Webull:
How’s it going everybody pisses beat the bush markets are in turmoil right now it’s terrible minus 25% or so in this video i’m gonna talk to you through how to stay calm throughout everything now let’s say you’re the type that’s in the financial independent retire early type where you have 100 percent invested in stock market index funds and then let’s say you have a
Million dollars in there and all of a sudden you see a 25 percent market tumble in the snp your $1,000,000 suddenly is at $750,000 your $40,000 of passive income or whatever suddenly becomes $30,000 this is certainly gonna freak a lot of people out because if suddenly you’re surviving on $40,000 all of a sudden you can only pull out 30,000 this is probably considered
Quite a bit of hardship and the whole idea with this fire thing and and this 4% rule is that once you’re invested you really have to hold on to it long term and if you look at the history if it drops down by 50% generally it might take about five years to fully recover from the peak this happened in the dot-com bust and also the oh a financial crisis it took about
That long so personally you can see i can sleep pretty well i don’t have bags under my eyes because the stock markets going down and then i’m like freaking out over losing a lot of money i have to say i did lose some money so far i’m not immune to everything because i am invested in the market a little bit the thing i realized that makes me feel very comfortable is
That if you hold enough cash this is why it’s so important to hold on to cash when i say cash it’s not treasuries it’s not bonds it’s not gold even it’s not bitcoin so you want usd cash this is what you can use in order to pay your bills this is what you can use to buy groceries you need this cash sitting around so that you can live off of it for the years during
This downturn if there is a recession which it looks like it’s going that way and it’s gonna be a long time if it keeps on going it seems like it’s going to permanently hurt a lot of businesses and when you hurt businesses when you have businesses that goes bankrupt and when you have actual individuals that goes bank where you don’t recover from this for quite a
Long time and when this happens it’s sort of like a cascading effect when there’s a recession people cannot buy much stuff when people cannot buy much stuff there’s even more pullback in the industry they lay off more people and it goes around circle in a circle and it gets worse and worse and then well maybe something else happens that picks it back up again maybe
There’s an intervention from the central bank maybe there’s some policy changes but i do feel like the united states really don’t want this to happen they want to do everything they can to prevent a recession now i say you want to hold enough cash because if you happen to lose your job this might happen to a lot of people if there’s mass layoffs you don’t want to
Be forced to sell your stake in the stock market this is the worst time to sell it because it’s down by a lot suddenly you need the money and then you have to sell it at a really really cheap price you don’t do this for certain things right if you have a product and you see that it’s really cheap you might not want to sell it because you think well i bought it for
$100 i’m not gonna sell it for only 25 if you feel like you have the potential to get laid off you certainly should have some sort of emergency funds sitting around and certainly for people that are in this more fragile situation you probably want more and more cash just so you can have another layer of safety not to stoke fear into everyone to really calm you guys
You just have to imagine do you think the stock market is gonna go to zero i don’t think it is i don’t think this is what can cause our stock market to go to zero right this moment i don’t think it has a potential to completely destroy the entire united states economy over here let’s say there’s a 2% mortality rate and everyone gets this okay 2% of the population
Is gonna die and i don’t wish this okay i really don’t want this but if it happens it’s gonna be very terrible but most people are still gonna be alive over here but if this situation mutates okay there this thing if it changes and then we get another round of this disease type thing this might mean we have to change the way we live you know going forward maybe
Going forward everyone has to always wear masks everyone has to be very very careful in terms of who they touch in terms of handshakes you know hugs and stuff you really want to make sure you just don’t go willy-nilly just shaking everyone’s hand you just you know do a salute or something this is probably gonna be the norm going forward everybody just have to do
This now let’s say it does get worse and a lot of people get it and people are just freaked out all over the streets and businesses just go down because there’s not enough people going out to go to restaurants people are not flying but airlines you know the scale back everything scales back the longer that this draws out the more businesses that are gonna go
Bankrupt the more people are that are gonna get laid off and when you have those things they don’t change very fast and therefore the longer this happens work the longer it will take for the entire economy to recover maybe next week we enact something that is super duper effective you can cross your fingers for this right and let’s say there’s a ban on all modes
Of transportation you can’t even drive on the street and all of a sudden maybe two weeks later all of this dies down you know the market recover i think if we pause the economy we don’t have any sporting events we don’t have mass gatherings of a thousand people 500 people these days and if you just stop this for just a week or two it’s okay we can bounce back from
This but i think if we draw this out for an entire month of all these people that cannot even miss one paycheck if it’s for the entire month of no money coming in people are we gonna hurt people cannot pay the bills and then this is the point where it’s gonna take much longer to recover it might take two three months to recover so i imagine if this draws out for
Maybe two or three months it might take years to recover from this but if it’s within this month that we start to do something you know meaningful i think it can just as easily to recover within two or three months it might just pop right back to where it was before so this is another reason why if you’re in the market already it’s probably good to hold on to your
Dear life because you really don’t know when it’s gonna pop it might just keep on going down and then pop back up and if you just sold at the bottom you’re gonna miss out on all those gains but there’s also the chance that it would just keep on going down and then it’ll take five or six years to come back up you don’t know how long this is going to be is that if
You just hold on to just several years you’re most likely going to recover all the losses that you had before so this is something that might seize your worries even if it’s down 25% just don’t look at it right you can just go it’s gonna come right back when it does pop back up it’s going to do it with a vengeance like one day it might go up like 8% we see it very
Turbulent right now people are looking for a reason that this is the bottom this is the policy that the government can do that was you know this will be the thing that causes the start of the recovery and when this happens it’s just gonna go back up with a vengeance so think of you know the 8% dip you know it’s just one day another day as long as you hold on to it
It’s gonna go back right back up to 8% just as well so far from the peak of the smp it’s about a 27% dip now if you’re the dollar cost averaging index fund investor that puts a hundred percent of their money in you’ve been invested for several years okay it only pulled it back for one year it’s not that big a deal this year has been really crazy it just went up and
Up right so it went up 30% no one’s complaining it only went down 27% if this draws out more it might just go to 50% down and that 50% down it’s a big deal right it does not happen very often that is when i would say blood is on the street not that i think it won’t go down further because at the current rate of drawdown 8% 10% dip it might go down really really
Hard and just go fly right past minus 50% all the way down then minus 70% when it went down 10% i said might go down to 30 to 50% someone called me out and said you know this is just jumping the gun but i did i did say it was gonna go down to 30 to 50% so now based on what i see of this 27% and how fast is going down i think – 70% is a real possibility here and
I think some people are you gonna say i’m ridiculous it’s never happened in the oh one or oh eight but it’s a real possibility right now due to the massive index fund investing from everybody i think around minus 60 or 70% or so it’s when i would put down my foot and go this is it this is this is as low as it would ever go and i’m gonna put all my money in that’s
When i’m like man i should dig up a little bit more cash from my savings account and put it in which which i might just do you know as long as i have i guess five years living expenses or so just to just feel comfortable and warm and fuzzy just in case just in case like youtube revenue goes away because it definitely will if there’s a recession people are gonna
Advertise less you know i’m gonna get less money from making videos it’s gonna affect everyone now how do i see all of this play out for now i think there might be a possibility for each country to try and still contain this in other words yes it’s gonna kind of spread it a little bit more but then if we take the measures kind of do a lockdown i really feel like
We should do a lockdown for like two or three weeks we’re gonna hurt for now but at least we can hold the transmission as soon as you do a lockdown you’re gonna still see more people get it for up to a week or two but then at least after two weeks you’re not gonna see more transmission because everyone is locked down everyone has to stay where they are and then
You have to let everyone heal and then you can start up the economic activity again so in a way in the united states we just maybe just need to ramp up production of face masks of hand sanitizer so that it’s very very easily accessible everyone can access this and they can use it and maybe it can be government subsidized right they can just sell it for a dollar
Or maybe even give it away for free just everyone here take the face masks you can have one every single day and i think if you do this done no more transmission this whole thing just kind of goes away everyone has to follow these rules then more people won’t get sick the plus side of all of this is i think if people absorb this new way of doing business this new
Way of interacting socially with other people we’re gonna have a lot less flu deaths thanks for watching everybody don’t forget to give me a like on this video comment down below let me know what you think of my predictions just know that these are predictions not advice on investing and as always don’t forget to push that subscribe button and ring that bell icon thanks for watching
Transcribed from video
How to Not Panic During Market Downturns By BeatTheBush
