Hey guys, it's Sasha Is it time to stop investing right now? Wall Street is panicking. Interest rates are here to stay higher for longer, the housing market is on the edge, the corporate property Deb bubble is about to exploit more. Regional Banks might collapse, and the stock market is massively overvalued when you look at the Buffett indicator or the shil. PE Ratio The S&P 500 has just fallen 5.3% in September and Michael Barry Just bet $1.6 billion that the stock market will crash and you should take people like Michael Barry very seriously because he has perfectly predicted all 69 of the last three stock market crashes.

But here is the thing. None of the things that I just mentioned should stop you investing in the stock market because all of those things are noise and data that shouts loudly but predicts nothing the moment that you think you know exactly what's going to happen to the stock market. you have already lost the game and you were there thinking that you are smart. You are smarter than everybody else trying to time the market like all the other losers with a gambling addiction.

But there are some reasons though why you might want to stop investing in stocks right now. Some real reasons that you should actually think about: because a once in a generation inflation spiral does not come around all that often, and neither does the first time in history when interest rates went from 0 to over 5% in the space of a year and a half. So we have ourselves a pretty unique situation. and sometimes in a unique situation.

The one size fits all strategy is not the best choice. So let's talk about a few reasons why you might want to stop investing right now. now. If like me, you don't want to stop investing all power to you, go ahead and click that link in my description to open up your Weeble account.

Deposit some money by a stock and you can get four free shares worth up to $2,000 each. Thank you Weeble for sponsoring this video now! Weeble Let's say bu fractional share starting from just $5 He here I bought $25 worth of Tesla stock which got me one10 of a share. And if you like data, the Weeble app gives you all the data you might want. Just hit this quotes thing down here and you've got charts you can make it, candlesticks if you like.

You can zoom in and out as much as you want. It's super easy. You've got all the news about the companies right in here in the same feed you can check out with the analyst think and you can even read the quarterly results and the SEC filings all within the app. If you want to try out Weeble they will give you four free shares worth up to $2,000 each with a minimum amount being $5 each.

To get this deal, use my link in the description or in the pinned comment. So let's talk about mortgages and I know I know I am probably the last guy you expect to talk about this because I am that guy who invests money while having no emergency fund and I am also that guy who never tries to time the market and I don't ever hold cash. But if you have a mortgage, you suddenly have a somewhat compelling alternative to investing in the UK Most people have fixed mortgages 2 to 5 years, so everyone is now seeing their interest rates Skyrocket When the fixed terms end. For many people, that means that your monthly mortgage payment will increase by around 50 to 100% And That in itself is a bit of a problem because the average family in the UK pays around onethird of their take-home pay for their mortgage or rent in the south.

It's a lot more than that. So if that 1/3 suddenly doubles, it becomes 2/3 If you have an average mortgage of let's say 200,000 for 20 years and you took it out three years ago, you probably on a rate of something like 1.5% maybe a bit lower, maybe a little bit higher when the fixed rate is up the Standard Bank rate if you do nothing. The Standard Bank rate is now at 8% but let's say that you can remortgage and then let's assume that you can get one of the best rates possible possible at the moment, which is around 5% This probably will be higher in a few months. This is the best possible scenario and even in this scenario, your monthly payment would still go up by 40% So if you're in that position, you're probably not going to do very much investing anyway because your budget is nuked and your finances are completely.

But aside from that, if your new mortgage rate is 6 or 7% or whatever, then you have an interesting dilemma. Now your house is not an investment, but if you have a mortgage, every pound that you pay into your mortgage gets a guaranteed rate of return of 6 or 7% That's the interest rate because you will have one or less pound costing you that much in interest every month. And yes, the stock market over the long term does get 9 or 10% return on average which is more but on average can mean that it will get you nothing and trade sideways for a few years. and maybe all the Doom and Gloom salesman are right and we will have a huge crash next year or the year after.

or whatever. the money that you put putting into the stock market right now is not guaranteed to make you anything and right now it could really go any which way. So you have this dilemma: you can keep sticking your money into the stock market with that 10% average return which could net plus 30% in a good year if next year is one of them or it could just as well be minus 30% or you can stick it in being boring and making mortgage over a payments and you will get a guaranteed 7% return instead. If you live in the US or your mortgage is not up renewal for a while, you've got to think are you likely to need to move? For example, maybe in a year's time, because if you do have to move, your new mortgage at that point is probably going to be a heck of a lot more expensive.

So even if you are on a low rate right now, there is an argument that paying off your mortgage now, despite it being on a low rate, will save you that bucket load of Interest whenever your fixed term runs out or when you have to move and get that new mortgage on a much higher rate. And not only will you save on interest, but it might also be the difference between being able to actually afford the new monthly payments in the first place. The obvious downside to paying off your mortgage is that money sitting in your property is il liquid. If you suddenly need cash tomorrow, because you know happens, you lose your job.

Whatever, you can't just go and withdraw a few thousand out of your home. Selling stocks during a market crash could be painful if you're down in particular, but at least you can get money into your bank account that same week if you really need it. and even more important than your mortgage is credit. If you have any credit cards carrying a balance, loans that need refinancing any other kind of credit, you should probably have a big think about paying that credit off instead of investing Credit Card balances fell in 2020 when people used their stimy checks to pay off debt.

People stayed at home so they didn't need to spend very much money. But credit card balances are now growing again and are at an all-time high of over $1 trillion. The average credit card interest rate has gone up from 16 % last year to over 22% after the FED increased interest rates. If you have any credit that costs 22% say you really need to get rid of it because that is seriously expensive.

If you have any credit cards where you're paying 16% or 18% or 24% or whatever, paying off those cards gets you a much higher return than the stock market average. and that return is guaranteed every dollar that you pay off your debt. That is costing you 16 r % because that's what credit cards charge stops you having to pay that interest. And what's even more important is that clearing debt means that your monthly debt repayments go down.

and it has probably never been more important to cut down monthly bills than during the biggest cost of Living crisis in a generation now. You might be sitting there feeling mug because you have a credit card deal on a Z% You are smart, You keep shifting those balances around and you're just going to go and switch it at the end of that 0% to another 0% balanced transfer deal. Well, one problem with the economy tanking is that 0% Balan transfer deals disappear and they have been disappearing and a lot more may disappear soon. You might not be able to go and get one.

Nobody cares if you have a Bazilian credit score. When the economy is crashing when interest rates go up, so does the cost of funds for credit card companies. When people can't afford to pay their bills, even people who used to be able to easily do it, credit card companies start taking losses and being a lot more careful. So you might be sitting there on a 0% deal today, but you might not be able to refinance it tomorrow and have to pay whatever the standard rate is on your card and the standard rate on your card is going to be expensive.

If you own your own business, then the same applies to business debt business. Debt is often priced as a Tracker above the Fed rate or the bank of England rate or whatever. So if you've got one of those that tracks say 4% above, you're paying pretty much 10% interest on that debt right now. So if you you're choosing whether to invest, you can invest and maybe get a 10% return from the stock market.

Or you could be boring as and pay off your business loan and get a guaranteed 10% return right away. Sometimes a bird in the hand is really worth to in the bush if you're sitting on the fence and you're just not sure should you invest. Should you not invest? Remember that locking your money in Investments does have some other downsides, especially if there is a risk that you will need it soon. Aside from the big risk of your Investments going down in value which might happen if things crash, you also have to pay fees, fees to put money in, and then more fees to get the money back out.

But there's one thing that's even worse than fees. and that's taxes in the US. If you sell your Investments within 12 months of buying them, you will have to pay a boatload of short-term capital gains tax that is taxed at your top income tax rate. And it's not the worst problem in the world Because you know to pay capital gains tax, you actually need to have capital gains so you own pay the tax if your Investments actually made a load of return.

But paying down your credit card and getting a 22% return on your money doesn't come with any tax at all. And here is an interesting conundrum for you. Let's say that the economy crashes. Something happens, like the corporate real estate bubble finally blows up some more Banks collapse because they hold way too much of that stuff.

If that spills into a general financial crash, you will see the FED moving those rates right back down to zero the very next morning. And at that point, all the points about cost of credit, the cost of your mortgage payments. The mortgage interest rates will disappear, but this would probably also trigger a sharp recession. And the stock market is not a fan of recession.

So although companies would probably actually benefit in the medium term, you know what from lower inflation, less pressure on their staff, wages, lower interest rates, the stock market will probably dive at the same time, and the stock market can suffer if the opposite happen happens too. If we do see higher interest rates for longer as the FED keeps saying, bonds will keep on printing those high yields. And in a world where your 2-year treasuries are printing 5% and even the 10year bonds give you 4.5% investing in the stock market becomes less attractive to some elements of the overall investing Community than it was when those rates were much closer to zero. So you have quite a lot to think about.

Remember to go and check out Weeble and get your four free shares if you're in the UK. If you're in the US, there is a separate promotion from other free shares check that link in the description. Thank you for watching and I'll see you later.