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THE NOVEMBER RATE HIKE:
There is no rate hike for the month of November. Just few days ago, Jerome Powell stated that “Financial conditions have tightened significantly in recent months…we remain attentive to these developments because persistent changes in financial conditions can have implications for the path of monetary policy.” The Federal Reserve has also admitted that “We know that we’re on an unsustainable path fiscally.”
Jerome Powell continued to reiterate that they’re taking a “wait-and-see” approach to upcoming rate hikes and they’ll prepared to adjust as needed in the future. It’s also worth noting that there’s a “lag effect” to raising interest rates, where the full effect won’t be truly felt for 6-18 months after the final rate hike; the AVERAGE delay is 11 months.
THE STOCK MARKET:
Here in the United States, we typically have this belief that – over the long term – stocks go higher. It’s shown that a 20-year holding period has never ONCE lost money. Statistically, this has proven to be true going back all the way to 1872 – but, there is a hidden risk: Throughout most of the world, there have been a variety of instances where the stock market has LOST money over a 20-year period.
According to MarketSentiment, since 1890 – once you add inflation to the mix – there’s a 1.2% chance of losing buying power over a 30-year horizon. However, this doesn’t account for the fact that we only have 130 years’ worth of data to pick from, and the United States could be suffering from survivorship bias, where we only see the data because it’s worked. Once we zoom out into other global markets, according to this report, there is a 9% chance that a Japan-like event could happen here, in the United States, at some point in the future.
THE HOUSING MARKET:
As of last week, mortgage rates hit the 8% mark, which is a level that we haven’t seen since 2000. This means that monthly payments are now 70% HIGHER than they were just two years ago, when mortgage rates were 3%. This combination has NOW led to 99% of the United States being “unaffordable” for the Average American who makes $71,000 per year – and this price-to-income ratio is now the worst its been since 1984.
In terms of where this could go in the next year, Zillow believes that home prices will see another 2.1% increase through September of 2024. In addition to that, Morgan Stanley revised their forecast and now believes that home prices could rise another 5% year-over-year given how many sellers are reluctant to let go of their existing mortgage.
A managing director at Goldman Sachs also went on record to say that, “Absent any negative shocks to the broader economy that would either boost the excess supply of homes on the market or fuel an uptick in unemployment, we continue to expect home prices to rise at a slow pace,” with his estimate that we’ll see a 3.5% increase by the end of 2024.
Because of that, I think it’s more important than ever to keep your expenses low, save as much as you can, ensure that you have the means to keep a steady income throughout the next 1-2 years – and no matter what…subscribe if you haven’t done that already 😉
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Should I decrease my 401k contributions and save up more cash?
damn bro, pit stains.
Elections have consequences.
That small problem is the Biden Administration
When the hell did you get 4.5 mil subs? Great job.
meow ( i just wanna see if you reepsonde to this comment )
Hahah why sad! Everything is going up!🔥🔥🔥
I’ve looked at grahams channel like twice a day for new content 😪😪😪😪 I just want so new stuff to learn graham. HAHA
We need an update on your net worth
Let’s revisit this once unemployment hit 10+% and there is no other choice for people to sell their homes because they created their own sub prime loans because they pre-qualified for far greater than what they could actually afford and bought at the top at the market. This will cause huge selling pressure. Don’t believe anything Redfin, Zillow or any other real estate site is projecting.
Hey Biden nomics is awesome isn’t it I mean with America just totally being destroyed and inflation compounding every year wars everywhere people pouring across the border I mean gosh I bet everybody wishes there was some of those mean tweets again
All about oil biden’s plan to make the middle class poor
high gas equals high food and goods less jobs more expensive materials layoffs more demand on workers to make up for labor increases in stress and depression now throw war in the mix
Click bait!
Drhorton Builds cookie cutter cardboard houses
4:09 did he mean raise interest rates not lower?
Hey guys, have you seen the market lately? My stock portfolio took quite a hit, my tech stocks took a big hit. And my investments in the energy sector also suffered. I lost almost $120,000 in my stock portfolio. It was a tough ride.
I think there are a few factors at play. Inflation is rising, and the Fed is talking about interest rate hikes. That’s spooking investors. Geopolitical tensions are playing a role too. The ongoing trade disputes and conflicts are making everyone nervous.
Agreed. When it comes to investing, the stock market can be a fantastic opportunity, but it is not without risk. My advisor taught me that diversification is important to balance potential opportunities and risks and to consider a combination of stocks, bonds and other assets. It’s a good idea to consult a CFP who can help you tailor your financial plan to your specific goals and circumstances. This is why I have a portfolio worth $2 million.
How do I find this CFP?
We’ve been with the same CFP for almost a decade, and she has been part of launching IPOs. We initially invested a modest sum early on, and it grew substantially, thanks to GameStop earnings in 2020/2021. Inflation has eroded some of the gains, but we’re fortunate to have “Theresa Dana Peek”, who has been diligently managing our wealth for the past eight years.
Excellent share, I just typed her full name into my computer and searched online. Top notch references, I’ve seen comments about advisors but none look that phenomenal.
US turning into India bruv
The effects of the downturn are beginning to sink in. People are being impacted by the long-term decline in property prices and the housing market. I recently sold my house in the Sacramento area, and I want to invest my lump-sum profit in the stock market before prices start to rise again. Is now the right moment to buy or not?
If you are new to the market, I recommend seeking professional assistance. The most effective approach to creating a well-organized portfolio is to begin with a professional who is knowledgeable about the turbulent yet profitable market.
A lot of folks downplay the role of professionals until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for license a and came across someone of due diligence, helped a lot to grow my reserve notwithstanding inflation, from $275k to approx. $850k so far.
@Dr Laszlo Lee I’ve been down a ton, I’m only holding on so I can recoup, I really need help, who is the professional that guides you?
@Melissa B Wehner I’m been guided by “Susan Bauer Normansell,” who is widely recognized for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field.
@Dr Laszlo Lee Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Just started to invest. Had to take it out. 😔