원문 보기
Hello everyone, I'm Kevin. In this video, I'm going to offer some suggestions for overcoming the pain caused by this recession and the market crash , because friends, this is the thing. There is no doubt about it, our markets are in a correction. The S&P 500 has just entered a correction zone, falling 22% in a year.
The situation worsened. Nasdaq Technology shares are down 31.23% for the year. Tesla fell 44% and Apple fell 27% . Speculative assets, IPOs, crypto, Robinhood, Coinbase, etc., all fell 60 to 80% . Friends, if you are losing in this market, we are all losing now . I have lost a lot and it is very painful.
For example, Tesla lost $400 million on their Bitcoin investment alone, and Elon Musk is no longer in the $200 billion club. He lost that status . Square lost about 42 million on crypto. MicroStrategy lost about 1.1 billion on crypto. At the same time, 30- year mortgage interest rates in America, the only sector that made us think, " Well, at least real estate hasn't crashed yet, " is also poised to crash.
In particular, the 30- year mortgage interest rate chart is now at 5.87%, meaning those who qualify and get pre-approved are probably getting between 6.2 to 6.5% . Friends, this is almost 4% more than it was in December . So, how are consumers responding ? They are taking on more debt . Consumer debt has risen to the highest levels we've seen since we started tracking consumer debt in the late 80s.
The last 2 months have been devastating . Total revolving credit has never increased as much as it has in the last 2 months . And we have an average of 25% more margin debt now than we did 2 years ago . At the same time, our personal savings rate has fallen to 2008 levels. We are now saving less than 5% of our income , so it's no wonder that interest rates on everything from credit cards to student loans, home loans, and car loans are skyrocketing and everyone is feeling the pain.
Look at this. Here is a chart of those with six-figure incomes in the United States. If they are struggling , we know that those with lower incomes are also suffering . Six in 10, or 63% of millennials earning between $100,000 and $150,000 a year, now report living paycheck to paycheck. This sounds crazy.
A six-figure income was once considered respectable , but now six out of 10 millennials are living on a salary, even with this income . And it's not just them. Even 49 to 55 percent of millennials earning more than $150,000 a year say they spend as much as they earn. Even among boomers who have been earning six-figure salaries for decades, one in four or one in five are living on their paycheck .
If you look at the bottom 20 percent of people who earn the least , they have less money now than they did in 2019 . Friends, this chart here is from December 2021. That means this was before we saw five or six months of stock market crashes and extreme inflation . The bottom 80 percent of Americans have only slightly more cash than they did in 2019 .
Since these calculations were made in December 2021 , we can assume that that extra cash has now been almost spent . So, it's no surprise that consumer sentiment has now fallen to its most negative level since 2008 . There are more people who are negative than positive about the economic and future situation .
Yes, the situation has completely changed. The consumer sentiment survey now shows more negativity than positivity. However, how can we not feel negative when faced with a 40-year high inflation rate, food and fuel shortages due to the Ukraine crisis, and China aggressively flying over Taiwan and intimidating Canadian aircraft ?
There is concern that Putin's war will also push other countries towards nuclear weapons and aggression. So, where should we go to find out if our situation is not good ? We can look at the Gross Domestic Product (GDP) estimates. GDP projections are now close to zero percent, meaning our economy has stalled .
Yield curves are inverting again , suggesting that the bond market is headed for a recession next year . To be honest , we may already be in a recession. And the massive inflation is no surprise, because we have printed $5 trillion since the pandemic began . That's 30 percent of our money in circulation.
To be honest , the reason the pandemic downturn was so short- lived was because we had a big money printing machine to help us then, but we do n't have that now. So, it's no surprise when retail stores report that their inventory levels have increased dramatically, with Crocs reporting 130% more inventory than the 3-year average, Amazon reporting 77% more, Target reporting 61% more, and Home Depot reporting 53% more inventory .
Because people decided not to spend because they didn't have money . That's why buying patterns also slowed down when the market fell . Retail investments into the stock market have finally started to decline . The question now is, will the stock market bottom out by the time retail investors say enough is enough ?
Now is the time to bow your head . Okay, where are people making money now ? In fact, the people who are making money now are the ones who are shorting the market . SQQQ, a Nasdaq triple short, rose 122%. The short ARKK ETF, SRK, has made more profit in the last 7 months than the Cathy Woods ARKK Fund has made in the last 5 years.
The Big 5 has a short interest ratio of 44.8%, Camping World is short at 43.9%, and Bed Bath & Beyond is short at about 30% . Investors are realizing that the days of spending are over . But, the last area where people are still spending is where we don't have the capacity to withstand it. Air travel.
We don't have enough air traffic controllers . We do n't have enough pilots. We don't even have enough planes to serve all the people who want to travel . So, really, again, put a peg down every time I say "not surprised," but it's not surprising that airfares in April increased by 18% in one month (that's more than 200% annual inflation), and then another 12% in May.
That's crazy. At some point, even wealthy consumers may run out of money, or may not want to spend , especially if the real estate market cracks as we expect. With real estate rates now up four percentage points, I think the real estate market is going to undergo a correction, just as I expected . And if the real estate market falls 20 to 30% , we expect people to spend even less , especially on construction and places like Home Depot, Lowe's, and on travel.
Because some of the richest people in America are landowners. This is one of the best ways to build your wealth . In fact, friends, that's why I have a program on how to build your wealth by investing in real estate . You can become a millionaire by investing in real estate , and now we have a great opportunity coming our way due to the market crash.
That's why I recommend you definitely check out the links below for programs that will grow your wealth , especially that ' . However, here are some free suggestions I have for you , which are not financial advice, but I want to help you become a survivor . So, the first step is, I strongly recommend that you subscribe to our channel .
Stay updated with the latest market news, when I notice changes happening in the market , I will let you know about them . This doesn't mean you have to change your portfolio every day , but it does mean you can know what's happening before the general public in America does and you can be one of the survivors.
The better you know, the more likely you are to become a Survivor . So, what are the steps to take for survival? First step, be patient. This is the thing about patience, friends. Look at this chart . This is all about the economic recession. See that blue line ? That's currently the S&P 500 index, which is based on the bear markets that have existed since 1929 .
When there is no economic recession, but there is a bear market in the stock market , we see a gray line. That represents the days leading up to and following the peak of the bear market, right? So, basically, what you need to know is that we are on the blue line, and there is a gray or black line ahead of us.
The main difference in determining whether we have reached a tipping point is whether we are actually going to have an economic recession or not . If there had been no recession, we would likely be at a lower level now than we have in history . Because you can see that the bottom of that blue line is lower than the gray lines .
However, if a recession comes, we could have more lows ahead , albeit with some bull traps or bull runs lasting 3 to 6 weeks in between . So, it is very important to remember this. However, this is not all . Look at this. The S &P bear market is average in duration , but it's not the only one. Then, it's not just this.
Let's forget about the economic recession for a while. If we look at bear markets in general, the median recession time is 8 months. Now, but, this is not the only one. Take a look at the bear markets in the S&P 500 . The average duration of bear markets is 11 months. We are only 5 months into this so far.
Compared to all other bear market timeframes, look at this decline in red, which is why we have an average bear market duration of 8 months . So, be prepared for more hardships. I repeat , don't think about the bailout we got in March 2020. Sure, it took us 103 days to recover after the Covid crash, but it took 1,009 days to recover after the Great Financial Crisis, and 1,165 days to recover after the dot-com bubble.
Recovering from Covid is purely a matter of luck . So far, we have seen 111 days of hardship , and we have not yet begun the recovery period . Because look, there were 352 days of difficulty in the Great Financial Crisis . There were 638 days of difficulty in the dot-com bubble . We are still in the early stages of a bear market , and we still have a long way to go.
But look, sometimes these are the greatest opportunities . In fact, when the Fed makes a U-turn, it becomes the best time to invest . Now, who knows? Some say it could be a different time , that this time it could be different, that the real bottom will come in late 2023 or 2024 before the Federal Reserve shifts to accommodative policies .
But again, the most dangerous phrase in investing is: Historically , this time the situation is different. Instead, you should be prepared to be very patient until the Federal Reserve becomes somewhat accommodative. So, don't get too excited about green days (profit days), and don't get too disappointed about red days (loss days) .
Patience is going to be key for investors throughout 2022 and perhaps most of 2023 . Look, the next most important step, which is the second step, is to survive in the market. The most important thing here is to avoid losing your money and suffering huge losses . I'll show you why. For example, let's say you invest $100,000 for 40 years .
And let's say you invested in index funds with a 5% return per year , and you didn't care if the stock market went up or down . You covered everything with that 5% annual return . Now compare your returns to someone else who is earning 10% per year , because they may be good stock pickers . But for 40 years, you continued to earn an average return of 5%, through good times and bad.
But someone who doubles your income almost every year for the next 40 years , meaning that even if you double your income in 38 years over a 40- year period with a 95% success rate , will still lose money in the 10th and 20th years . They suffer losses of 60% on their trading . This means you will earn an average return of 5% over a 40-year period, staying consistent.
If you look back 40 years, the stock market has yielded an average return of 7.9%, even without taking dividends into account . Imagine a 5% return without selling, whether in good times or bad, and move forward . 95% of the time you will get a significantly better result than someone who has achieved double your revenue .
In fact, that $100,000 would have grown to more than $650,000 for someone who earned just 5% of their income over 40 years . And the person who gets that double return will have 15 to 20% less money than the patient investor who doesn't try to double the return of others. Those two losing years set them back in their 40-year long-term performance .
That's why patience is so important, and staying away from debt, margin debt, and credit card debt is crucial. See, the pandemic has taught us one important thing , and that is that there is no such thing as job security . They thought working in the police department would provide job security, but then the ' Defund the Police' movement came along.
People thought that cutting hair would be safe, but with the pandemic, people cut their own hair . Friends, never be careless about your job. This mindset is very important, as it will save you from debt. Being debt-free allows you to survive and persevere even in difficult times. If you are in debt , you should aim to get out of it as soon as possible .
That means credit cards, margin loans, car loans, and anything else that reduces your ability to grow your wealth. Pay these off quickly and get out of debt. This is what it means to stand as a winner . And friends, this is just the second step . Surviving, paying off debts, and realizing that your job isn't permanent.
And of course, it is very important that you be patient, because this is the time to be patient. The example I gave will clearly show you why. Don't be one of those who give up in difficult times. Next step, get an education. Do what you can to improve yourself professionally. Postpone retirement if necessary.
This is the right time to earn. It's time to take on another job and work hard. Get an education. Get a license. Become a licensed real estate agent. People need your help now more than ever. People need your financial advice now more than ever. It would be great if you could become a Series 65 Licensed Financial Advisor, Registered Investment Advisor, or CPA .
Help people make money while preserving their wealth. Because if you can enter a new sector when the market is down and survive the tough times , you will win big in the good times. Anyone can make money when the market is good. If you can help people make money and preserve wealth during difficult times , you will forever be a hero who will succeed.
That's why you're thinking, "Oh, I don't know." Is now the right time to get a license or become a coder or go to a coding boot camp? Sure. Now is the time to work harder and earn more money than ever before . And step four, friends, focus on cash and the investments you have the most confidence in.
It's different for everyone , so this is not financial advice. I will give you many suggestions, but I am not a financial advisor and I cannot give you financial advice because I do not know your situation . I have many suggestions . That's why I've linked below to programs to increase your wealth .
They are now 50% off, the biggest discount we've ever given, so you can take advantage of everything we know , especially about building wealth through real estate, which is our most popular program right now. But use that coupon code because it might expire within next week . So take a look, the link is below.
But friends, cash is very important now. People say, " Oh, inflation makes money lose value." No, that's not true. Inflation only reduces your cash flow when you need it for essentials like fuel. But if you have cash for investments, and real estate or stock prices are falling and assets are becoming cheaper, your dollar is actually increasing wealth, not losing it.
So remember, friends, cash is a great opportunity, and focusing on your most reliable investments will give you more patience . Some say now is the right time to diversify investments. I personally strongly oppose it . In my opinion, you should invest in America's development, in America's economic recovery .
If you want to invest in companies you trust in that area , definitely do so . But you should invest in the best American real estate, top American companies, and America in general. Personally, I don't think diversifying investments when the market is down is a good idea , but friends, everyone has their own opinion on this .
These are my suggestions and a warning to you about this recession or the coming financial crisis . Now, a quick word for those still watching the video, when the real estate market was really low between 2010 and 2011 , when Lauren and I bought our first house , everyone around us said, "This is the worst time for real estate." This is the worst time to buy real estate.
Oh, I feel sorry for your situation . Oh my God, this is so bad. Stupidity, stupidity, stupidity. Don't listen to others. Listen to your heart . When something seems like a good deal and a good opportunity comes along , be it the stock market or real estate today , or a year or two from now when job cuts and property foreclosures increase , my friends, be ready.
This is my best advice to you, and I wish you all the best , because that's exactly what we're doing . We are getting ready to buy real estate . We are buying stocks today, and we are going to buy real estate in the next two years , because we sold when real estate prices were at their peak, and now we are waiting for them to come back into the market . Thanks for watching, friends, see you again soon.
Comments 0