makes it easier to trade options on the surface. Objectively speaking, news of a stock split tends to do really really well for the price of the stock and the wall street journal reported that stocks in the s p 500 tend to rise.

Five percent in the year following share splits, including two and a half percent immediately following the announcement on splits between 2012 and 2018.. We can also look to plenty of other examples from apple who share split five times and in the last five years, its price is up 353 percent or a recent one tesla, which split five to one and then instantly rallied another 25 or how about nvidia, which Split in july of 2021 and then nearly doubled, that leads people to believe that both google and amazon could see a rather dramatic surge in price once they begin trading at 1 20th of their value. Although is there any truth to that? Well, a researcher looked at the data between 240 stock split since 2010 and found that wait for it. 50.8 percent of those dog splits beat the s p 500 over six months.

That was it. Although the wall street journal took this experiment a step further and simulated, an investment strategy that only bought two to one stock, splits since 2003 and then held onto them for 30 months and they determined that the split portfolio produced a 14 annualized return. Nearly doubling that of the s p 500, including dividends. However, the reason behind this might not be what you would expect, even though it's assumed that it just looks cheaper, so more people will buy it.

Research shows the companies are likely to undergo a stock split if they believe they're going to have strong earnings growth going forward, and that, in turn leads to a strong share price. Naturally, now sure we shouldn't downplay that speculation also can have a short-term effect, along with buying cheaper options contracts, but by and large, from everything that i could find. Stock splits are only meaningful because the companies that do them are in a strong position. From the very beginning, thereby making a higher price self-fulfilling now a bigger consideration to that instead would probably be the potential inclusion of either google or amazon in the dow jones, and that, if it happens, could be huge.

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The dow jones is an index of 30, publicly traded companies and it's a widely watched and bought benchmark representing blue chip companies across the united states. Although, unlike the s p 500, the dow jones does not weight their average based on market cap, but instead by share price with the most expensive being united health group at 490. A share, obviously, both google and amazon trading at over two to three thousand dollars a share would place them well out of their ability to be included because they're simply just too expensive, but this stock split would place them precisely in line with all the other share Prices within the index now, of course, just like the s p, 500 inclusion in the dow jones isn't automatic and there's a strict set of criteria that must be agreed and voted on to determine which 30 companies best represent the broad economy, as they say, a stock Is typically added only if the company has an excellent reputation demonstrates sustained growth and is of interest to a large number of investors. Now it's generally thought that a dow inclusion for either one would mean that more index funds are forced to buy into them anytime.

They rebalance a portfolio, there will be more demand and the price of the shares will go even higher, like with the russell 2000, which found that the stocks included saw a marginal increase. However, in terms of the dow jones, specifically, it's tough to say what sort of a difference this would make, since both companies are massive to begin with, they already make up a significant portion of the s p, 500 and one study found. The share price increase was stronger on the announcement than the actual inclusion itself, so i would say that, yes, this does put them in the possibility of potentially being included to the dow jones based on their share price, but ultimately the company's future strength will be a Better indicator in terms of how well they do and not so much the inclusion itself, although in terms of another extremely important topic, we have to talk about the cryptocurrency executive order, which sent bitcoin prices surging 13 almost instantaneously after its release. So what was in it? Well, on the surface, their goal was to address six key points that they felt were underserved: consumer protection, financial stability, illicit activity, us competitiveness, financial inclusion and responsible innovation.

Now, in terms of consumer protection, they've made it clear that they want the treasury and other agencies to develop a set of policy recommendations to ensure the market is fair and that influencers aren't able to rug pull their audience when they bail on an nft project with Financial stability, they want more oversight to identify and mitigate the risks with digital assets by developing a set of guidelines and reducing the regulatory gaps that currently exist, like tether's ever-evolving audit scandal. At the same time, they want to take a stance against people using cryptocurrencies for illicit purposes and better identify what those purposes are, so the public can be more prepared. That opens the door for the us to increase its own leadership and innovation by establishing a framework to leverage new technology. This could also be the start to creating the us digital dollar.

By doing so, they'll be able to provide better education for those investing buying or holding cryptocurrencies, and that will include a report on payment systems, implications for economic growth, inclusion, national security and the extent to which technological innovation may influence that future. Their words not mine, because they made that sound, very complicated and finally, they want to ensure the responsible development of digital currencies and direct the us government to help, while prioritizing privacy, security, combating illicit exploitation and reducing negative climate impacts. Overall, this is seen as an incredibly supportive action that legitimizes cryptocurrencies by making them worthy of regulation, while placing a pretty high importance on both education and innovation. I would also expect to see that, as a result, we're going to see a lot more regulation against pump and dumps prosecution against people who promote a security under the guise of being a cryptocurrency and ridding the market of bad actors who are only in it.

For the quick money it can also bring us one step closer to the holy grail of getting a bitcoin or an ethereum etf. So, yes, i do think this was a move in the right direction and long term war regulation, i think, is only going to help cryptocurrencies even further. And finally, i think it's worth commenting on the current state of the real estate market, which just recently saw the 30-year mortgage spike to 3.85 surpassing expectations for how high they thought this might continue to go throughout the next year. This is at the same time that rents rose their fastest pace in 30 years, as inflation increases, the cost of insurance, repairs, labor and every other aspect of owning a home, along with the outlook that prices could go even higher.

The reality is low. Inventory is not going away and as mortgage rates rise, even though that might dampen price growth, it also risks keeping current homeowners in place, who want to keep their low interest rate mortgage then move and have to get a new one at an even higher interest rate. When asked about this, the economist at first american financial, said that rising mortgage rates may be a housing market headwind in 2022, but housing prices will moderate, resulting in a more balanced market, meaning prices might not rise as fast as they have been, but they could still Very well rise. The key point to look for throughout the next year is simply going to be how many new homes are coming on the market.

As they say, the real estate market's defined equilibrium is a six-month supply of homes for sale when it goes above that mark the options are plentiful and it becomes a buyer's market. Anything below is more beneficial to sellers january's inventory, measured 1.6 months, leading, of course, to the prices that we're seeing today now, ultimately, as someone has been in the real estate market full-time for over 13 years, my advice is to only buy a home that you intend On keeping for seven to ten years only buy a home that you could reasonably afford and don't intend on speculating on. At the end of the day, it becomes very difficult to predict what might happen in the short term, but, generally speaking, the longer you hold on to your home for the lower the chances you have of losing money or hey. You know what maybe the market just keeps going up even higher, and you make a lot of money.

Who knows, i'm just a guy on youtube, trying to get you to sign up for my new weekly newsletter, that's down below in the description, because i just started that up and it's totally free. So with that said, you guys thank you so much for watching also make sure to subscribe, feel free to add me on instagram or on my second channel. The gram stefan show i post there every single day - i'm not posting here. So if you want to see a brand new video for me every single day, make sure to add yourself to that and, lastly, make sure to get your free stock down below in the description when you sign up for public using the code, graham because that stock Could be worth all the way up to a thousand dollars, you may as well do that pretty much like free money.

Thank you so much for watching and until next time.