I’m a conservative but I love all your shows you are an intelligent man, worth listening to. Respect brother and keep up the good work & honest reporting
Sense you’re a conservative do you find yourself being pushed away from news such as Fox News? I’m genuinely curious and respect your rational thinking. Also, how do you define conservatism to you?
@@jaceunderwood7942 I am a conservative as well but here in social democratic Austria. I follow US politics since 2015 and I would vote for democrats in over 90% of cases at least. The democratic party is way more reasonable than left wing parties here in Auitria, also the GOP seems to shift more and more to the right and to crazy since Trump entered the political arena.
@@jaceunderwood7942 never watched Fox much it is more of a boomer thing I think. I have a background in accounting/finance and it is easy for me to spot lies from politicians & media on the economy on both sides, so I would say I am fiscally moderate and possibly left leaning. As a Catholic I would define conservatism as socially traditional so like complementarian views on gender roles is pretty much foundational
@@thegardencity92 That makes sense. Of course, the new brand of conservative (trumpists) or far right authoritarian types do not represent all conservatives... I am still a bit baffled as to how they got so mainstreamed though...
I have 12 good stocks scattered throughout technology, communications, financials, industrial, consumer staples, and consumer discretionary. I beat the market. You don't need to "find" the next big company. Just invest in the proven winners. Only about 20% of the companies in the S&P 500 make it profitable. The remainder drag it down. You're not looking for a needle in a haystack, you're looking for a needle in 4 straws of hay. It's absolutely possible to beat the market with a limited, concentrated portfolio of large cap blue chip stocks. You are being lied to that you can't beat it. That's just want they want you to think.
David you’re awesome. I’ve been watching you more and more over the last year or two and I’m very impressed with you intellect and honesty. Thank you and keep it up!
Yup! I have 12 good stocks scattered throughout technology, communications, financials, industrial, consumer staples, and discretionary. I beat the market. It's absolutely possible to beat the market with a limited, concentrated portfolio of large cap blue chip stocks. You are being lied to that you can't beat it. That's just want they want you to think.
Another important thing to remember about why you should invest in index funds: you won't ever lose all your money. If all companies in the S&P 500 go bankrupt instantly, which is what would need to happen to lose all of your money if it's in a S&P 500 index fund, the entire economy would be in a greater depression than we have ever seen. Things would be so much worse than any other depression we have ever had. You'll have much greater things to worry about.
I learned this the hard way, I knew every single thing you said but still fell in the greed trap of options and trying to time the market. Meanwhile my pension that only allow trading in diversified funds whooped my butt. I'm back on track, spend my time enjoying myself and invest only in cheap index funds.
The empirical evidence is there and I don't dispute it, but I'm still kinda puzzled. If the S&P is the average, then shouldn't about half of randomly chosen portfolios do better and about half do worse? How is it that active funds manage to nearly always do worse?
Cus they’re actively timing the dips and locking in losses. Also, their active management fees often eat up any returns they might get from outperforming the market.
The market avg is the both the top and bottom halves, but in order to beat the market you have to know the top half before the hand, and continue to make the right decision over and over. Only about 20% can beat the market. Usually takes a contrarian investor because you have to know something that the rest of the market hasn't priced in.
I mean, it totally depends on your timeframe. Yeah, year to year, half probably do better, half probably do worse. But over the long term, each active fund will either do as good as the index fund, or worse, because they have fees associated with them, because the people behind the picks need salaries. An index fund on the other hand has little to no fees, because nobody really needs to be paid to manage them, because it just copies what is in the index it is tracking. There are *some* people behind that fund that have to do *some* maintenance, but nothing close to what active funds need. For an active fund to beat an index fund, they not only have to outperform the market, but they have to do it at such a degree to overcome the cost of operating the fund itself. And the fund itself also probably wants a cut so it's not just profit neutral.
I wonder if you are or were a finance teacher David? Because you are so knowledgeable and it’s always a treat to listen to you calmly explain these concepts. Keep up the great work! Glad I found your channel and got out of cultish trumpian right. Some on the right aren’t so bad, but the fact that a lot of people that support trump are against LGBT people was sickening to me and I checked out a bunch of more left leaning channels. I still agree on some points on the left (probably just some economic stuff), but I definitely am more on the left now. I’m just glad your channel. My first sentence was kind of bad grammatically but ya get the gist I’m sure.
If you are using the S&P 500 Index as a representation of the Market, it is actually not that hard. Jeremy Siegel of Wharton has done a lot of research that indicates that any S&P Index not capitalization weighted does better. It could be equal weighted, weighted by dividends, earnings, etc. All outperform the standard S&P Index represented by the ETF, the SPY. Ray S.
I generally agree but what about buying the dips with good companies when there is clearly a significant dip that was unexpected and puts almost all stocks "on sale"? I'm thinking of a COVID-like dip. The stocks I bought at that time (ones I'd already been watching and that fit my ESG perspective) are way up, even after the recent bear market.
Folks can do it occasionally but it’s hard to know when companies will dip and bounce back or just stay flat or low for a long time. David’s portion and video on timing the market help explain why you probably won’t get consistent results with this strategy. Probably fine for a small portion of your portfolio to shoot for home runs but you likely don’t want to bet your retirement on timing dips which could be boom or busts for your assets.
Thanks for the prompt reply. I have to say that I'm outperforming the "experts" at Morgan Stanley where we (mistakenly, in retrospect) placed some assets. They are more buy at whatever the price is at the time and hold, while I like to buy the dips.
Buying the dip only works if you sell for more than you bought at. Again, like Packman said, you not only have to time the buy right, you have to time the sell as well. Have you sold the stocks that you bought? If so, fair enough, but if not, you can't truly say you're up until you've sold. We are certainly not through COVID, nor the financial woes that plague the nation. You could argue that the selloff that was created during the early days of COVID was an unwarranted panic, but that's is in hindsight, and perhaps premature. Plenty of people "bought the dip" when the market was falling in 07, only to see the market dip into a full blown, borderline depression in 08 and 09. You may not think you took a risk, but you absolutely did, and until you sell, you still are.
@@RigelOrionBeta If one has confidence in the company, they can always buy more if it goes even lower. To me, it seems prudent to study a company and know their price range well, then jump in at an opportune time if you like your chances. Of course, it is not 100% foolproof...all anyone can do is improve the odds of success. I never said I did not take a risk by buying a dip. Risk is inherent in investing in stocks; all one can do is try to lower it. Good dividends are also something I seek out. Then if it goes lower, at least you're getting paid to wait longer. Or, if you like to hold for a longer term, you are getting paid to do so.
I don't disagree but theoretically, if everyonebuys the S&P for no other reason other than it provides decent returns, would that not create a bubble or an inefficient market? Not an expert but just wondering.
I re=invest the dividends and capital gain distributions from my Vanguard broadly diversified index mutual fund/ETF account. I've been doing it for over 20 years and expect that in 20 years my children and myself will be able to live on the dividends alone forever.
There are fruitful buying seasons. The efficient market hypothesis has a fallacy that assumes rational decision-making based on all known information. Look for businesses in your area of competence then assess their financial position and competitive advantages & threats. Invest incrementally and take advantage of buying into good businesses when the market behaves irrationally. Maintain a long enough outlook (>10 years) and you’ll be in the top 5%. TLDR: Buy low, Sell never/when you critically need the cash
I mean, an index fund is a bunch of individual companies. If you're going to chose them yourself, then I gotta ask why? Know the risks, for one, if you are. Know which sector you are buying and how exposed that sector is to failing. Know how the stocks you buy are related - if one fails will the others fail? I don't see the point, broadly speaking, in picking your own stocks. There are index funds, there are also other funds that focus on sectors, there are higher growth funds that are slightly riskier.
@@RigelOrionBeta true, i had been picking my own stocks for a couple reasons but I'm switching to putting more into index funds and other trusts. The reason I was asking is to see if there were more taxes and fees in the long run in individual stocks. Initially I was avoiding fees I'd have to pay to an index fund, plus I was in full control of where my money was. But index funds seem much safer and easier, maybe even more cost effective?
My view is that one should hold the S&P 500 index ETF in a brokerage account and day trade on margin to capture gains above the index. But, you have to practice if you are going to day trade. It works for me.
It’s not impossible to beat the market a couple of times (through mostly pure luck), but it is impossible to beat the market CONSISTENTLY year after year. Yet every actively managed hedge fund manager will try to tell you otherwise. I stick with passive index funds. Buy and Hold.
I tried for a few years to be fancy and use different trading strategies to make money in the market. There are people out there that figure it out. But the thing I always go back to is what David says in the video: Do you really think you understand more about the market than hedge fund managers? Maybe you do. It may be worth your time to set aside some cash and try different things. But most of your savings should go to investing in the index because the odds are you aren’t going to beat the returns you’ll get from it.
Let's put it this way: with an annual rate of return of 6 percent on your investments at 1000 per year, you will make 100K in 60 to 80 years. Now, would you rather play it safe and wait until you're dead or would you look into trading options? Either way, you're literally gambling when you're investing.
How to beat the market: 1) Hold an S&P 500 index ETF with 98% cash value of your brokerage account. Never sell. Reinvest dividends into the S&P 500 index ETF. 2) Day trade on margin. Pay quarterly taxes. Use the gains to buy additional shares of the S&P 500 index ETF. ** WARNING -- You will lose money day trading when you start. You must practice is a paper money (fake money) account for quite a while. I recommend at least several quarters and probably just over a year for most people.
Each day, I am making good money day trading. Most money is made in the first 30-60 minutes after market open. I could probably quit my job and just day trade, but even someone like me that is bringing in these kinds of numbers is hesitant to quit their day job. Jan 5... 1,149.01 Jan 4... 89.36 Jan 3... 1,594.17 Jan 2... 1,904.47 Dec 27... 601.79 Dec 26... 621.63 Dec 22... 1,048.26 Dec 21... 525.10 Dec 20... 1,107.80 Dec 19... 5,102.80 My account is at 215k today, 1/6.
These are the primary things I track on a stock in no particular order 1) Moving Averages 2) Volume Weighted Average Price (VWAP) 3) Prior levels of support 4) Volume of stock sold at different price points 5) Average volume for this particular stock 6) Expansion and contraction of stock price 7) Fair value of a deeply undervalued business These are not the only indicators, but they serve me well.
I want to start investing but don't know where to begin. Any advice or contacts for help?
It's wise to seek professional guidance when building a strong financial portfolio due to its complexity
It's a great idea to have a conversation with financial advisors like Naomi Dean to reshape your portfolio.
I spread out my $25k portfolio across various markets to diversify my investments.
That's awesome! I ended up making a net profit of about $115k by investing in high dividend yield stocks, ETFs, and equity.
That woman is a genius
I’m a conservative but I love all your shows you are an intelligent man, worth listening to. Respect brother and keep up the good work & honest reporting
Sense you’re a conservative do you find yourself being pushed away from news such as Fox News? I’m genuinely curious and respect your rational thinking. Also, how do you define conservatism to you?
Wish others that leaned right had your attitude. We’d be in a better place.
@@jaceunderwood7942 I am a conservative as well but here in social democratic Austria. I follow US politics since 2015 and I would vote for democrats in over 90% of cases at least. The democratic party is way more reasonable than left wing parties here in Auitria, also the GOP seems to shift more and more to the right and to crazy since Trump entered the political arena.
@@jaceunderwood7942 never watched Fox much it is more of a boomer thing I think. I have a background in accounting/finance and it is easy for me to spot lies from politicians & media on the economy on both sides, so I would say I am fiscally moderate and possibly left leaning. As a Catholic I would define conservatism as socially traditional so like complementarian views on gender roles is pretty much foundational
@@thegardencity92
That makes sense. Of course, the new brand of conservative (trumpists) or far right authoritarian types do not represent all conservatives... I am still a bit baffled as to how they got so mainstreamed though...
I have 12 good stocks scattered throughout technology, communications, financials, industrial, consumer staples, and consumer discretionary. I beat the market.
You don't need to "find" the next big company. Just invest in the proven winners. Only about 20% of the companies in the S&P 500 make it profitable. The remainder drag it down. You're not looking for a needle in a haystack, you're looking for a needle in 4 straws of hay.
It's absolutely possible to beat the market with a limited, concentrated portfolio of large cap blue chip stocks. You are being lied to that you can't beat it. That's just want they want you to think.
Excellent video! So many fianance TH-camrs try and convince us that you can easily beat the market. “It’s so easy just buy the next Tesla.”
No one ever got rich playing it safe . Let that sink in
I’ve noticed Prageru (yes that disgrace) have started a video series of basic finance concepts.
That's FASCINATING! I wonder if it's any good. (It could happen.)
@@Insightfill I haven’t watched any of it, I just like to check out what nonsense they are posting.
David you’re awesome. I’ve been watching you more and more over the last year or two and I’m very impressed with you intellect and honesty. Thank you and keep it up!
You only really need 10-15 good stocks a decade. If you pick right you will beat the market by far
True I do the same thing
2.5x the SP500 the past 7 years
@@jaredsharp4496 the goal is to not lose money. You make money by picking solid stocks and then getting lucky with a few winners
Technically, only need 1!
@@jaredsharp4496whos ur financial advisor?
Yup! I have 12 good stocks scattered throughout technology, communications, financials, industrial, consumer staples, and discretionary. I beat the market.
It's absolutely possible to beat the market with a limited, concentrated portfolio of large cap blue chip stocks. You are being lied to that you can't beat it. That's just want they want you to think.
Another important thing to remember about why you should invest in index funds: you won't ever lose all your money. If all companies in the S&P 500 go bankrupt instantly, which is what would need to happen to lose all of your money if it's in a S&P 500 index fund, the entire economy would be in a greater depression than we have ever seen. Things would be so much worse than any other depression we have ever had. You'll have much greater things to worry about.
Yes
Single stocks can go down to zero
Sp500 never can or its ww3 and money is useless
I learned this the hard way, I knew every single thing you said but still fell in the greed trap of options and trying to time the market. Meanwhile my pension that only allow trading in diversified funds whooped my butt. I'm back on track, spend my time enjoying myself and invest only in cheap index funds.
It's amazing how many retail investors try to pick stocks and try to time trades in/out. They are basically funding passive investor's returns.
You can beat the market if you get elected to Congress
Yes pelosi has been beating the market whilst being drunk all the time
I beat the market every day. By that I mean I hit my phone while looking at how depressing the markets are.
Enjoying the new channel. Have a good one.
Your 100% wrong. Read any Peter Lynch book.
The empirical evidence is there and I don't dispute it, but I'm still kinda puzzled. If the S&P is the average, then shouldn't about half of randomly chosen portfolios do better and about half do worse? How is it that active funds manage to nearly always do worse?
Cus they’re actively timing the dips and locking in losses. Also, their active management fees often eat up any returns they might get from outperforming the market.
The market avg is the both the top and bottom halves, but in order to beat the market you have to know the top half before the hand, and continue to make the right decision over and over. Only about 20% can beat the market. Usually takes a contrarian investor because you have to know something that the rest of the market hasn't priced in.
I mean, it totally depends on your timeframe. Yeah, year to year, half probably do better, half probably do worse. But over the long term, each active fund will either do as good as the index fund, or worse, because they have fees associated with them, because the people behind the picks need salaries.
An index fund on the other hand has little to no fees, because nobody really needs to be paid to manage them, because it just copies what is in the index it is tracking. There are *some* people behind that fund that have to do *some* maintenance, but nothing close to what active funds need.
For an active fund to beat an index fund, they not only have to outperform the market, but they have to do it at such a degree to overcome the cost of operating the fund itself. And the fund itself also probably wants a cut so it's not just profit neutral.
This channel hit 100k views! rejoice!
I wonder if you are or were a finance teacher David? Because you are so knowledgeable and it’s always a treat to listen to you calmly explain these concepts. Keep up the great work! Glad I found your channel and got out of cultish trumpian right. Some on the right aren’t so bad, but the fact that a lot of people that support trump are against LGBT people was sickening to me and I checked out a bunch of more left leaning channels. I still agree on some points on the left (probably just some economic stuff), but I definitely am more on the left now. I’m just glad your channel.
My first sentence was kind of bad grammatically but ya get the gist I’m sure.
It's easy to beat the market...with a time machine.
great video, you got a new sub!
If you are using the S&P 500 Index as a representation of the Market, it is actually not that hard. Jeremy Siegel of Wharton has done a lot of research that indicates that any S&P Index not capitalization weighted does better. It could be equal weighted, weighted by dividends, earnings, etc. All outperform the standard S&P Index represented by the ETF, the SPY. Ray S.
I generally agree but what about buying the dips with good companies when there is clearly a significant dip that was unexpected and puts almost all stocks "on sale"? I'm thinking of a COVID-like dip. The stocks I bought at that time (ones I'd already been watching and that fit my ESG perspective) are way up, even after the recent bear market.
Folks can do it occasionally but it’s hard to know when companies will dip and bounce back or just stay flat or low for a long time. David’s portion and video on timing the market help explain why you probably won’t get consistent results with this strategy. Probably fine for a small portion of your portfolio to shoot for home runs but you likely don’t want to bet your retirement on timing dips which could be boom or busts for your assets.
Thanks for the prompt reply. I have to say that I'm outperforming the "experts" at Morgan Stanley where we (mistakenly, in retrospect) placed some assets. They are more buy at whatever the price is at the time and hold, while I like to buy the dips.
Buying the dip only works if you sell for more than you bought at. Again, like Packman said, you not only have to time the buy right, you have to time the sell as well.
Have you sold the stocks that you bought? If so, fair enough, but if not, you can't truly say you're up until you've sold. We are certainly not through COVID, nor the financial woes that plague the nation.
You could argue that the selloff that was created during the early days of COVID was an unwarranted panic, but that's is in hindsight, and perhaps premature. Plenty of people "bought the dip" when the market was falling in 07, only to see the market dip into a full blown, borderline depression in 08 and 09. You may not think you took a risk, but you absolutely did, and until you sell, you still are.
@@RigelOrionBeta If one has confidence in the company, they can always buy more if it goes even lower. To me, it seems prudent to study a company and know their price range well, then jump in at an opportune time if you like your chances. Of course, it is not 100% foolproof...all anyone can do is improve the odds of success. I never said I did not take a risk by buying a dip. Risk is inherent in investing in stocks; all one can do is try to lower it. Good dividends are also something I seek out. Then if it goes lower, at least you're getting paid to wait longer. Or, if you like to hold for a longer term, you are getting paid to do so.
I don't disagree but theoretically, if everyonebuys the S&P for no other reason other than it provides decent returns, would that not create a bubble or an inefficient market? Not an expert but just wondering.
So glad you are doing this channel, David. Investing is something too many of our fellow liberals/leftists shy away from for obvious reasons.
I re=invest the dividends and capital gain distributions from my Vanguard broadly diversified index mutual fund/ETF account. I've been doing it for over 20 years and expect that in 20 years my children and myself will be able to live on the dividends alone forever.
I like your drawing and chart.
There are fruitful buying seasons.
The efficient market hypothesis has a fallacy that assumes rational decision-making based on all known information. Look for businesses in your area of competence then assess their financial position and competitive advantages & threats.
Invest incrementally and take advantage of buying into good businesses when the market behaves irrationally. Maintain a long enough outlook (>10 years) and you’ll be in the top 5%.
TLDR: Buy low, Sell never/when you critically need the cash
What if I choose a large number of individual companies to hold long term?
I mean, an index fund is a bunch of individual companies. If you're going to chose them yourself, then I gotta ask why? Know the risks, for one, if you are. Know which sector you are buying and how exposed that sector is to failing. Know how the stocks you buy are related - if one fails will the others fail?
I don't see the point, broadly speaking, in picking your own stocks. There are index funds, there are also other funds that focus on sectors, there are higher growth funds that are slightly riskier.
@@RigelOrionBeta true, i had been picking my own stocks for a couple reasons but I'm switching to putting more into index funds and other trusts. The reason I was asking is to see if there were more taxes and fees in the long run in individual stocks.
Initially I was avoiding fees I'd have to pay to an index fund, plus I was in full control of where my money was. But index funds seem much safer and easier, maybe even more cost effective?
Passive returns is what’s left over after day traders, fund managers and corporations take their cut.
My view is that one should hold the S&P 500 index ETF in a brokerage account and day trade on margin to capture gains above the index. But, you have to practice if you are going to day trade. It works for me.
Why are you treating holding individual stocks like not owning the actual underlying businesses.
Can you beat the market? Yes. Can I? Nope.
It’s not impossible to beat the market a couple of times (through mostly pure luck), but it is impossible to beat the market CONSISTENTLY year after year. Yet every actively managed hedge fund manager will try to tell you otherwise. I stick with passive index funds. Buy and Hold.
I tried for a few years to be fancy and use different trading strategies to make money in the market. There are people out there that figure it out. But the thing I always go back to is what David says in the video: Do you really think you understand more about the market than hedge fund managers? Maybe you do. It may be worth your time to set aside some cash and try different things. But most of your savings should go to investing in the index because the odds are you aren’t going to beat the returns you’ll get from it.
Let's put it this way: with an annual rate of return of 6 percent on your investments at 1000 per year, you will make 100K in 60 to 80 years. Now, would you rather play it safe and wait until you're dead or would you look into trading options?
Either way, you're literally gambling when you're investing.
No. You’d use larger investments as income grew, and perhaps leverage at some stage too (but not required)
David only has an MBA. David, let’s be honest. The MBA is a survey degree. You didn’t even take any financial engineering classes.
So why not just buy the top 10 each month and rotate them out as and when they fall and rise out of the top 10?
Tax and buying selling costs plus, that’s kind of what index funds do anyway
Awesome
Important video
How to beat the market:
1) Hold an S&P 500 index ETF with 98% cash value of your brokerage account. Never sell. Reinvest dividends into the S&P 500 index ETF.
2) Day trade on margin. Pay quarterly taxes. Use the gains to buy additional shares of the S&P 500 index ETF.
** WARNING -- You will lose money day trading when you start. You must practice is a paper money (fake money) account for quite a while. I recommend at least several quarters and probably just over a year for most people.
Each day, I am making good money day trading. Most money is made in the first 30-60 minutes after market open.
I could probably quit my job and just day trade, but even someone like me that is bringing in these kinds of numbers is hesitant to quit their day job.
Jan 5... 1,149.01
Jan 4... 89.36
Jan 3... 1,594.17
Jan 2... 1,904.47
Dec 27... 601.79
Dec 26... 621.63
Dec 22... 1,048.26
Dec 21... 525.10
Dec 20... 1,107.80
Dec 19... 5,102.80
My account is at 215k today, 1/6.
These are the primary things I track on a stock in no particular order
1) Moving Averages
2) Volume Weighted Average Price (VWAP)
3) Prior levels of support
4) Volume of stock sold at different price points
5) Average volume for this particular stock
6) Expansion and contraction of stock price
7) Fair value of a deeply undervalued business
These are not the only indicators, but they serve me well.
So ur doing something 50billion usd hedge funds arent doing 😂
Save this 🤡
ok dude. im here, but if you run mid-video ads, im out, my guy. haha