[00:00] This is the scary truth. As long as you are properly prepared, I've been investing for more than 35 years,
[00:14] I've experienced lots of these crashes. to come out the other side wealthier than before. that has helped me make millions
[00:26] you can spot the warning signs of a crash So how common is a market crash? First is the most common type of decline,
[00:42] This is defined as at least a 10% drop from a recent high. but think of it as the stock market, and cutting back prices.
[00:57] around every 1.2 years since 1980. Now, you know when you're in a bear market, Since 1932, these bear markets
[01:12] They tend to keep dragging the market down for about 289 days, or roughly 9.6 months. but keep in mind that bull markets,
[01:26] usually last around 965 days or 2.6 years. which I class as an over 30% drop
[01:38] normally within a very short amount of time, In my opinion, if Trump had been unalived, That isn't a political view, just a logical one
[01:53] The main takeaway from all of this to go down sometimes, So how do you spot a market crash?
[02:07] so you'll know what to look out for. I'll also share the strategies I use at each stage backed This way you'll be better prepared than most investors.
[02:22] and this isn't financial advice. Number one, the euphoria phase. and irrational excitement drives prices
[02:36] During this stage, everyone is happy and flying high. I prepare my investments Before the 2008 financial crisis,
[02:51] that really made me cautious about investing. Everyone had money. They were spending thousands and the economy was thriving.
[03:04] a couple of years ago. that people would buy JPEG image files Things like this are a clear sign
[03:17] The second thing I noticed in 2008 was the increase in the number of people buying houses or refinancing. as the housing market was booming,
[03:32] then the banks could take back Now, it's one thing noticing these little clues, and preparing yourself.
[03:44] Between 2007-08, I could have just gone along with the crowd as the general herd mentality was that everything was great But instead, I started to prepare my investments
[03:57] and fellow business owners didn't quite understand They may have even seen me as a bit of a coward, how much risk they were taking.
[04:12] these are some of the things you can do and minimize your risk level wherever possible.
[04:24] as that's unsustainable for the long term. so my money compounds. I always think about the story of the tortoise and the hare.
[04:38] but slow and steady does win the race. there's a high chance you haven't experienced to see your portfolio completely halving in value
[04:53] So you have to ask yourself if you could mentally handle Secondly, I would start to reduce my leverage.
[05:05] to accelerate wealth, but it can also be very dangerous. then your investing platform may issue a margin call,
[05:18] and if you don't, your brokerage may sell your stocks If this is something you're considering I would be paying some of this debt off.
[05:33] and I'm well aware that by not taking on this risk, The truth is I've seen too many to broke in a blink of an eye.
[05:48] Thirdly, I'd start saving some extra cash I know I bang on about having an emergency fund but I'm talking about saving even more.
[06:03] From the outside, it looked a bit strange. I wasn't taking advantage of it. and more people were getting interested in investing,
[06:19] You see, when everyone starts getting comfortable that things are about to pop as pricing is being propped up
[06:31] The trouble is that at the first sign of a crash, which drives the prices down even further, I would make sure my investments were properly spread out.
[06:47] and it's one of the best ways you haven't got all your eggs in one basket. what sector is gonna be hit the hardest.
[07:01] to do very well with one or two stocks in only a couple of different companies. it can almost seem silly
[07:15] outperforms all your others. Let's use some of my favorite stocks as an example. Now, you could put all of that into Tesla with the hopes
[07:29] but if Tesla gets hit the hardest in a market crash, Whereas investing into a total US stock market fund would Look, nobody can predict if the stock market's gonna go up
[07:45] However, diversifying goes some way to reducing your risk. but at least you're investing in a broad range of sectors. on investment is through something called a high
[08:01] Take a look at this, for example. to put by with an additional $250 being saved monthly.
[08:13] you'd have earned $3,493 investment because the account pays you 5.1% interest with zero fees or subscriptions required,
[08:29] and ETFs with very low fees. so I reached out to them to see if they were interested They agreed on offering a free stock worth up to $300
[08:44] Just sign up for Public, deposit $20 or more, and enter the code MARK2024 via the rewards hub I'll leave a link in the description if you're interested,
[08:58] Number two, the reckoning phase. in the face with the truth to hold their nerve and make some money.
[09:14] of overvaluation sets in, What I'm trying to get at is in this phase, and it's next to impossible to be unaffected.
[09:28] and he was only 10. and even when they did come in, I had lots of products which I owned,
[09:43] It was sort of a bit like a safety blanket, I suppose. In 2008, I saw dollar stores opening up everywhere. and supply of products from failing businesses.
[09:58] and in phase one prepared correctly, It's more about human psychology is to sell their investments and cut their losses.
[10:13] what are you gonna do when the market goes down? until the market crashes. while everything's going up.
[10:25] To have this kind of belief, That's why it's so important to understand the fundamentals This reminds me of a story Peter Lynch once shared.
[10:41] and back in the day he bought shares in Kaiser Industries The company had zero debt making bankruptcy very unlikely.
[10:53] But the price kept dropping to under $10. and the stock eventually rebounded to $50. what will you do when the stock keeps dropping?
[11:10] This applies to index fund investors as well. that if you invested $10,000 in a simple S&P 500 index fund
[11:22] and the 31st of December, 2022, you would have $1,082,009. and ended up missing the five best trading days,
[11:37] then you would only have $671,051. just 50 of the best trading days brings you all the way down to $76,104.
[11:51] by time in the market, But if you believe in your stocks for the long term, In 2008, I saw what the dollar stores were doing,
[12:07] and instead of seeing a competitor, I saw an opportunity. then it must mean there were amazing deals available. I went on a bit of a buying spree over the next couple
[12:21] including stocks and even entire businesses. I knew that I would be unable to time the exact bottom This is called dollar cost averaging.
[12:35] you can snap up some amazing investments during this time. and supercharge it with a side hustle as the more assets you can invest in,
[12:50] The bottom line here is that while some choose to panic others choose to double down and buy the dip, I feel like I should also mention that some investors like
[13:06] that a stock will go down. However, people like Michael Burry have been very If you want to know more about this,
[13:19] if you feel like watching an entertaining Number three, the Phoenix phase. and rebuild rising from the ashes of the crash.
[13:35] I noticed that four years just after the London Olympics, things started to improve. and money was a bit easier to come by,
[13:50] the mentality of not spending carried through for a while, until everything was back to normal. I'm talking Black Monday, the.com bubble,
[14:04] the 2008 Financial Crisis and the 2020 pandemic. was that a bull market almost always follows a bear market, of crisis and uncertainty.
[14:20] and you're buying into the stock market consistently then you stand a much better chance If you want me to walk you through exactly
[14:34] that video right up there, but don't click on it just yet. Okay, I'll see you over there.