98% Of People Make THIS Mistake When Investing In Stocks | Stock Market For Beginners
Published: 2025-02-03
Status:
Available
|
Analyzed
Published: 2025-02-03
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Inflation is a persistent economic factor that has been present for decades and is expected to continue.
"inflation has been around not just since the pandemic but for decades prior to the pandemic and we know that inflation is going to stay around"
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The Federal Reserve has a stated goal of maintaining a 2% inflation rate.
"the Federal Reserve Bank even says so on their website that they're aiming for 2% inflation"
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Inflation disproportionately increases the wealth of investors.
"investors became disproportionately more wealthy because of inflation when it happens"
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The tax code provides lower tax rates and higher breaks for investors compared to W2 employees.
"a tax code is also designed to benefit certain people more than others guess what if you're a worker you're a W2 employee you get some of the lowest tax breaks and the highest tax rates versus when you're an investor you get to qualify for lower tax rates and higher tax breaks"
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A $1,000 investment in Amazon 25 years ago would have grown to approximately $366,000.
"a $11,000 investment in Amazon 25 years ago would be worth something like $366,000 today"
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A $1,000 investment in Amazon 20 years ago would have grown to approximately $74,000.
"$1,000 investment in Amazon 20 years ago will be worth around $74 ,000 today"
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A $1,000 investment in Amazon 10 years ago would have grown to approximately $8,000.
"a $1,000 investment in Amazon just 10 years ago would be worth right around $8,000 today"
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Sears' stock price more than tripled between 2008 and 2010.
"from 2008 to 2010 you'll see that the Sears stock more than tripled"
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The market has experienced significant crashes, including the Great Depression in the early 1930s and another in the 1970s due to high inflation and a slowing economy (stagflation).
"in the early 1930s we had the Great Depression we had the market crash but then in the 1970s we had another market crash because of the high inflation and the slowing economy this was an era of stagflation"
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The dotcom bubble burst in 2001, leading to a market crash.
"in 2001 we had the dotcom Bubble Burst you can see the market crash again"
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The real estate market experienced a significant downturn in 2008.
"in 2008 we had the real estate meltdown"
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The S&P 500 has demonstrated a pattern of market ups and downs over the past 90 years.
"the stock market more specifically the S&P 500 over the last 90 years and what you see is that the market goes up and down"
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Recessions are a recurring part of the economic system, and they are inevitably followed by market ups and downs.
"our economy goes through booms and busts it's a part of our economic system we have seen recessions happen in the past and they will continue to happen and along with these recessions come Market ups and downs"
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Investing in funds or baskets of companies (like ETFs) offers protection against individual company bankruptcies due to diversification.
"investing in funds or baskets of companies that went out in case one company goes bankrupt you're protected because you have other companies in this fund as well that are making money while others are losing money"
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The VTI ETF provides exposure to the entire stock market.
"vti this is an ETF that gives you exposure to the total stock market"
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The SPY ETF offers exposure to the S&P 500 index.
"spy this is one ETF that gives the exposure to the SNP 500"
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The DIA ETF provides exposure to the Dow Jones Industrial Average.
"di this is an ETF that gives the exposure to the Dow Jones Industrial Average"
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The QQQ ETF offers exposure to the NASDAQ 100 index.
"QQQ QQQ gives the exposure to the NASDAQ 100"
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The SPYD ETF tracks dividend-paying companies within the S&P 500.
"spyd which gives the exposure to dividend paying companies in the S&P 500"
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The most effective way to build wealth through funds is through a Consistent, Passive, and Automatic (CPA) investing strategy.
"you want to make sure your Investments are consistent number two you want to make sure your Investments are passive and number three you want to make sure your Investments are automatic I like to call this CPA consistent passive and automatic"
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Building wealth through funds using the CPA method requires a long-term commitment of decades.
"this CPA method of investing in these types of funds to build wealth is something you need to plan on doing for decades"
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Fees are a critical factor to consider when evaluating different types of investment funds.
"the three main things that you want to pay attention to when you're understanding the difference between these are number one the fees"
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Mutual funds typically have higher fees due to active management by individuals aiming to outperform the market.
"mutual funds are generally more actively managed and what that means is there is generally a person behind the actual mutual fund that's making the trades in and out of this mutual fund so now because there's a person sitting here and managing the trades managing the companies inside of the funds the goal is that this person will be able to outperform the market outperform an algorithm or a computer but you're going to have to pay this person higher fees so the fees are generally higher"
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Index funds are typically passively managed by algorithms or computers, rather than actively by humans.
"index funds are generally passively managed not actively managed which means that there's generally an algorithm or a computer that's managing these funds"
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The automated management of index funds makes them easier to manage and results in lower fees.
"when a company falls out of the S&P 500 this algorithm will kick one company out of the fund and put another company in so it's a lot easier to manage because it can be managed by a computer which also means that the fees are also lower"
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A 1% management fee can significantly reduce overall investment profits by over 25% throughout an investing career.
"a 1% fee over the course of your investing career can eat up more than a quarter of your total investment profits"
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ETFs offer the flexibility to be traded frequently, similar to individual stocks.
"you can trade in and out of an ETF just like a stock which kind of gives you a lot of ease with an ETF"
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ETFs can be either actively or passively managed, leading to a range of fee structures.
"you'll see that you'll have ETFs that are mutual fund based ETFs and Index Fund based ETFs so you'll see ETFs that are more actively managed and passively managed some will have higher fees and others some will have lower fees and others"
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