Hi guys it's mark, so the stock market will crash. It's happened time and time again, it's a scary truth, but there's really nothing. We can do about it, but that doesn't mean we can't prepare ourselves to not only survive but thrive. During a crash, i've been investing for more than 30 years and, as you can imagine, during that time, i've experienced a lot of these crashes and i'm not just talking about when i used to race cars.

To be honest, investing is a little bit like motorsport. It can be a very bumpy ride. In fact, the s p 500 has seen a 10 drop 38 times since 1950, which works out to a minor crash every 1.8 years. During that time, i built my investments to over a million dollars, starting from nothing and whether three different major stock market crashes.

So today i thought it'd be a good idea to discuss the three stages of a crash, so you'll be able to outsmart other investors and hopefully make some money while you're smashing that, like button for the l2 yoga ribbon, let me just remind you that this video Is based on my own personal experience and it shouldn't be taken as financial advice right all done, fantastic, let's jump into it number one, the honeymoon phase just think about when someone you know got married. They were probably totally obsessed with each other, as everything was just so new and so exciting during this time, it's extremely hard to see what could ever go wrong, and, let's be honest, you probably wouldn't want to think about the negatives anyway. This is very similar to the stock market. When i start seeing this blind happiness, i prepare my investments for when everything comes crashing back to reality, and if my wise fortune is i'm talking about others, of course, not you, my love before the 2008 financial crisis.

There were a couple of things that i noticed that really made me cautious about the future. First was the booming consumer spending, everyone had money, they were spending thousands and the economy was thriving, so thriving to the point. I could have probably sold a house brick to a customer in my shop and claimed it was the latest tech gadget. Okay, maybe i'm exaggerating, but the point is people were buying, so many unnecessary items as money was burning, a hole in their pockets.

The current nft crate seems very similar to this. Never in a million years would i have thought people would be buying jpeg image files for millions of dollars. Don't get me wrong? I am very interested in the nft space, but i do think prices are extremely inflated. Maybe i'll get in once everything dies down a bit.

The second thing i noticed in 2008 was the increase in the number of people buying houses or refinancing. This is because it was easier than ever to get credit as the housing market was booming, which meant if people were unable to pay off their mortgages, then the banks would just take back their properties without losing any money. I think the banks and regulators have learnt from their mistakes in 2008, as it's now much harder to take out these kinds of loans, but interest rates are pretty low. Currently, which means lots of people will be refinancing now.

It's one thing noticing these little clues, but it's another thing actually taking action and preparing yourself between 2007 and 8, i could have just gone along with the crowd, as the general herd mentality was that everything was great and nothing would ever go wrong, but instead i Started to prepare my investments for the worst at the time, lots of my friends and fellow business owners didn't quite understand the decisions i was making. They may have even seen me as a bit of a coward, but from my perspective i didn't think they understood just how much risk they were taking. So if your spidey senses start tingling, these are some of the things you can do to prepare yourself for the worst first, i would evaluate and minimize your risk level, wherever possible. Personally, i'm not focused on chasing crazy high returns as that's unsustainable for the long term.

I just want to be making small gains consistently, so my money compounds, i always think about the story of the tortoise and the hare. I know it might sound boring, especially coming from a boomer like me, but slow and steady does win the race if you're new, to investing there's a high chance that you haven't experienced a real market crash, it can be horrifying to see your portfolio completely halving in Value and sitting deep in the red for a brief period of time, so you have to ask yourself if you can mentally handle this type of drop without selling all your investments. Secondly, i would start to reduce my leverage now. On one hand, leverage is a great way to accelerate wealth, but it can also be very dangerous.

In 2007, i'd borrowed money from the banks to purchase rental properties and in a perfect world the tenants would just pay off the mortgages over many years. However, nothing is ever as easy as it sounds, so i made it a priority to pay down those debts to a reasonable level. Just in case mark stay on topic. You were talking about the stock market and not real estate dislike okay, i hear you very cool and handsome hater leverage is used a lot in the stock market too, and it's called margin which is essentially investing with money that isn't yours now.

This is a great idea if you buy stocks that are rocketing in value as you'll be making so much profit. You've got nothing to worry about, but the issue here is you never know which way a stock is going in the short term. If a stock crashed too far, your investing app may issue a margin call, which means you have a limited amount of time to pay off your debt. And if you don't, your brokerage may sell your stocks at the bottom of the market to recover the money you borrowed.

If this is something you're considering or even doing, then, if i were you, i would be paying some of this debt off. I never use margin and that's a personal choice and i'm well aware by not taking the risk i'm missing out on some potential profits. The truth is i've. Seen too many of my friends go from millionaire status to broke in a blink of an eye, and now i just stay well clear of it.

Thirdly, i would start saving some extra cash in a high interest. Savings account, i know, always bang on about having an emergency fund of three to five months of your living expenses, but i'm talking about saving even more cash. I did this between 2007 and 8 and from the outside it looked a bit strange. The market was booming and by leaving my money in the bank, i wasn't taking advantage of it.

However, i didn't take this decision lightly. I'll talk more about this when we get on to the next stage, i actually remember the exact moment. I chose to slow down my investments and start holding more cash. It was when my hairdresser started asking me what stocks i was investing in when everyone starts getting comfortable with the idea of investing.

It can be a sign that a bubble is forming. The trouble is at the first sign of a crash lots of people panic sell, which drives the prices down even further, leading to a spiral of doom. Finally, i would make sure my investments were properly spread out. This is called diversification and it's one of the best ways to help withstand a market crash, as quite simply put you haven't, got all your eggs in one basket.

This is all because you never know what sector is going to be hit the hardest. I mean who would have thought restaurants would have been a poor investment as everyone needs to eat, but the pandemic shocked all of us by forcing them to close for months on end during good times. It can be very common for people to do very well with one or maybe two stocks and end up with most of their money focused in only a couple of different companies. Even if they start out with lots of different stocks, it can almost seem silly to put all your money into other things when one stock outperforms all the others, let's use some of my favorite stocks.

As an example say you have a thousand dollars to invest. Now you could put the entire 1k into tesla, with the hopes of it going to the moon, but if tesla gets hit the hardest in a market crash, it won't be good news for your money, whereas investing 250 into tesla 250 into mcdonald's 250 into square and 250 into end phase would be a great diversification, as you're invested in multiple different industries. That's also why index funds are so popular as they spread your investments over lots and lots of different stocks. If you don't currently have an easy way to invest with low fees, then i recommend checking out public.com if you're in the usa and they are currently giving away a free stock worth all the way up to a thousand dollars i'll drop.

The link in the description, also free trade, is a great option if you're in the uk and they're giving away a free stock worth up to 200 pounds with the link in the description you may have heard me mention these apps before, but honestly they are so Easy to use and the sign up bonuses are just so good. It makes sense to take advantage of them number two, the awakening phase. I like to call it this because everyone gets rudely awakened to the truth and only the ones that know how to navigate it. Will be able to hold their nerve and make some real money? This is kind of like when a married couple finds out about an affair.

It brings that whole world crashing down. What i'm really trying to get at is the stock market just comes tumbling down, and it's next to impossible to be unaffected. Even my son knew something was happening back in 2008 and he was only 10 years old at the time. The number of customers in my stores halved overnight and even when they did come in, they didn't spend anything on the bright side.

I had lots of products which i owned in my warehouse and it was absolutely full. It was like a safety blanket, but this wasn't. The case for everyone, as even if they had products to sell they had to get rid of them fast to pay their rapidly growing credit bills and rents. But why am i mentioning this? Well, in 2008, i saw dollar stores opening up everywhere.

It was the perfect mixture of demand for cheap goods and supplier products from failing businesses, because of this dollar stores are often unsustainable, as they're acquiring stock from struggling businesses desperate for the cash and then passing these savings on to their customers. It's important to know this. As the stock market goes through cycles and another market crash is very likely at some point, but that's all right, as there is money to be made in all the madness, even if you manage to predict all the signs of a crash and prepare correctly. This is where you are really tested.

It's more about human psychology, as most people's initial reaction is to sell off all their investments and cut their losses. But fear is the path to the dark side. Young jedi fear leads to anger, anger leads to hate and hate leads to suffering. Honestly master yoda couldn't be more correct.

The people that give in and sell their investments are usually the ones that just think the stock market is not for them or the game is just rigged. If you believe in your investments, then you have to hold firm. I like to remember the wise words of gandalf. You will not sell well, that's the way i like to remember it.

A study by fidelity actually found that if you invested ten thousand dollars between the first of january 1980 and the 31st of march 2020, and if you kept all your money invested, you would have over 697 thousand dollars. But if you decided to sell your investments and ended up missing the five best trading days, then you'd only have four hundred and thirty two thousand dollars. The crazy thing is that missing 50 of the best trading days brings you all the way down to 48 000. So you might think you're being smart by time in the market, but in the long run, you're probably only going to hurt your own profits, but there is a lot more to it than just holding firm.

If you believe in your stocks, long term in 2008, i saw what the dollar stores were doing and instead of seeing a competitor, i saw an opportunity. If they could buy things for bargain prices, then it must mean there were amazing deals available. So i went out hunting. I went on a bit of a buying spree over the next couple of years and acquired lots of different assets, including stocks and even entire businesses.

I knew that i'd be unable to time the exact bottom of the market, so i invested every week. This is called dollar cost averaging cash is really king. If you have it, then you can snap up some amazing investments during this time. The bottom line here is that, while some choose to panic, sell and lose all their money, others choose to double down and buy the dip which, if done correctly, can make you a fortune buy the dip baby.

I feel i have to mention that some investors also like to short stocks, which is basically betting, that a stock will go down. It's not something i personally do. However, people like michael barry, have been very successful with this strategy. If you want to know more about this, then let me know in the comments.

I also recommend the big short if you feel like watching an entertaining and informative film number three, the resurgence phase after weathering the storm we get to the resurgence phase and this usually pushes above and beyond the last market, highs. Think of this, like a married couple, renewing their vows, they come back even stronger than before. I noticed that four years after the 2008 crisis happened just after the london olympics, things started to improve, businesses were hiring and money was a bit easier to come by, but even though people started to have cash again, the mentality of not spending carried through for a While so, it was another four years really until everything was back to normal. I've experienced a lot of crashes, i'm talking black monday, the dot-com bubble, the 2008 financial crisis and, of course, the 2020 pandemic.

One of the key lessons i took from all of this was that a bull market almost always follows a bear market and that the seeds of your fortune are very often sown in times of crisis and uncertainty. As long as you are able to handle your level of risk and you're buying into the stock market consistently with a diversified portfolio, then you stand a much better chance than most of making some real money. So i'm going to leave the next video right up here, but don't click on it just yet make sure to subscribe to the channel. If you want to grow your wealth and don't forget to pick up your free stocks and bitcoin with the links below okay i'll see you over there.

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