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EXPLAINING THE DECLINING GDP:
One, MOST of the decline was due to a decrease in INVENTORY investment, which – was BOOMING in the final months of 2021. r.
TWO, the economy also saw a decline in spending across the state, federal, and local governments…which, was likely fueled by the decrease of unemployment insurance, child tax credits, and stimulus.
Third, EXPORTS declined by 3.2%…or, in other words…less of OUR OWN goods and services were shipped and sold overseas…which, could LIKLEY be the result of the ongoing Shutdown overseas, along with the international tension.
And Fourth, we also saw an 8.5% decline in DEFENSE SPENDING, which CNBC said, knocked a third of a percentage point off the final GDP.
In terms of how a recession could impact the stock market:
From 1869 to 2018…there have been a total of 16 recessions which had POSITIVE stock market returns….in fact, of those positive recessions…the market went UP an average of 9.8%, during a time the GDP declined by 3%…. or, in other words…out of 30 recessions…HALF had no correlation whatsoever with lower stock values.
To take that a step further, since 1869…one study found that the correlation between GDP growth and stock market returns was nearly ZERO – and, on average, the US stock market peaks SIX MONTHS before the start of a recession.
According to AWealthOfCommonSense Blog…throughout EVERY SINGLE RECESSION SINCE 1945…the stock market has – at SOME POINT – seen a sell off…with the average drawdown coming in at a whopping 29.2%…
https://marketsentiment.substack.com/p/recession-primer?s=r
HOWEVER…the GOOD NEWS is that, even though there CAN be a rather abrupt sell off…by the time the recession is OVER, the market actually RECOVERS, and has posted an average PROFIT of 1.7%…with, an average gain of 15.3% the following 1 year….meaning, INVESTING DURING A RECESSION is one of the most profitable times to invest. Not to mention, in the 3 years following every single recession we have ever had…the market was 100% in the green.
If anything, Bloomberg notes that a bear market tends to be a better predictor of a recession…rather than a recession being a predictor of a bear market.
Now, that’s not to say that prices can’t go lower, or that – a recession could last way longer than anticipated, or maybe this entire thing is a fluke false alarm…but, based on EVERY other recession in the past…the best course of action is to simply stay invested…and KEEP INVESTING when times are bad…especially if we do see an actual recession.
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It’s sus that every time a Democrat president goes into office it’s always a precursor to a recession
🕶🙌
Stagflation is not a result of high interest rates, it’s a result of inflation. High interest rates curb spending which lowers inflation.
do you ever do videos that arent about the “market crash”? Your videos used to be way better but these last two months youve just been repeating yourself every video. Please come up with new content instead of repeating the same message over and over and over. Theres not even a recesssion or a crash. you are just using fear as clickbait
Clever Graham. “No recession lasts longer than 18 months.” That’s correct, because if it lasts longer, it is no longer a recession but a depression. Love watching your videos, from a former stock broker.
Aka: Buy the market the 1st week of May and profit.
Nasdaq lost 86% of its value and SPY lost 50%
Ouuh copperband butterfly fish “for the Algorithm”
Thanks Graham, I always see your videos to make sure my strategy of investing every single day in broad index funds is still the right thing to do. Because all my friends keep saying, “man I made 6K with the Tesla fluctuations!”, and I’m like, “I have no idea how much I made or how that affected me” 😅
In 05 I predicted the 07 crash and in 07 in crashed big time!!! And it’s still going on now wwee at 40 trillion in debt $$$.
Does anyone else notice all of the spam comments posing as people having real conversations? They generally start with a generic comment of someone confused, wanting to know how to invest and another account (likely from the same person) recommending some advisor by name and then the link is posted.
Graham I would check it out.
Hi Gram gotta question here. I have roughly 7200 dollars to comfortably invest with, and I just opened up an acron account. Looking to go the dividend route but didn’t want to throw all eggs in one basket. Thoughts on a good approach? Dividened route to passive income is the way I want to go.
Great idea – it is working for me wife and I, but you do have to be able to earn money elsewhere to fuel further investment or grow your dividend portfolio more quickly so that you can more quickly arrive at a point where you can live of the dividends alone (which requires a very healthy portfolio).
Great work and good luck Nick!
Future income sources. Changing stations?
“Recession “ just means buy the dip lol
WHAT DO YOU THINK WILL HAPPEN MAY3-4???
Government spending is a large part of GDP. When they start to wind down spending in attempt to fight inflation, it’s no surprise the GDP contracted.
I’m going to sleep… wake me up in 18months
unsubscribing
so over dramatic
This is the first video I watch from you and as a first year student majoring in economics, I got to say that I wish you were my professor 😅. Everything is very well said and informational and much easier to understand (most importantly not boring) but at least this confirms that I’m actually learning accurate information in college. I’m subscribed and can’t wait to watch more videos!
The underwear index is real, happened to me
I liked…..after the mention of the Fish Picture LOL 😆 😂 🤣
If i only buy and don’t sell, do i really lose money?
this channel has been going downhill lately
I just wish he would stop making videos exactly like this over and over and over again.
I guess if you say the fed just crashed the stock market you would have to agree the fed bubbled the stock market early 2020 ( pandemic) . So the fed is only reversing what it done to save jobs and businesses. So reversing prices back to pre pandemic is ok , right. If the fed hadn’t done what it did early 2020 wouldn’t assets of crashed 50 odd % then. So assets correcting is understandable, right
gram help! my coffee is too expensive i need 10 cent coffe bro
The Fed *”Just”* Crashed The Stock Market?
Their multi-trillion-dollar machinations have been screaming calamity for *two years.*
Spy hitting 420 again IS a bear market. Cash on hand low.just don’t buy for a while
I think we all know we are in a recession.. u don’t have to wait for the feds to tell u
@Joe It is cheap money, exactly! Every US dollar spent is created by credit debit. It holds no value…
good job neoliberals 👍👍👍
Couldn’t the underwear and lipstick index be corrupted by supply also, most is made in China
This guy is a buffoon
Recession? Really? You don’t say.
Grahams videos in a nutshell:
Clickbait thumbnail
scary intro (market is crashing based on all these articles)
ending of video – keep investing, don’t worry, people who hold long term make money
Who gave you the script!
Also that is a great Simpsons quote
All of Congress got a 21% cost-of-living pay increase
We are entering a recession but the casinos are packed. 🤷♀️ it’s an absolutely mind boggling sight.
*Chuckles* I’m in danger
It is actually very entertaining watching all the positive economic channels very slowly waking up to reality. But you guys are way behind the curve.
On the opposite spectrum all the doomsayers are becoming more positive because what they invested in is starting to shine.
BUY THE DIP! STICK TO THE LONG RUN, PAPER IS TRASH
You are amazing
Curious how many blame this on biden? Yet even if trump had won the results would still be the same!
I have almost all my cash currently at the stockmarket and my portfolio is down about 20%. I can not put more money to the market in the near future. Should I sell all and buy back when the market goes down more or just hold?
Awesome! Thanks Graham!
God bless you
Too many lame ads and self promoting, but some decent info.
A simple message for all: embrace this market mayhem, it does not come around often, but when it does, this is the time where true wealth can be built…
Buy puts or calls?
First time in a while that the title isn’t actually click bait
You’re not wrong
I thought I was the only one getting these Depp trail recommendations… I was like y tho?
What ride is that in ur background
Ford GT!
First inflate it next crash it then call it free market
Seems like the crash comes from money actually not trickling down from the rich. Your definition of “stagflation” seemingly confirms it. Same as all the US assets held by foreign parties.
Bitcoin fixes this
Hey Graham what do you think of Carbon Credits? Like the KRBN etf? Would love to hear your input!
It will get worse before it gets better. But my plans do not change. I keep investing in companies / stocks that have a track record of performing well and will not stop. Only invest what you can truly afford to lose. Don’t invest to get rich but for long term growth and income.
Ron’s got the right idea!
You look like Tom Cruz ..
To much hands.. lol! Makes me disy.. great great video though… 👍👌
We’ve already had two consecutive quarters of negative GDP, so, we’re not half way there, we are in a recession.
You said you were retiring from YouTube but you’ve continued making videos so I’m confused.
Cool 😎
The incoming recession together with the current bear run will be both interesting and exciting!
@Hussian SalamVery true. One can never overestimate of these precautionary steps, especially using the services of a pundit. I ventured into stock with less than $100k and now my portfolio worth is almost hitting half a million dollars. Credits to Stephanie Priscilla Bonillo.`
As for me, it’s a mixed reaction of excitement and fear
@Marcos Rolohow can I reach pls, my TD account needs resuscitation
@Marian Parkeryou do that from her page on the internet.
@Ella Robert I don’t think he said it will positively affect the market
🤣 BUT we are getting to the bottom of it. 🤣
Just invest in Bitcoin and everything will be alright.
I see a 35% increase in Graham’s talking with his arms since the 3rd quarter of 2021
So much more disaster is on the way!
the next retracement wil be at least a 1/3 dow dip off 360
I love the video! Very informative and a couple pretty funny jokes. Thanks for the entertainment and information!
When this recession is over then what are you going to repackage every single week? Lol. Jk
Good content , thank you 👁🧘♂️
Stocks completely suck. Thats why we built a real estate backed blockchain token, that always goes up and pays a constant income stream at Yield Crowd.
Google drop drop drop
Telsa drop drop drop
US stock drop drop drop
anyone can tell me when will it end?
Graham, I respect you a lot, but I feel like I’m watching old tv when I see your videos, a lot of publicity in them
The markets are crashing. And, we are moving towards a world of Hyperinflation. Should you worry?
The markets overall have been moving sideways. This is something that was highly expected, so there is nothing new that is happening here. And, you have 0 reasons to panic.
As with any big financial decision, it’s important to keep your guard up for economic risks. However, smart planning, time management and seeking advice from a financial adviser can help keep you and your money safe.
@Chris Millson Well said. I ventured into stock with less than $100k and now I’m about 17,000 short of half a million dollars. Credits to Nicole Deanne Mckay. She’s verifiable.
@Michael Rutjens That’s awesome… i think i know the lady you speak about, i found her official page on the web.
Lol, I don’t know, should you?
Gold could be a good investment right ?
..Nobody knows if stocks go up or down in the short term, but we can be pretty sure that most are up in the long term 5+ years.
Amazon stock:
,.Amazon’s core areas earn billions in profit:
Amazon has the most efficient retail operations/logistics. Can you imagine how much other ecommerce must be hurting because they’re not as efficient as Amazon… and when they go out of business, that means more customers for the surviving company Amazon.
Amazon could eat the cost (subsidized by other line of businesses) but it doesn’t because Amazon Prime is raised from $119 to $139 and the stickiness of renewal is 98%.
This market is beyond crazy and ridiculous very depressing
Thanks for sharing this valuable information Graham.
“So when times are tough, women buy MORE lipstick, and men STOP buying underwear.” -probably some alien professor teaching their class about humans
Recessions are Healthy
Ahh peter schiff has taught him well
who are you? why are you doing all these?
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You become quite overwhelming because you don’t seem to take a break between your speeches. I get tired after watching your video. Maybe watch Andrei Jikh’s videos. He’s really good at that.
Should I sell my home and just move back with my parents and cash in the investment ,?
“We could be in a recession right now”? Ya think?
We’ve been in a recession since the states national debt went into the negative zone sir. When your personal bank account shows up negative? Do you ask yourself if, maybe, perhaps you’re broke? No. You know you are broke already.
So basically investing in the middle of recession could be good, but how about in the middle of inflation… It pretty much looks like stagflation, inflation because of war and supply chain issue and recession because of inflation and geting down inflation is going to take lot more than increasing fed rates, could it be that we are at peak of evolution and something unexpected is going to happen! (May be Thanos is on his way!)
Stonks.
Don’t you want rates to rise to stop hyper inflation?
Let us put “inflation” fully in perspective here. It hasn’t been just someone’s costs being passed on down the line, in this environment it has been someone’s excessive profits being passed as costs to then next in line and then passed down with varying degrees of excess profit in turn. Companies making record profits (it’s public information in their earnings calls) are obviously not merely passing on higher costs, they are the direct cause of those higher costs for everyone else.
You got a lot to learn
And it’s going to effect your young life.
Me I’m 65 seen it and heard it all.
You listening?
We aint selling sh$t lol
All of the rich are wanting to buy, but nobody wants to sell. The FED is trying soo hard to get people to sell, & they’re still soo hungry to collect as much debt as possible! It’s already crashed, but everyone will be told, it’s ok!
But they did raise the rate…
It’s not they are crashing the market. They are just choosing not to keep overinflating it. I can’t afford a house now do these assh***s so I am in favor of putting the brakes
It’d be great to know ways to do the most in these ups-and- downs, I mean I’ve heard of people that netted hundreds of thousands during these times, someone I saw on telly even earned well over $250K in less than a month, what’s the secret?
sure there are loads of ways to make a killing right now, but such high-volume near impeccable tradess can only be carried out by real-time experts.
At first, I assumed I had a hang of the market, I gained $60k one year and I was super elated, not until I stumbled upon a portfolio-advisr whose been guiding me since the market’s been sham after the Rona, to my utmost surprise I nettd a whooping $580K my first year, that made it clear there’s more to the market that we avg joes don’t know
That’s grand! I believe the high-value gains are backed by years of study/experience in knowing what makes what tick. the portfolio-advisr that guides you is who though
The advisor I use is Denise Sharnell Proctor, she’s verifiable and has a web presence, so you could just search her.
I usually would not take advises online but i curiously looked this Denise up and scheduled a phone call with her. she seems proficient and well-grounded.
5/2/22 fuel cost @. 4:46 gal you can’t spend 60. In fuel to make 85.00 day a complete crash
Fuel too costly 4:39 gal as of 5/6/22 can’t spend 60.00 fuel to make 80.00 complete market crash rate hike too soon
If the FED can crash the stock market, that means it wasn’t legit to begin with, just a blown up fraud caused by QE and TINA.
Let the FED step out and we will see it’s true value.
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