This is weird, my account must be broken or something uh. I'm gon na call my financial advisor and ask what's up yeah, hey, graham well, there are two easy things you can do. The first thing you could do is you could just go over here and make green candles be the down on weeble, or you can always sign up link down below for the stocks and psych all right. So, let's face it, no matter what deep down we're all looking to inch out a little bit more profit from the market, whether that be buying individual stocks, investing in real estate going all in cryptocurrency or collecting board ape nfts for 300 000.

But there's a problem. The vast majority of people fail miserably, they lose money long term, and then they have to cancel their deposit on the upcoming tesla roadster. Thankfully, though, there is some good news in my never-ending quest to analyze various investment strategies, i found something that has a high likelihood of giving you a surprisingly consistent return each and every year, regardless of how good or how bad the market does in the short term. Not to mention since the holidays are around the corner.

We have to address the truth about the so-called santa claus rally where stocks miraculously seem to increase at the end of the year where people take time off they're in a good mood. They get year-end bonuses, they spend money excessively and they watch youtube videos about the best way to invest their money at the end of the year like this one. So, let's talk about if a santa claus rally is actually something that you could profit from how you could invest in order to make money, regardless of what the market does and why this one strategy works so well, even when everything else doesn't. But before we start, i have to share a quick message from our puppy bailey she's, gotten really good at doing a good girl sit when she wants something and right now all she wants is for you to smash the like button for the youtube algorithm.

That's it and in return she promises to continue to be a good girl and not poop inside the house when we're not looking. So thank you guys so much now with that said, let's begin alright. So, to start no surprise beating the market long term is nearly impossible, even though it seems like it would be fairly easy to pay attention to current events buy when the market's fearful and sell when sofa hits 25. The odds are pretty bad.

In fact, you might be shocked to hear that 90 percent of actively managed funds failed to outperform just a regular s, p 500 index fund over a 15 year period, and this is nothing new. For example, kathy wood saw a record year for her arc fund in 2020, with winner after winner beating out everything else, but in 2021 the s p 500 prevailed yet again with a 28 gain, while she lost 23. This is not just unique to kathy would either even some of the best funds that do wind up, beating the market often lead to investors losing money, and a perfect example of this is what's called the magellan fund. This is the world's best known mutual fund and it's all record-setting growth under the management of peter lynch from 1977 to 1990..

In fact, until the year 2000, it was the single largest mutual fund in the world before it was overtaken by vanguard, but despite their incredible success, having outperformed the entire market by a long shot for over 15 years, it was reported that the average investor lost money Under peter lynch's tenure, during a time where the fund returned about 29 annually, so how well, during those years it experienced times of explosive growth and devastating losses. So when investors bought in during the excitement and then sold as soon as it began going down, they locked in their losses and missed out on the subsequent growth, had they just held and done nothing. The problem tends to be that if we look at funding flows, meaning how much investors are buying in most investment entries, once it's already outperformed the market causing the fund to buy more of those underlying companies causing the price to go up as a result. But as soon as they underperform investors sell off the fund causing the fund to have to sell off their shares, causing selling pressure on the shares and causing the price to go down, it basically becomes like the self-fulfilling prophecy where people buy into a fund, because it's Going up which causes it to go up and then the opposite happens during a decline.

Now, even though this sounds like a case of don't time the markets, the market eventually wins, and today the vanguard s, p 500 index fund has come out victorious yet again further proving that long term, almost no one can consistently win. So if 95 of investors can't beat the markets, you're, probably thinking to yourself, but graham, if it's impossible, then what's the investment strategy you're rambling about that, does well, no matter what and that's what brings us to what's called the all-weather portfolio, as you would expect, the Name suggests it could handle all weather from good days bad days, great days and horrible days, meaning instead of turning your account into a roller coaster of 2 swing, emotions, you're, ghosting, constantly free of worry and, most importantly, making money. Now. The reason i bring this up is because, during a time where people are worried about a market bubble or an impending crash, a rising inflation or billionaire selling off their stock in record numbers, it's important that you pick a strategy.

That's best suited to what you're able to handle - and this is quite interesting. It was created by the doom predictor himself ray dalio, who, on the surface, seems to predict the new impending disaster every few months. His latest is that a decline will uphend lives, not just portfolios, and even though a broken clock is still right twice a day, he's designed a portfolio that was created to withstand a nuclear blast while still being profitable. His theory is that we have four major cycles throughout our economy: rising prices with inflation, falling prices with deflation, rising growth, with bull markets and falling growth with bear markets, and in each of these four quadrants there's a best performing asset that can be used to keep A portfolio in the green in this case it's a mixture of stocks, equities bonds and commodities equities perform the best when the market goes up.

Commodities perform the best when inflation goes up and bonds perform well when everything else goes down now, since something like high growth is a lot more common throughout history than high inflation, each category is weighted slightly differently to take advantage of the situation. That would be most likely to happen, which is scientifically put that stonks just keep going up, but in terms of this allocation, it's broken down into 30 equities like vti 55 fixed income, including tlt and iei, and 15 commodities, including gold and a commodities index fund. So, if you're curious about how something like this is performed, here's where it gets interesting, or at least interesting for me because uh i don't know why i find this stuff fun. But here you go! Here's what i found anyway.

The evidence investor website shows a graph that the all-weather portfolio has actually outperformed the s p 500 by nearly 50 since 2006, but that's not all because it was meant to last through all weather and jerome powell. Scaring the markets. Volatility was nearly non-existent or in other words instead of seeing a huge price increase or decrease it just kind of cruised to long as normal. For example, in 2009, when the s p 500 dropped, 50 percent, the all-weather portfolio only dropped 17 percent.

It also declined half as much as the 60 40 split between stocks and bonds, which is most frequently used by very conservative investors who want to preserve their wealth. So if it's performed so well and has almost no volatility whatsoever, why aren't more people using it and what's the catch? Well, i'm glad. I asked myself that question because nothing is perfect. Besides the free stock you can get down below in the description.

That's worth all the way up to a thousand dollars when you sign up for public and long term, the all-weather portfolio might not be as good as you would think. Unfortunately, with any fund, it's easy to selectively choose dates that work to fit a specific narrative like conveniently starting the all-weather portfolio at the height of the market in 2006, right before everything crashed down. But had you gone back to the very beginning in the 1970s, you would have seen that it actually underperformed the s p 500 by over 30 percent, and if you look at it more recently with interest rates as low as they are, it's underperformed by 50. Now sure some people might think that 30 over 40 years isn't that big of a deal and until 2015 you would have seen the exact same return as the overall market had you started in 1970, but as our economy changes, it appears that two things are getting In the way, first, for the last 40 years, bond yields have pretty much done nothing but go down for those unaware.

A bond is basically no different from an iou where you lend a city state or government money, and in return they pay you back with interest. However, with interest rates constantly, declining bond yields have gone down to record lows, meaning you, as the investor are making less money, especially when half of your portfolio is comprised of something that could barely keep pace with inflation. The second, also for the last 40 years, gold has not held up to the s p 500.. On top of that, more recent information found that gold is not an accurate hedge against inflation, except extreme inflation and hyperinflation, where any storable assets is a hedge and from 1980 to 2010.

Gold was a break even despite inflation, increasing each and every year. So, even though gold has worked through very selective dates, it's failed the long-term test of truly being impenetrable from disaster. However, there is one exception to this. That recently is done quite well, and that would be the all-weather portfolio with bitcoin.

Now, even though we don't have as much data about a portfolio like this, since bitcoin is relatively new compared to something like gold, just a two percent allocation to bitcoin has been shown to increase your overall annualized return to 16.37 percent, meaning just a little bitcoin has Gone a long way by boosting your portfolio's return by a lot even ray dalio says that he has some bitcoin and that there are certain assets you want to own to diversify the portfolio and bitcoin is something like a digital gold. Of course. He also believes that the government is not going to tolerate it, but until now you can't deny that bitcoin has boosted the returns by a significant amount. So all of that is to say that, even though gold and bonds have slowed down the all-weather portfolio over the last 30 years, a small allocation to bitcoin might have been enough to make up for it.

Although in terms of my overall thoughts in terms of whether or not this is actually worth it, here's what i think for anybody who hates watching their portfolio go town in value. The all-weather portfolio helps, but over the last 40 years, you're paying the price for an account that doesn't drop as much as everything else. It's kind of like saying: hey, pay me 30 percent of your portfolio and in return i'll make sure your portfolio doesn't even drop more than 10 percent at the very most. Would you do it well, probably not for 30 percent, so in most cases you're better off.

Just sticking with the broad market, like the s, p, 500 and then just never looking at your account ever, especially if you're worried about ending up like peter lynch's investors who lost money, you're sure in the short term, you're going to see a lot more fluctuation. But as long as you don't need the money for the next 20 years, the best thing you could do is honestly just never check your account and keep buying. I mean it. No fomo buying no panic selling, no checking your accounts five times a day to see.

What's happened, none of it, but speaking of checking your account, even though the market's been down. We can't make a video about this without mentioning what so many people are calling for very soon, and that would be the santa claus rally. Oh, by the way, if you guys are interested in hearing more stories like this feel free to download my app the hungry bull down below in the description, it's a daily newsletter where we scour the internet and find the best stories that help make you money. So again, if you want to be a part of it, the link is down below and it's totally free, like remember when we've talked about the september effect, which historically has been the worst month on record for the stock market since 1950.

Well, had you listened to that this year, you would have seen it coming when the s p 500 posted a loss of 4.76, but there's also the opposite of that known as the santa claus rally. This refers to the occurrence where, in the last week of december, the stock market rallies boosted by happy people, year-end bonuses and excessive spending. In fact, since 1950 december has been on average, one of the highest returning months of the stock market averaging a 1.39 return right. After november, which this year has posted a 6.91 gain not to mention since 1969, the market has been up the last week of december 75 of the time.

This also leads into what some investors call the january effect, which occurs when investors make their initial purchases. At the beginning of the year after selling off losing positions in december for tax loss harvesting, when it comes to this january, has historically seen a nearly one percent increase in the s p, 500 and 65 of the time. This has proven true, however, even though having a 65 to 75 chance of something happening is really enticing. It's actually not as good as you might expect.

If you invest in the s p 500, since 1950, there have only been 15 times where the markets closed lower. At the end of the year, meaning you have a 75 chance of making money. If all you do is dump everything into the s p 500 on january 1st of every year and then do nothing. But all of that is to say that, even though there's a strong chance that the market's gon na do well the last week of december and into january there's an even bigger chance that year over year, the market's going to be up.

So the sooner you tend to invest the better, not financial advice. Of course, only time is going to tell how well this age is, and maybe we're in the 25 chance that santa claus never comes this year, but regardless year over year, you have a good chance at making money. If all you do is buy in don't panic sell and keep smashing the like button for the youtube algorithm. So with that said, you guys thank you so much for watching also make sure to subscribe, hit.

The notification bell feel free to add me on instagram and on my second channel, the graham stefan show i post there every single day. I'm 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, don't forget to get your free stock down below in the description. It's worth all the way up to a thousand dollars when you sign up for public and use the good gram, that's it.

You can also buy and sell cryptocurrency on there. So i'd highly recommend it and i'm posting all of my own stock trades on there so feel free to be a part of it. Thank you guys so much for watching and until next time.