From Graham Stephan.
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A WARNING TO INVESTORS:
-Trump Tariffs: The ‘Consequences’
One: Higher Prices For Everyone
Independent groups estimate that the proposed tariffs would end up costing the average American family an extra $2,000 – $4,000 annually.
Two: Counter-Tariffs from other countries
Canada, Mexico, and China have all mentioned that they would impose additional tariffs on United States products, if we enact tariffs on them.
Three: A Decline In Economic Growth
It’s estimated that increased tariffs could result in a GDP loss of 1.2%.
Four: Less Innovation
If less competition exists, economists worry that innovation could be stifled. This is why the stock market has – so far – reacted somewhat negatively to threats of tariffs.
SP500 CONCENTRATION:
Only 28% of stocks within the SP500 are beating the index; the vast majority of ‘profits’ are simply due to the largest 7 companies doing incredibly well. In fact, the top 7 stocks make up 35% of the entire index, and the top 3 companies drive nearly half of all profits. This means – if they fall, everything else falls alongside with them.
It’s also becoming apparent that – so far – revenue is slowing down, growth might begin to level-off, and maybe people got a little too excited about the buzzwords of AI.
THE FEDERAL RESERVE:
Jerome Powell went on record to say that “there’s no need to rush interest rate cuts,” and – there’s the very real concern that Tariffs could wind up pushing prices higher, causing inflation to remain elevated. This means – the market is pricing in the likelihood that rates remain higher, for longer, and we’re unlikely to see a rate cut as quickly as most people expected – causing the market to fall.
BITCOIN / CRYPTOCURRENCY:
Over the last six years, Bitcoin’s chart has been nearly identical to a triple-leveraged NASDAQ, suggesting that – when the market goes up, Bitcoin trades right alongside with it – so, what we’re seeing isn’t unusual, whatsoever. Although, keep in mind: this isn’t even one of the worst drops we’ve ever seen; this is just another day for cryptocurrency investors to see their value drop by 20-70% in a relatively short period of time, before eventually recovering and surpassing previous all-time-highs.
HOW TO PREPARE:
One: Keep 3-6 months worth of expenses at all times.
That way, you won’t need to sell investments to pay for your living expenses in the event you lose your job, your income slows down, or something unforeseen comes up while the market is low.
Second, diversify your investments as much as possible.
The more you spread out your money, the more you reduce your risk and volatility, and the more you can keep buying in.
Third, Continue Buying As You Normally Would.
Study after study shows that the best thing you can do is just stick with your plan and not time the market.
Fourth, don’t sell.
The psychology that pushes you to sell because your investment is dropping, is going to be the same psychology that will hold you BACK when the market starts going back up.
Fifth, Keep Steady Income.
This helps insulate you from having to sell your investments at a loss.
Sixth, Hold Cash.
If you want to play it safe, keeping more cash on the sidelines is a way to do that.
Seventh, Stay out of Margin / Leverage.
No explanation, unless you really know what you’re doing.
Eighth – Don’t Invest Short Term.
There have been times throughout history where the market takes almost a decade to recover – so, the shorter your investment timeframe is – the less likely you should be invested in something that could drop in price.
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*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.
