how's it going today guys I hope you're
having a fantastic day so in this video
here we're gonna be talking about this
idea of waiting for the stock market to
crash
market now I know you guys are probably
noticing a different view here with my
office I've just been having so much
trouble trying to get the lighting
correct in my new apartment
that I'm going to go back and use my old
set that I was using a couple of months
ago before I moved just because this is
a much better environment for the
lighting and I'm still gonna tinker
around and hopefully get the lighting
okay at my apartment so I can do a
combination but it seems like overall
this was the best area to record my
videos with the right lighting but I've
heard a lot of people talking about this
I've seen a lot of videos on this it's
this whole idea of waiting for the stock
market to crash before you begin
investing in the stock market and I kind
of want to debunk this today and talk
about why maybe this sounds like a great
idea on paper but in reality it's not
going to work the way that you are
expecting it to work now first of all I
do have to do my giveaway for stock
radar every single week I give away a
free lifetime membership to that in this
week's winner is El coyote 24 you
commented on my Instagram hashtag stock
radar so you've won a lifetime
membership to my stock analysis
membership site this week we talked
about hewwo
hu why a that is the twitch of China one
of those Chinese stocks that recently
went public that has been a wild ride
for investors for a number of reasons
but that's gonna be opening up again in
August if you guys are interested stay
tuned for more details on that but this
idea of investing when the stock market
crashes comes down to this investing
principle of buying low and selling high
so we all know that when we invest in
stocks you don't want to be buying
stocks that are hitting all-time highs
you want to invest in stocks when they
are cheap when the stock price is low
and then sell it a higher price down the
road and we know that over time in a
bull market the market becomes more and
more overvalued when you look at things
like the price to earnings ratio you see
what the earnings multiple these
companies are trading at and so a lot of
people get this idea that the whole
market has become overvalued and I
should sit in cash on the sidelines and
wait for this market
correct and then I will put all of my
money into the market at the perfect
time and I'll be able to ride it from
the bottom all the way back up to the
top and then I'm going to sell again but
there's a lot of problems with this idea
there's the first problem is the fact
that there's no way to tell when you're
going to be at the top of the market or
the bottom of the market and I know
there are a lot of people out there that
would like to convince you otherwise
they want you to believe that they have
some magic 8-ball that's going to tell
them the exact time when the stock
market's going to crash they're gonna
look at this specific ratio but there's
no way to tell whether or not the stock
market is going to crash tomorrow next
week or next year and so this idea you'd
be able to time it and get out at the
right point and then get back in is an
idea that is not true it's impossible to
be able to do this so my question to
those of you that do have this idea of
timing the market and getting in at
exactly the right time is what exactly
are you looking for are you waiting for
the stock market to fall 20% 25% 30% are
you waiting for a massive correction to
take place now I'm not saying that you
shouldn't you know have a general idea
about where the market is just and in
the way you're investing that is a wise
idea
don't be lump sum investing or dumping a
ton of money in at the top of a market
but you can't sit there and say that
you're gonna wait for the stock market
to crash before you start putting money
into it and the main reason for this is
that there are not many alternatives to
investing in the stock market if you put
your money in your savings account
you're gonna earn about a 0.5% interest
rate and we all know that inflation is
around 2% per year so you're gonna be
losing a massive amount of money to
inflation now yes it is a good idea to
keep some cash on the sidelines within
your investing accounts so we have our
emergency fund that is for all of your
emergency expenses and then you have
cash on the sidelines that you're not
investing but you have it sitting there
in case the right opportunity comes
around or maybe you've taken some
profits off the table and you've built
up a cash reserve I have no problem with
that I personally have a large cast
reserve at this point in time but my
problem is with the people who have 100
percent of their money in cash you're
earning
zero percent rate of return or some very
paltry amount of interest from your
savings account your money is being
deteriorated by inflation and you're
waiting for the perfect time to get back
into the market now another big problem
with this idea of waiting for the stock
market to crash before you invest is the
fact that when the stock market does in
fact crash and bottom out that is at the
maximum point of pessimism that is when
the sky is falling companies are going
bankrupt left and right and I know it
sounds like a good idea on paper of okay
I'll wait until exactly that point and
I'll funnel all of my money in but
you've got to have some serious guts to
be able to do that because every person
around you is going to be telling you
that you're an idiot
that you shouldn't be doing that that
stocks are going you know nowhere but
down because that's all they have done
previously so this idea that you're
going to even have the stomach or the
emotions to be able to do that or that
tolerance for risk is also something
that is just not true for most people if
you're afraid to be investing in the
stock market right now you're not going
to be liking the idea of investing when
you keep seeing the numbers fall and
fall and everyone around you is getting
out of the stock market so it's a idea
that does sound good on paper but it
just doesn't work well in practice now
the one thing I will say is this I
understand the idea of waiting for an
individual stock to have a crash or a
correction before investing because we
don't want to be investing in stocks at
all-time highs the saying is not buy
high sell higher it's buy low sell high
and waiting for a stock to come back to
reality is a good idea and that is
something I do myself as well so if you
are gonna be waiting for a stock to
crash or correct before investing I do
agree with that school of thought but a
lot of people have missed out on
opportunities by doing that I know a lot
of people were saying you know Amazon
stock is a thousand dollars a share how
could anybody invest in that at that
price you know I'm gonna wait for it to
come back to reality and now we're
seeing Amazon stock at seventeen hundred
dollars a share so I bet a lot of people
we're waiting for that stock to correct
it's really had no correction whatsoever
and it just keeps on going up so there
are instances where stocks are not going
to have a pullback and by waiting to get
in you
gonna miss that entire ride but again I
do not recommend investing in stocks at
all-time highs I don't do that
personally but if you are waiting for a
stock to correct or crash it may not
happen the way you are expecting it to
or you might have to be very patient and
wait for a very long time to see a
pullback happen with that stock but I do
understand the idea of waiting for a
stock to come back to reality before you
start buying shares of that stock so
rather than waiting for the stock market
to crash I want to share with you guys a
couple of strategies that make a lot
more sense and number one is dollar-cost
averaging so instead of putting all of
your money into the market or taking all
of your money out you're going to be
regularly accumulating shares of an
index fund or individual stocks over a
long span of time and by doing that
you're paying the average price for
those shares over a long span of time so
maybe you like Apple and maybe you like
Facebook stock and you wanted to have
you know $100,000 invested in that stock
I wouldn't recommend putting all that
money in at once you invest a couple
thousand dollars every single month and
buy shares over a long span of time and
by doing that you can sit there and not
have to worry about whether or not the
market is going up or the market is
going down or that particular stock is
going up or down because when that stock
price goes down you're accumulating more
shares and when you buy it at a higher
price it's going to average out and
you're gonna pay the market average for
those shares so the number one strategy
is just dollar cost averaging regularly
accumulating shares over a long span of
time the second thing that you can do if
you are worried about the market
becoming overvalued is to simply
increase your cash reserve or your cash
pile the money you're keeping on the
sidelines I'm not saying you should move
into 100 percent cash I hope we
dispelled that already but if you do
want to build up your cash pile and hold
on to more cash and then invest more
when you see the opportunities arise
that is a good strategy to follow as
well number three you might be
interested in exploring some different
investment avenues maybe you're going to
look at real estate I know personally
I've been investing in fundrise and that
allows me to invest in private
commercial real estate projects so
returns have been kind of lousy with the
stock market and that might be a time
when you
to explore different investment options
and see other ways that you can earn a
return for your money and outpace
inflation so exploring other investment
avenues is a good option but avoid
leaving your money in your checking
account
and earning a paltry rate of return for
interest and then forth and finally as
we discussed waiting for a stock to
correct is not a bad strategy waiting
for that price to come back to reality
before investing but like we said you
might miss out on some opportunities as
there are stocks out there that have not
really seen a correction you know stocks
like Amazon but we don't want to be
buying stocks at all-time highs so
waiting for a stock to come back to
reality is a good strategy but anyways
guys that's gonna wrap up this video I
hope I dispel this myth or this idea
that it's possible to wait for the
market to crash before entering your
best bet is to just stay the course and
maybe follow some of the strategies
outlined in this video but thank you
guys so much for watching and I will see
you in the next one if you are
interested in learning more about
investing in the stock market I've
created a free course just for you the
link is in the description below here
are a few other videos you might enjoy
as well
you
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