What's up you guys, it's graham here so historically, they say that on average september is the worst month for the stock market dating all the way back to 1950.. Now, whether or not that comes true for this month is yet to be seen, but i have to say: there's certainly a lot happening in the markets right now, all at the exact same time that could have a pretty immediate impact in your wallet and by wallet. I obviously mean your money like just in the last week. There's talks about interest rates being increased by the end of the year.

Several members of congress are now pushing to fire the federal reserve robin it could potentially get banned for the practice of payment for order flow. Social security income is running out much sooner than expected and for anyone who's wondering if money could buy happiness. A recent study confirmed that, yes, it does buy happiness, but it costs a lot more money than you would expect. Anyway, let's talk about exactly what's going on in the markets, the impact this could have on pretty much everything and then, finally, what you could do with this information to make money, although before we start i'll make you guys a deal if this video could get 69 420 likes in the first week i'll, invest ten thousand dollars into the top stock, commented on this video and then i'll report back to see how it does in six months.

So if you think that sounds like an awful idea that you would want to see just make sure to hit the like button - and let me know - and also big thank you to noom for sponsoring this video, but more on that later. Alright. So let's talk about one of the most controversial topics: first, that pretty much affects nearly everybody throughout the entire stock market, and that would be robinhood now much. This began a few years ago when people began to wonder how does a free stock trading app like robinhood? Actually make their money well on their website.

They lay it all out in the open. They earn money from interchange fees within the cash management, account interest from keeping your money on the platform. Loaning out your stocks to counterparties charging five dollars a month for a premium service, then wait a second. What's this rebates from market makers and trading venues? Oh, my yeah, you got ta hear this one out because here's where things get really interesting, this is the concept known as payment for order flow that pretty much encompasses everything throughout the entire stock market in one way or another and most likely you've paid into it.

Whether you realize it or not, now for everybody confused here's how it works when you place a stock trade on robin hood, robin hood is not the one who actually goes and executes that trade. Instead, they instantly outsource that to another company who pays robinhood for the right to execute your trade on their behalf. Why you might ask well a lot of that has to do with what's called high frequency trading, see. As we all know, the stock market constantly fluctuates in price, and every single rapid price movement is an opportunity to profit within fractions of a second as an example, if you place a trade to buy a share of subscribe for a hundred dollars by the time, your Order actually gets sent to the exchange and filled the stock price could have fallen to 99, and in that case you could be paying a hundred dollars for a stock.

That's actually worth 99 by the time you receive it, and that, of course, is where high frequency traders come in. These are essentially market makers with a lightning, fast connection to exchanges, and their goal is to help facilitate these transactions as fast as possible, while making a little bit of profit along the way. In this case, if you submit a hundred dollar buy order and the price of the stock suddenly drops to 99, the high frequency traders can theoretically see it coming, buy the 99 stock and then instantly sell it back to you for a hundred dollars, making a lightning Fast profit in a split second: now, usually, this is an amount. That's almost never going to get noticed by you in fact, bloomberg estimated that the profit amounted to be an average of only 0.0024 cents a share.

Although here's, where some of the controversy begins in 2005, the sec passed the regulation national market system, which required brokers to obtain the best execution for their clients. That means, when you place an order, the brokerage has to route it to the market maker exchange or high frequency trader. Who could give you the best price as the customer, if that means going through a high frequency trader who's willing to do it for 0.0001 cents? Great, if it's going through the exchange at a price point lower than that fine. If it's going to the market maker first perfect, it honestly doesn't matter how your order is filled or how that brokerage is compensated.

As long as you get the best price as a customer at any given time, but that's of course, where things begin falling apart in 2019, robin hood was fined for sending customer trading orders to four broker dealers without guaranteeing the best price those broker-dealers paid robinhood for Executing the trades with them, and by doing so robin hood violated the best execution requirement now, besides that, in all fairness to robin hood, nearly every single stock trading brokerage out there participates in payment for order flow, including ally, financial, weeble vanguard, charles schwab, td ameritrade. And it's a common practice that isn't necessarily a bad thing at all if they could objectively route your order flow with your best interest in mind, it's really no different than somebody getting paid a commission for recommending you car insurance. If that company, they recommended actually winds up, giving you the best price, in that case it's a win-win for everybody, but the discrepancy comes when they're, not giving you the best price and they're getting paid for it, which is bad. That's a no-no.

Well, that now leads us to what just happened and the potential that this might get banned in the u.s, the sec chairman gary ginsler signaled that he would be open to banning the practice of payment for order flow, which would directly impact nearly every single stock market. Brokerage out there and ultimately the price that you pay anytime, you buy or sell a stock. Now brokerages argue that investors actually benefit from having their orders routed through high frequency traders, because they could typically get better prices on their trades than going through a traditional market maker which profits from the spread between the bid and the ask. And by getting paid for order flow, they could otherwise offer you free trading.

It would be no different than saying if we route your order to an exchange. It'll cost you one cent, but this company over here who happens to pay us. A commission says that they could do it for half a cent. So in this case we get paid and you get a better price, so everybody wins, but the sec says this could potentially be a conflict of interest because the company is getting paid to put your best interest first and it's anyone's guess.

If that actually happens, not to mention other countries like the uk, canada and australia have already banned the practice of payment for order flow, and the free stock trading app public.com, recently came out by saying they were discontinuing all payment for order flow after the whole gamestop Fiasco so now, there's certainly no conflict of interest if you want to buy or sell a stock on the platform. As far as my own objective thoughts here, i personally do not have a problem with payment for order flow as long as there's transparency to know that your orders are routed to the best place possible if the brokerages happen to make money in the process. That's fine with me because, after all, they are running a business, but the problem begins. If and when they ever violate that best execution practice and to make sure that never happens.

We might need more transparency in terms of how those orders are processed because, as the overall perception of this changes, brokerages will have to adapt. But speaking of adapting, you know it's not adapting social security, because all the money that we were expected to receive when we get older could soon be running out and that's a huge problem. We're basically listening to what's going on, because this impacts pretty much. All of us in terms of our future finances, well really quick before we go into that a few of you have noticed that i've been trying to get back into shape, and with that i want to say a huge thank you to the sponsor of today's video Noom they're a digital health platform that helps empower you to focus on building healthy routines and habits since there's so much more to being healthy than just losing weight and dieting.

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Literally running out, here's what you need to know here in the united states we have a problem called social security that everyone begins paying into as soon as they begin working did, i say problem i meant program. This is a 12.4 tax on earned income up to 142 000 a year split equally between you and your employer. That goes into a big fund to social security. That eventually goes back to you when you're older.

The thinking is that, by mandating this as a tax, it should theoretically pay some or all of your expenses in retirement or in the event of a disability. But there's a problem in that the current system is paying out a lot more money than it's taking in. As a result, at the current rate, social security will run out of funds to pay the full benefit by 2034.. After that, it's said that social security will only be able to pay 78 in promised benefits to retirees and disabled beneficiaries.

That means by the time most of us are older if nothing changes, we're likely to receive only a fraction of the benefits that we paid in, because the system relies on future workers to pay off the cost of those before us and right now, there's just not Enough money kind of like a ponzi scheme except uh. Well, it's similar to a ponzi scheme, but it's not a ponzi scheme. I say that jokingly because technically it's an investment in our elderly to make sure they have a sustained benefit throughout retirement or if someone becomes disabled, they at least have something else to fall back on, while the us does not make any profit from this at all. But it sounds kind of like a ponzi scheme anyway, as it stands right now, there's really only three possible outcomes, as this runs out.

One congress could raise social security taxes to keep it funded a little bit longer, but this presents a problem of long-term sustainability because, as people live longer, more money is going to have to go into the system and because of that taxes will continually have to go Higher the two benefits could just be reduced, but that wouldn't be fair for everyone else, who's paid into it and now getting less than what they were promised or three. The government could just go into further debt to fund the deficit and then just let inflation eat away at the balance. I mean at this point: what's another trillion dollars, so i'm going to venture to say that the only real solution to this is to raise social security taxes and kick the problem a little bit further down the road until it's somebody else's problem. I can't ever imagine these benefits being reduced, because that would put financial strain on so many people, especially the disabled, who can't care for themselves financially.

That's why i think for everyone watching just assume two things expect the taxes are going to be going up over the next five years, because chances are, they will and expect that you're going gon na receive nothing from social security by the time you're older. That way, if you end up getting something, it's just a bonus but it'll never be something to rely on just in case something happens like the federal reserve, getting fired and raising interest rates. During a recent meeting, the federal reserve announced that they might begin to reduce their asset purchases by the end of the year as they begin to taper and let the economy run on its own. However, they've made it clear that they won't begin to explicitly raise interest rates until more progress has been made, although this would begin to set the expectation that it could be coming soon.

For instance, korea became the first bank to raise interest rates from a half a percent to three quarters of a percent which was the first rate hike in three years, and that was aimed at curbing inflation. A red-hot real estate market and high levels of household debt, and that sounds kind of familiar, doesn't it well for us in the united states, interest rates affect the value of pretty much everything that we do. If interest rates remain too low for too long, then inflation could be higher than expected. Asset prices could go through the roof, and the price of everyday items could get more and more expensive as more and more money enters the economy.

But if they raise interest rates too fast, then asset prices could drop, people could spend less money and that could hurt the economy. So this becomes a delicate balance to make sure our economy runs as smoothly as possible, and the value of the dollar remains intact. Without everything going to, although some people disagree and in a recent move, it was called for jerome powell to be fired and replaced as a way to reimagine a federal reserve focused on eliminating climate risk and advancing racial and economic justice. Part of this criticism blame the fed for weakening financial regulations enacted after the great recession, including capital and liquidity requirements, stress tests and the volcker rule by essentially allowing too much leverage to enter the markets without holding enough cash in reserves.

Now, without taking science objectively, the federal reserve's job is not to promote anything other than maintain monetary policy, financial stability and providing banking services, and as much as i would like to see, improvement for everyone and our environment, the federal reserve does not have the authority to Prioritize those practices, so in this sense, as much as i support the economic well-being of everyone and our environment, it's highly unlikely. The federal reserve would have any direct impact on that, at least without a substantial change from congress plus. This is all happening during a month. That's said to be the worst month in history for the stock market, otherwise known as the september effect.

That's because, according to investopedia since 1950, the dow jones has dropped an average of 0.8 in september and the s p 500 drops an average of half a percent. In fact, money chimp has a stock market calculator that averages the returns for each calendar month in history and, as you can see, september is indeed statistically the worst on record. Some say that this could be attributed to a behavioral change, as investors sell their stocks and otherwise cash in towards the end of the year. Others say that, because mutual funds have a fiscal year that ends in september, many of them would sell their losing positions for tax loss harvesting, thereby putting downward pressure on the market and some point to lower trading volumes throughout the summer.

As investors take time off. Go on vacation and then sell their positions afterwards, when they get back. Now it's important to mention that, because these are just averages, it doesn't always mean the market is going to drop every single september. In fact, 45 of the time the market goes up in september, but it does paint to a somewhat negative picture that overall for investors september, tends to not be the best month and lastly, speaking of all this money talk.

Remember that study that said that happiness plateaus at around 75 000 a year well yeah about that. A recent study found that happiness actually does not plateau and in fact you do get happier the more money you make. This study here analyzed a person's life, satisfaction and well-being, along with how much money they earned throughout a wide variety of incomes and people all the way up to a hundred million dollars and what they found was actually quite interesting. Even though seventy five thousand dollars provides.

The greatest bang for the buck in terms of life, satisfaction and well-being. Both factors increase as you make more money, albeit to a slower degree. For example, going from 25 000 to 75 000 a year gives you the same life satisfaction boost as going from 75 000 to 225 000 a year, and it would appear as though this metric continues throughout every single income threshold. Although, as you get into the larger numbers, it takes significantly more money to get that same boost.

Why does this matter? Well, it goes to show you that everything is in proportion to your own perspective. The important part here is that we spend our money wisely. We stay true to ourselves, we enjoy what we do and at the end of the day, even though more money could open up more possibilities at a certain point, we just have to take matters into our own hands and smash the like button for the youtube algorithm. Oh and one more thing: kathy wood just recently filed for a brand new, no vice etf, which shuns oil, gas, alcohol, bank and gambling stocks were basically all the fun stuff.

This arc fund would mimic the transparency index which tracks stock movements for around 100 companies, including the reputation and adoption of transparency standards. Now, in my opinion, this is not necessarily a bad thing and from what i've noticed amongst my fellow millennials. Most of us are going for healthier options, drinking less or nothing and putting some emphasis on sustainability. But it also seems like she's leaning into the millennial habits, to try to appeal to people who want to socially invest and if she wants to cater a group around.

Every interest i have no doubt there are going to be people who are very excited for this now long term. Who knows that these companies are going to be as profitable as the ones who use oil bank with the biggest banks, drink lots of alcohol and then gamble it all away on the meme, but for investors who want a new option? I say why not because the more the merrier so with that said, you guys thank you so much for watching. I really appreciate it as always make sure to destroy the like button. Subscribe button and notification bell also feel free to add me on instagram.

I posted 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, not posting here, so if you want to see a brand new video from 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 a thousand dollars, use the link down below in the description and use the code. Graham, when you sign up for public plus, i'm posting all of my stock trades on there. So if you want to be a part of it, the link is down below. Thank you so much for watching and until next time,.