Experts suggest the lost decade of investing has just begun, which means you might not see a positive return on your money for the next 10 years. Hi guys it's mark. So, during the pandemic, investing gained a lot of popularity, returns, went through the roof, and many people became conditioned to expect extremely high profits. However, now the bull market has ended and people are being awakened to the harsh truth that it's possible to lose money.

A lost decade is when the stock market is flat or even in decline for a period of more than 10 years. I mean it's demoralizing enough. Checking your investments every day for a week and seeing them go down consistently. Now.

Imagine that lasting for a whole 10 years. That's what could lay ahead! This isn't some crazy conspiracy theory. It's actually happened before i remember investing in the s. P 500, at the height of the dot-com bubble in the year 2000 and 10 years later, still not seeing any profits.

Well, of course, i didn't just invest one big chunk of money at the height of the bubble and completely stop. I was also investing as the market was falling, so, to put it more accurately, i did see a return, but not on the money that i invested at the height of the bubble that took a decade after seeing this once before. There are definitely signs that this is happening again, so we're going to be looking at the data from multiple different sources to determine how probable a lost decade of investing actually is. After we've talked about this potential evidence, one investor to another i'll, give you my thoughts on all of this and, most importantly, how you can best prepare for it.

First, we've got to discuss the looming threat of stagflation and no that's not a rapid increase in stag dudes. It's the growing concern that the economy will spiral out of control and potentially drag down your investments with it. If you were to ask an economist what stagflation is, they would say it's the combination of stagnation and inflation, oh and sometimes high unemployment. Now, if i'm honest, when experts talk about this, they make it sound far more complex than it needs to be.

So, let's break down the explanation in plain english, because it's important that we're aware of this threat as it could contribute to a lost decade of investing so the first part stagnation is defined as a period of little to no growth in an economy. We're talking less than two percent a year. I like to think of this, like one of those little lemonade stores. You know the ones those little entrepreneur, kids run.

Let's say in the first year the kid makes a hundred dollars, but the next year they only make 101. Although there was a small increase in the profit, the business is still stagnated, as it doesn't seem to be growing at any significant rate. When this happens to the economy, the natural result is people lose their jobs, as companies are forced to reduce costs by making cuts to their workforce. The second part, inflation is simply a decrease in purchasing power, meaning you can buy less with your money.

I mean one of my favorite: snacks is a little chocolate bar called a fredo frog. This used to cost around 10 cents. When i was in my 20s, whereas now they're about 30 cents, apiece inflation stole my other two freddos. So stagflation is the worst of both worlds, as the economy isn't growing and inflation is running amok before the 1970s.

This was thought to be impossible. This is because of something called the phillips curve, which was a well-respected concept in the 20th century. This states that inflation and unemployment have an inverse relationship, so that's a complicated way of saying that stagflation should never occur because high unemployment and high inflation were seen as complete opposites just think about it. If people have lost their jobs, they probably have less money to spend.

As you can imagine, this is bad enough, but with high inflation, every dollar people have is losing value by the day. So during stagflation they have less money, that's also worth less. It's like kicking someone when they're already down that was more of a punch dad well. This is a nightmare situation for policymakers and central banks, as they don't have all the tools they need to fix it.

I imagine them being in a room with many different levers that they can do lots of things with like changing interest rates and creating more money. However, they only have a certain amount of levers at their disposal. It's not like they can just pull a lever and produce more computer chips. This is because they don't have control over supply of our goods and services.

This is important as when supply is being suppressed by other factors like tensions between countries and kovid 19. They're just left twiddling their thumbs. If inflation is low-key, pretty formidable but manageable, then stagflation is thanos an unstoppable force. No one wants to encounter least of all us investors because it means a lost decade is far more likely.

So as we're already seeing high inflation. The question is what could possibly cause our economy to grind to a halt and stagnate at the same time, that brings us on to absurd valuations, which is something that could very possibly cause a stagnant economy. The last few years have been crazy, as the fed has been pumping 120 billion dollars of cash per month into the economy through its quantitative easing program. It also pledged to keep interest rates close to zero, allowing money to move freely to those people and businesses that needed it.

The most they were stuck in a pretty impossible situation, with a choice between artificially supporting the economy or making people suffer a pandemic and a financial crisis all at the same time, through no fault of their own. This led to 80 of all u.s dollars in existence. Being printed during the pandemic, that's a gigantic increase in the money supply and it still shocks me to this day. People were getting a lot of easy money, and this couple with increased excitement around stocks and crypto gave birth to momentum.

Investing i'm talking about the huge hype around investing in stocks like gamestop and amc and getting rich in a matter of a few weeks by driving the stock prices to the moon by its very nature, this means that the stock prices didn't reflect the true value of The companies anymore, as you can imagine all this excitement, created even more hype for investing. In fact, one in 10, gen z said gamestop inspired them to start investing the other nine people. Obviously, hadn't realized that you can get your investing journey kick-started with a free stock slice from public.com worth between three and a thousand dollars, if you're in the usa. I'll leave that link below.

If you'd like to pick that up just remember we're investing your capital is at risk. Investing apps, like this, have made it easier for the everyday person to get involved in the stock market and also interact with a community of other notable investors. Due to this newfound accessibility, this has probably contributed to stock market holdings now making up about half of the 109.2 trillion dollars of financial assets that households own. This is a good thing, as investing for the long term is crucial.

However, many new investors may have been conditioned by the pandemic to expect extremely high returns. Now that the fed has stopped pumping so much money into the economy and interest rates are rising, we're starting to see the consequences, it's kind of like everyone, was having an awesome party on the beach, but as the tide starts to retreat, we see who's actually swimming Naked, so it begs the question: by artificially accelerating the stock market: did we just bring forward the next years of gains? It's a bit like if you put a kid in a room with a huge chocolate cake and tell them not to eat it and in return they get reward. In this case, we may have just demolished the cake, meaning there's no reward waiting for us as we've already eaten it. The economy is controlled by supply and demand.

So it makes sense that if people have less access to easy money, then demand will decrease and company earnings will suffer driving down the stock prices. But on the other hand there is also extreme pressure on the supply of our goods and services. So as we're already seeing high inflation, the question is what could possibly cause our economy to grind to a halt and stagnate. At the same time, we need to address the rise in geopolitical risks that they're already having a huge impact on things like commodity prices.

I mean oil is currently skyrocketing in price. The world is so interconnected now, due to globalization. This means that when something like the russian ukraine conflict happens miles away, it has a real knock-on effect on the economy. The war has already caused russian and ukraine factories to stop production energy prices to go through the roof and even cargo planes to be outright cancelled over the area.

Economic sanctions have made it harder for traditional currencies to move freely, which has caused people to turn to crypto for its utility and decentralization. But the issue with purchasing crypto is the fees are often very high unless you're using the ftx app, where the fees are 85 lower than the top competitors. The best part is when you sign up using the code mark tilbury, you get free krypton. Every trade over 10 conflict puts global supply chains at even greater risk than the pandemic, and will have a much larger effect than not being able to grab some toilet paper.

When you need it, that's because the production of goods like platinum, aluminium and steel are getting impacted, which are essential parts in much larger supply chains like cars and computer chips. It's like the start of a huge domino chain. I mean russian people can't even grab a big mac anymore, as mcdonald's have made the executive decision to close all their stores in the area. We're in for a turbulent ride as tensions between countries are at an all-time high, and i'm not just talking about russia and ukraine.

The chinese leader, xi, jinping, is getting older and one of his main objectives has always been to reunite china with taiwan. It's actually written into their law that if taiwan tries to assert its independence from china, then if all the possibilities for a peaceful reunification are exhausted, then china is legally required to invade taiwan. The only thing standing in their way is the power of the u.s military. However, over the last couple of decades, china has grown significantly in strength.

Almost everything we use includes parts manufactured in china. Just imagine if all these supply chains were disrupted by a conflict, so supply and demand are in chaos. Company earnings are getting battered, which is in turn, causing investors to panic about a lost decade of stock market returns. I'm calling this panic.

The mass investor exodus people are losing hope in the stock market and all coins are struggling, which is leading to many people selling out of the markets. Completely investors generally split their money between stocks and bonds. However, if we experience stagflation due to all the factors we've discussed, then bonds actual returns will be negative because of the high inflation rate and as for stocks, the slow economic growth means lower earnings and therefore they will probably suffer as well. So how do we prepare for something like a lost decade? Well, i'm going to be completely honest.

You'll hear so many conflicting thoughts around this. During my research, i found that some experts were recommending a more active stock picking strategy as just buying and holding might not lead to high returns. After looking a little closer at the source, i found that they actually managed an investment advice firm. So therefore didn't make any money from index fund investors.

They just wanted people to trade for their own personal gain. It is very possible that we're in for a lost decade of investing. However, like i said i've been through this before and i've come out the other side, a lost decade is only really a lost decade. If you make one big investment and then stop last time, i just kept investing consistently every month, which then meant i was buying at lower and lower prices.

This gave me the opportunity to make a lot more money when the market inevitably recovered and all that's not even accounting for the dividends building up over time. In my opinion, the worst possible thing you could do is invest during the bull market and then completely stop or pull your money out of the markets when things get a little bit demoralizing. So although this sounds like a pretty scary time for investors, if you apply these proven long-term strategies, then it is possible to come out ahead and make a solid return during a lost decade. So i'm going to leave the next video right up there, but don't click on it just yet make sure to subscribe.

If you want to grow your wealth, okay, i'll see you over there.