A Recession is Coming | Two reasons why I'm still buying stocks

There are two things that you need to understand about the stock market.
1) A ≠ B
The stock market is one of - if not the - most complex system we know. The number of variables that influence stock prices is near-infinite. And any patterns we observe, or opportunities we see to predict what might happen, are short-lived and eroded by the activities of other investors.
If a new event "A" occurred, and it looked like it was going to cause "B", the market would move within minutes to bake this into stock prices. This brings me nicely to reason number 2:
2) It's forward-looking
The stock market is constantly weighing the odds and potential outcomes of what might happen in the future. So all the risks you read in the newspaper will already be baked into stock prices. Does the market get it right all the time, no, does it get it right more than you? Yes.
You can either buy into that collective intelligence, and trust the market, or you can pit your wits against it.
👉🏻 Looking for help with Financial Planning?
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about working with us, please follow this link: go.novawm.com/getintouch
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (while James does run a financial planning business, he does not provide advice through this KZbin Channel, which is not affiliated with his employer).
0:00 A recession is coming
1:22 Reason 1
5:54 Reason 2
9:06 In the context of today's environment
11:40 Take aways
James Shack™ property of James Shackell
Copyright © James Shackell 2022. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.

[@JamesShack]

Focus on what you can control: Diversification Risk Cashflow And then... don't look.

[@sarchmaster5779]

I looked :(

[@jwracingteam]

Love your loved ones

[@KingKong-li2lg]

Always look .. less you go to zero like WorldCom, Peabody (how.many times did it tank), etc etc. If you don't pay attention to your investments - you will pay a unforgivable price

[@f1lmm]

😂😂😂😂 delete the truth bravo

[@elsemuller2460]

@@KingKong-li2lg If you are a stockpicker, yes you always have to look. Buy and hold is reasonable for indexer, and this is what Shack stands for- for a reason! Only the market as a whole always tends to go up over the long run. Individual stocks can go bust. Who will tell you? The market 😅

[@DoMythago]

Another exceptional video. You've got a very rare knack of being able to explain complex ideas in an engaging and easy-to-understand manner. 👍

[@JamesShack]

Thank you for saying so!

[@thesesweetpages8049]

Honestly James, your videos are fantastic and have completely changed my attitude to my finances. Thank you!

[@mr.sean.kennedy]

One of your best videos yet, thank you James. Really insightful and brilliantly explained.

[@spartacusptolemaida]

im glad you're back James. congratulations on your wedding and always thankful for your great insights!

[@JamesShack]

Thank you!

[@rolo153]

You have a truly fantastic way of explaining complex financial issues. Long may this continue. Thank you.

[@JamesShack]

Thank you very much for saying so!

[@shanefarrell9241]

I agree completely 👍

[@philgalz]

great advice as always, certainly helps me to take a balanced view, and "Don't Look" is genius!

[@mariasamper6773]

Thank you for these great videos James 🙏

[@Lfreeman98]

Great analogy - explained in simple terms without talking down to the viewer. 👏👏

[@JamesShack]

Glad you found it useful.

[@roseyk7677]

I've subscribed... Great content. Thank you Keep up the good work 👍

[@Zimpaz]

Great video James as always! And congrats on your wedding

[@Jigga00]

Welcome back good sir, another great video with well reasoned and sound logic.

[@JamesShack]

Good to be back!

[@neilcook1652]

Cool, Calm, Collected and Rational as ever James, THANK YOU!

[@JamesShack]

Glad you enjoyed it

[@adamedghill]

Awesome video, well explained and easy to understand.

[@jaydawg4732]

Great video! One thing to nitpick: correlation does imply a possible causal relationship but does not guarantee it. But you know this, just clarifying as it is often misunderstood.

[@keithhalliday4700]

Great video James. Thanks for you excellent insight.

[@user-oj9sk6gt1r]

Thanks for watching.... 👆👆👆 For more guidance and lessons Don't forget to hit the like button and subscribe. Leave a msg.. 👆🔥💯..

[@TheRichardgrime]

What a great, well balanced video! Well done!

[@DamienTalksMoney]

Your scripting is impeccable!! I hope you know that you are very good at this mate, awesome video. Welcome back and congrats on your wedding.

[@JamesShack]

Cheers mate! I was wrestling with this for a long time, and honestly I did not think it would catch on. You just never know what's gonna do well!

[@DamienTalksMoney]

@@JamesShack I know the feeling, I am a horrible judge of what will and won’t do well with my own content. Just have to keep throwing stuff at the wall.

[@JamesShack]

@@DamienTalksMoney It’s hard to see a difference from video to video. But just look back at where you (and I) have come from a year ago. It’s subtle things you get better at or faster at. But it still feels like the algorithm is just a RNG at times!

[@kevinoxley7488]

Exceptionally well explained - so much sense in every sentence.

[@user-oj9sk6gt1r]

ᵂʰᵃᵗˢᴬᵖᵖ✙𝟙𝟝𝟟𝟙𝟛𝟝𝟚𝟘𝟘𝟟𝟟 ᴹᵒʳᵉ ᵘᵖᵈᵃᵗᵉˢ ᵒⁿ ᴱᵀᴴ, ˢᴿᴾ, ˢᴼᴸ📊 ᵂʰᵃᵗˢᴬᵖᵖ✙𝟙𝟝𝟟𝟙𝟛𝟝𝟚𝟘𝟘𝟟𝟟 ᴹᵒʳᵉ ᵘᵖᵈᵃᵗᵉˢ ᵒⁿ ˣᴸᴹ, ᴺᶠᵀ, ᴮᵀᶜ📊 👆👆..

[@keithbrown339]

Thanks again for your great insights. Your enthusiasm and knowledgeable content are always worth my time.

[@JamesShack]

Glad to be of service.

[@presterjohn71]

Brilliant video. Well done on bringing something fresh to what is going on at the moment.

[@JamesShack]

You're welcome!

[@davidwarwick6378]

Straight to the point, exceptional content.

[@shocks123]

Just watched this again. It think its a great video and I will have to probably come back again and watch it in 12 months

[@patrickbateman4152]

Beautifully articulated.

[@nankumanyi]

Meteorology, Physics of motor racing, economics, psychology, mathematical game theory.....MATE! James, you're putting in the work my good man! Love it!

[@JamesShack]

Haha. Thank you!!!

[@Valentinouchka]

This video is so good, thx i learn so much!! Awsom content

[@JamesShack]

Glad you liked it!

[@ryanjames702]

Excellent video James, you really explained this well. Keep up the great work 👍

[@JamesShack]

Glad you enjoyed it!

[@xz9904]

Excellent video. Thanks!

[@JamesShack]

You are welcome!

[@maxflight777]

James … compelling content ! (Loved the Tennis and “who wants to be a millionaire “ comparisons) 👍

[@wedsonolivia4103]

is PRISCILLA DEARMIN-TURNER on youtube? please how do i reach her!

[@chriscarey1879]

Excellent video, yet again.....

[@JamesShack]

Cheers!

[@newdrug1880]

Very interesting stuff!

[@r1pcurl24]

Brilliant. Thanks!

[@JamesShack]

You're welcome!

[@garethdwright91]

Cheers, Jamagotchi!

[@JamesShack]

Thank again for the support!

[@dasdunetechnologies1695]

That's why the borgs are so powerful. Nice video by the way !

[@garythornton1003]

Hi James fantastic video, what would you say about buying property now or wait? Thanks

[@danielwhitehead7159]

James, once again I would like to thank you for your hard work and efforts with these videos. I have a friend who works as an Analyst at Vanguard and he has sung praises with your videos and the information you provide. I will continue to invest and continuously contribute to my diverse portfolio and utilise the most out of my Stock & Shares ISA.

[@JamesShack]

You're very welcome, thanks for continuing to support the channel!

[@rosso2017]

Excellent video

[@JamesShack]

Thank you very much!

[@SashaYanshin]

Great video James! 👍

[@JamesShack]

Thanks Sasha!

[@ihabiano]

Recession is here already. New to your channel... gonna give the rest of the vid an ear.

[@hollystiener16]

technically it is not

[@JamesShack]

I think people are interpretting "Recession" as another 2008. When technically it just means two quarters of negative real GDP growth. So if inflation is at 9% and the economy only grows 8%, for two quarters, that's technically a recession. This is a very different "Recession" to what people think it is.

[@willlsmith8063]

James good to have you back......top content

[@JamesShack]

Glad to be back!

[@DSLRguide]

I’ve been learning about the stock market for the past few years and this is the most relevant and rational argument for buy & hold investing in index funds. Makes me feel more confident in my strategy of investing heavily every week as the markets continue to drop :)

[@JamesShack]

You do that.

[@elsemuller2460]

@@JamesShack I ask myself if passive Indexing only works in markets like the US where the efficient market theory you explained works? Or also (or even better) in a global stock market portfolio? This would represent the best diversification but also may include inefficient markets. Does this matter?

[@rpals5412]

That's my strategy too. The only strategy that make sense for a normal human that doesn not have a crystal ball - or spend 8 hours a day researching companies to do stock picking and market timing. ;)

[@andrewcunningham3058]

What research did you do before you got into investing? Looking at starting to invest soon

[@andrewcunningham3058]

May i ask you learnt about stock market ? What resources did you use

[@andyf-d4222]

Great video, James. I'm 63 years old and retired with 50k in Premium Bonds and would dearly love to put it in a Life Strategy Fund but still unsure whether play safe with 20/80 or be a bit bold and go for 60/40?

[@nathangonmad]

Exceptionally good video

[@JamesShack]

Thank you!

[@farnio]

Great vid mate

[@JamesShack]

Thank you!

[@roberthuntley1090]

Related question - I've often wondered how tracker funds cope when a company they invest in falls out of the index. For instance, if company X leaves the FTSE tracker every related fund will have to sell those shares, which should drive the price down and guarantee that they all lose money (and vice versa for company Y joining the index, also losing money since their purchases will drive prices up). How do they hedge this effect?

[@PavelQuiteGood]

1:11 If one pulls down the rope, many things can happen: 1. the rope may break 2. the red pulley may fall down 3. the ceiling may collapse 4. the rope may stretch 5. the puller may be not strong enough to pull the weight up or even hold it We are used to safe systems, but reality is not so one-dimensional to claim that X = Y. 🤷‍♂

[@mark0365]

Sensible advice.

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@Zycoreination]

Due to my financial situation with assets on one hand and a loan on the other. With increased interest rates, I've made a financial decision to sell off majority of my assets to pay off my current loan, I will still invest monthly but not at the same rate as I have over the past few years, in 2 years I will completely debt free and I will return to invest more monthly again. This decision was completely based on the interest rates rising to my pain treshold between expected returns and guaranteed returns (aka paying off loan).

[@andyf10]

If there is a recession (almost certain) historically equities always go down. I went largely to cash in January and have watched markets fall since. There is no way I'm going in while things are falling, it's madness. It's not going to turn while inflation and rates are still increasing. I shall buy back in, but now is not the time. Prices will be lower in Q3/Q4. There is no way we are passed the worst yet, whether the market prices ahead or not.

[@esmeecampbell7396]

Pretty much did the same, I may not be a weathered old investor but when I was seeing 90% of people expecting a recession in 2022, then the tensions building pre-Ukraine war and the instability of USA and UK I pulled out to mostly cash. Turned out I sold on the peak (which was largely luck to have picked the exact best day) but now we are almost a full year into the recession, stocks are coming down (and even with hindsight this video was weirdly correct and wrong at the same time, the market hasn't fallen much since it was made and in fact it recovered in the month following this video) and even if they continue to fall over the next 12 months the prices we are seeing large companies with solid business models and little competition for are great compared to where they were at the start of the year. I'm not saying I'm some genius and we should go all in on Disney or Amazon, what I'm saying is you actually don't need to be very smart at the moment to pick a couple S&P100 stocks and outperform the S&P500 over the next decade probably because the 500 is going to see a lot of companies that are hanging on with bad fundamentals cut away over the next decade as debt is no longer cheap and people are no longer mindlessly buying. I'm not as much picking which 10 companies will 50X the market as much as I am picking which 10 companies I think are already dead and shuffling along and just omitting them from an S&P500 portfolio for the easy >10% over market gain. Will someone beat me by going all in on Indian ETF or an Indonesian business? Probably, but there'll be an equal and opposite person who loses nearly everything betting on Brazil or China...

[@rojaeshakarna7812]

I agree stock market is highly influenced by public sensation

[@runningman5871]

Markets only look out for the next year. You can do better if you are patient.

[@hannahb6471]

I only log into my Vanguard global all cap account when I need to change my monthly DD amount so most of the year I have no idea how it's doing. It helps my anxiety because I won't be retiring for at least 30 years so why waste energy on the performance now?! I have no idea if I'm doing the right thing but history tells me I am and I know if I try to beat the system then I'm likely to balls it right up!

[@JamesShack]

Damn right!

[@annmiller7097]

I bought my last property in June for 600k, I’m moving profit from stock to my real estate, really happy I got my cash flow right

[@JamesShack]

Glad you enjoyed it.

[@christianaroland1538]

That's the goal, keep going !

[@annmiller7097]

@wild jack I hired an expert, Monroe Horcel, look him up

[@michealjacob8426]

@wild jack I went to his seminar last month, he spoke well

[@Robertjohnson-qj4vf]

Monroe Horcel trades my stock all the way from Australia

[@travellingtom6091]

Technical error just to be picky. You say a warm front causes rainfall but show orographic rainfall, which is entirely different. Minor point, but it bugged me because I'm a sad person. 😁

[@MatthewKhoory]

Great video. How to currently balance holding shares vs. Paying off mortgage now given rate is up to 3.5% in Canada

[@JamesShack]

It's an interesting one. If inflation is at 9%, you're still making 5.5% in real terms from owning that debt. Paying it off does not make mathematical sense so long as you can find something else to do with you cash that is better than losing 5.5% per year in real terms.

[@AidanMyne]

what was it Buffet said, sell when others are greedy, buy when others are fretful?

[@sergio2679]

Great video! Still not sure though on which index fund to invest in. Vanguard all cap, vanguard s$p or vanguard FTSE all world? The first one is at its 5y bottom, the other two seem moving similarly and are well above the 5y bottom... Any advice? Thanks a lot and keep up with the great work!

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@elsemuller2460]

My guess would be: if those three indexes have fallen quite similar they will rise quite similar. If you are not sure which one to buy, why not buy some shares of all three? Maybe not SP500 because then your exposure to the US market would be overweighted . Only if you believe in the US market power more than into autocratic systems like China. Here is the overlapping with politics: does one person on top has more wisdom than all of us in a democracy? The experiment with the candy jar might have told ;-)

[@jamesc328]

I have unsubscribed to lots of Financial KZbinrs, especially the USA ones, too much click bait and you feel their content is just so they can get a video out that day. Yours on the other hand are really remind of the saying "Keep Calm and Carry On", well researched content,. Keep up the great work.

[@parttimelarry]

good job, great channel, cheers

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@olavrask9729]

I suggest you apply the advice given in the description to this video - "don't look". This man is giving perfect advice for throwing away your money,.

[@JamesShack]

How so?

[@Mhousley]

Yeah, how so? Don’t pay attention to this James, I bet he’s just a boomer…..

[@olavrask9729]

@@JamesShack By suggesting people invest in stocks now

[@olavrask9729]

@@Mhousley Hodl / buy the dip / dont look might have worked in a decade long bull, but why would you want to be long risk assets in a bear market?

[@Mhousley]

He’s right man, get in now! and with proper leverage of course… There’s no better opportunity than from now!!!!

[@jpalan]

And this is basically why you start buying those good businesses on discount now, while still anticipating a recession, and not later when the prices are maybe already up again because you wanted to wait and see if the market would go even lower. If the market then tanks more, you just buy more of the good stuff. We have all made the mistake of waiting for the market to sink even more before hitting the buy button, it didn't work out great.

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@PeterOConnl]

Time IN the market beats TIMING the market.

[@jneale7715]

The worst thing to every happen was taking the stock market/ currency off of gold prices!

[@juliankarpiuk320]

If everything is already priced in then is individual stock picking a losing game as well? Markets do price in future events but I would argue they usually don't see past the next 12 months.

[@JamesShack]

Yes, individual stock picking in on par a loosing game. That's not saying that all stock pickers lose, just that more of them lose than win. Because typically end up with higher fees than an index fund. But it's a style thing, if you like stock picking, and you actually know how to diversify and manage risk, sure. My argument would be why tho? It's a lot of stress for a very uncertain reward. Better to focus your attention on things you are more in control of like growing your income. The markets outlook changes all the time. Typically during high volatility it becomes more short sighted because no one can see 12 months out. There are too many shorter term risks that will skew the picture.

[@juliankarpiuk320]

@@JamesShack I try picking stocks and have a time horizon of 10 years+, I feel like this is a right choice for me as even when they go down I don't really worry, I know the businesses behind the stocks are doing well and the stocks will reflect that again eventually. I also enjoy the process of updating my knowledge about the businesses I own. Thank you for the response, appreciate it. Cheers.

[@chrisf1600]

If you're doing it in an attempt to beat the market, stock picking is a total waste of time. Even Ben Graham, the father of stock analysis, had basically given up on this approach by the 1970s. You can run whatever flashy cashflow models you like, but the question always boils down to "what discount rate do I use ?" A couple of percentage points in either direction will give wildly different stock prices. And even if you're right about the intrinsic value, who says the market is ever going to agree with you ? If you enjoy reading financial reports for fun, that's one thing, but you're highly unlikely to beat the market this way (not to mention the amount of time you'll spend trying)

[@juliankarpiuk320]

@@chrisf1600 always in history stocks reflected earnings and growth, for example you're never going to see Apple with a PE ratio of 5 because their cashflows and growth will keep the stock price higher. So market might take a few years to catch up but there comes a time when the profiits and growth are too obvious to ignore. If stock picking and beating the market was impossible then we wouldn't have great investors like Buffet or Lynch. There are plenty of retail investors who are multi-millionaires because they chose the right company like Amazon, Apple or Microsoft and held shares for 10-15 years+.

[@elsemuller2460]

@@juliankarpiuk320 For me Buffett and Lynch are no argument, since thousands of others failed. Also with the retail millionairs: luck not skill. Not to say, that others have better skills, there is no skill involved, if things cannot be predictable, right?

[@nathanfmaddock]

A quick question, if you maxed out the 40k a year pension allowance into an index fund how many years would you do this as you only have 1 million lifetime allowance and the tax for going over it is hefty. I’m 44 year old 😃

[@jam99]

It may be a quick question, but it is a long answer starting with, 'It depends'. It depends on how you think and what your intentions are. How much will you need? And what you think now may well change in a couple of decades. For retirement planning, talk to an advisor or, at least, do some more decent YouTubing to find out all the options (e.g. see Meaningfulmoney). Talking to an advisor is sometimes less about getting advice and more about being honest with yourself and seriously assessing now and the future. Have any children? Want to leave some of it to someone else when you die or do you intend to burn it all in your old age? Intending to die before or after 75? Research the history of the LTA - see how volatile it is. Where will the LTA go in the future? Tax policies are very socialist at the moment as all frozen 'savings' thresholds are being eroded by inflation. Research what happens to your pension when you die. Who knows what the LTA will be when you are old? We were told it would increase with inflation. That changed pretty quickly. Bottom line is, if you are earning enough to put 40k into your pension every year then if you don't, what else will you do with it? Do you fill your annual ISA allowance, too? ISA is accessible whenever life throws a curve ball or you want a big purchase, pension is not, so you might want to think about the balance there if you are not filling both. If you are filling both, and not living a frugal life, what are you doing asking such questions on KZbin? Talk to a friendly advisor; first chat should be free. If you are filling both and living the frugal life, maybe spend a bit; enjoy it while you can.

[@JamesShack]

Make an excel model and test it yourself!

[@user-wh3hr3oz6l]

Fingers crossed

[@zodd67]

You gave some really good examples, good vid!

[@JamesShack]

Glad you think so!

[@metalgirl]

So I’ll buy some VOO tomorrow.😬

[@annabellaandrewkingdon7972]

Cost price averaging. Buy monthly. If the market crashes, so what you weren't going to sell anyway (you should have sold when it was on a high when you had achieved your objective), so horary, you are now buying at a cheaper price. Perfect!

[@gregconnew3149]

Great advice James👏🏻👏🏻

[@JamesShack]

Thank for watching!

[@maltesetony9030]

Keep a slush-fund, hold on to your diversified shares funds / bond funds . . . . & DON'T PANIC!

[@matthewRest]

Hi James, are the Vanguard Life Strategy funds sensible for a pension?

[@JamesShack]

That depends on other factors related to you as an individual, but yes you can have a LS fund in a pension. Many people do, and that's all they invest in.

[@Adam-mo2qw]

I will be buying stocks and also heavily on crypto for the rest of the bear market. Spacing my buys out so they are evenly distributed over a 30 month period...

[@reeceavery3133]

Amazing as always, James

[@JamesShack]

Thanks again!

[@arunmenon6513]

Great advice but not reassuring when one invests at the very point there is a dip 😅

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@huskydogg7536]

I like to think of the stock market as a ouija board with 100 million hands on it. Predicting the short term direction is almost impossible.

[@JamesShack]

Good analogy

[@chrisf1600]

I'm usually an EMH advocate and I'm very sympathetic to this sort of argument ("whatever it is, it's probably already in the price"). One objection, though, is that investors are social creatures and they tend to be highly influenced by what others are doing. When people see rising prices, they become optimistic which tends to lead to more rises which leads to more optimism (and of course, vice versa for falling markets). This process isn't immediate because it involves a feedback loop. When you look at the behaviour of something like QQQ over the past six months, it's very hard to attribute those moves to the wisdom of the crowd reacting dispassionately to emerging economic news. It feels to me more like a herd of sheep running off a cliff !

[@user-xs3dj6xy5p]

⬆️⬆️H.E.L.P.L.I.N.E.⬆️⬆️

[@notyetjp]

Deeply agree. It is why understanding human's emotional responses, (incl. your own) as well as the madness of crowds is at least as important as all the technical analysis/'wisdom' of the crowd. Some of the crowd is wise. Imho, much more of it is emotionally driven, at peak times of volatility. I see it as the biggest, high stakes poker game on earth. We all get to play w/ life changing bets. Bogle taught me how to play it and changed my life. James continues to do him proud in real time. Low cost indexing works. Better than anything over the long term. It is so simple. But it sure isn't easy for the human ego. Especially.the 'intelligent' ego. Good luck.

[@user-xs3dj6xy5p]

@@notyetjp text me on telegram

[@The_Unintelligent_Speculator]

Inflation is lovely for my leveraged assets.

[@MrHotass81]

Is etoro a good place to invest for the long term

[@MrHotass81]

just give an answer

[@nadiacuenca5073]

I feel that I AM THE BALL hit by both Nadal and Djokovic

[@BrilliantNetworking]

Excellent video James! Markets have millions of actors acting rationally and irrationally, predictably and unpredictably. Whereas collective intelligence does exist do you also believe as Charles Mackay would argue in ‘the madness of crowds’ reflected in the market?

[@JamesShack]

Yes, we see this often but it's normally confined to certain pockets of the markets where speculation is rife allowing valuations to become totally detached from fundamentals. Over last few years we've had examples in cannabis stocks, cryptocurrencies, NFT's, EV companies and high growth tech stocks. The market does not get it right all the time - and we can only know when it's right vs wrong in hindsight - but it gets it right far more reliably than the vast majority of active investors. Even Peter Lynch, one of the few investors that has been able to beat the market consistently, famously said: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

[@bumblebee9288]

Bought loads more last few weeks prices are so low why the hell not???

[@zizzyballuba4373]

i can 99% predict stock market direction just by executing an order

[@hollystiener16]

haha

[@jonathanhowson6420]

What do you class as low cost index funds? What are low fees and what would be considered high? Currently invest on a monthly basis through my HL Lifetime ISA, paying in every month to effectively pound cost average. I think the fees are around 1 - 1.5%. Should I be looking elsewhere?

[@JamesShack]

A index fund will typically charge between 0.1-0.4% depending on what it's tracking. HL have a 0.45% fee for holding funds. But you could find some ETF tracker funds that would mean you only have to pay the trading fee. The most cost effective fee structure depends on the size of your portfolios and how much you're investing each month. For small values, % based fees work out best. For larger portfolios £ based fees work best.

[@RRTY940]

Hi. Vanguards US Equity Index fund might suit you better. The OCF is 0.10% and is from £100 pcm or £500+ lump sum investments.

[@Sabhail_ar_Alba]

Think about Dot Com crash - it took SP500 7 years to return to pre-crash high.

[@shortstraw4]

The market can be irrational longer than you can stay solvent. Aka wisdom of the crowd doesn't always hold true

[@JamesShack]

Doesn't always hold true, but it's very hard to beat. Which is what is being said here.

[@iccz]

On "who wants to be a millionaire" people generally use ask the audience first, and save phone a friend for later questions, are these figures balanced based on the value of the question or just general figures?

[@JamesShack]

Do they really, I would imagine that people would start doing the opposite if they noticed the audience was more likely to get it right. I don't know, but it's not a scientific study unlike the other examples.

[@iccz]

@@JamesShack from memory of watching it while growing up it would usually be the first lifeline used (at least on UK version), I think a lot of it comes down to you know niche areas of knowledge for your friends. But you're right it's just a general analogy throwing stats out to related it to actual studies. I was just curious if there was more info on them! Cheers!

[@Ellio1862]

I’ve kept investing every month into my fund, even though it’s down 18% since January. Holding cash is throwing money away, i hold one year’s salary as an emergency , everything else is invested .

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@lead111]

Losing money on stocks is also throwing money away

[@njtrukitfukit9650]

I like this guy im glad utube reference me to your channel u gotta new sub. Continue DCA nothing more!💪🏿📈

[@user-xs3dj6xy5p]

⬆️⬆️H.E.L.P.L.I.N.E.⬆️⬆️

[@ketty5573]

Good analogies, but how does this help me investing/trading? I need profits right now!

[@user-oj9sk6gt1r]

ᵂʰᵃᵗˢᴬᵖᵖ✙𝟙𝟝𝟟𝟙𝟛𝟝𝟚𝟘𝟘𝟟𝟟 ᴹᵒʳᵉ ᵘᵖᵈᵃᵗᵉˢ ᵒⁿ ᴱᵀᴴ, ˢᴿᴾ, ˢᴼᴸ📊 ᵂʰᵃᵗˢᴬᵖᵖ✙𝟙𝟝𝟟𝟙𝟛𝟝𝟚𝟘𝟘𝟟𝟟 ᴹᵒʳᵉ ᵘᵖᵈᵃᵗᵉˢ ᵒⁿ ˣᴸᴹ, ᴺᶠᵀ, ᴮᵀᶜ📊 👆👆..

[@juliantucker354]

I would say ask the audience was used more for the easier questions though.

[@50Kvful]

Trend Trading worked, until?

[@pistopit7142]

How do I reduce risk of my porfolio? Because bonds went tits up.

[@JamesShack]

Well.... Bonds. Bonds have only gone tits up if you plan on selling. If you hold a bond to it's maturity, or hold a bond fund beyond it's duration, you shouldn't lose money.

[@Valentinouchka]

if you dont invest in ETF, look at compagny fundamentals to reduce risk and found value: cash flow, P/E, debt, margin, products, dividends etc ... Diversification and fundamental is key. For example, if you have 10 stocks, each form different sector and country around the globe, the risk and volatility is much lower. Do not over expose you to a country and a sector, many investor 100% US technology and they are living an absolute nightmare right know loosing over 70%.... while good old stocks like coca-cola are up 10% YTD

[@pistopit7142]

​@@JamesShackThanks. If interest rates go up 10% (hopefuly unlikely) then bond etf with duration say 7 years would fall by about 70%. I doubt I would get my 70% back if I held this bond etf for another 7 years. As a retail investor I would like to hold real bonds, idealy those issued by UK government. But this is not easy to do if even possible at all for retail investor. If however I could hold such asset, it would then be much clearer for me that bonds are indeed fixed income, rather than fluctuating as it is the case with bond etfs. I guess cash alocation is the easiest answer to reduce portfolio beta.

[@MartinHopkinson]

I always like your videos James and I fully agree with your philosophy of not second guessing the market. However, I’d like to question this idea of the cash ladder (or bucket strategy) in retirement. It’s very popular as an idea with financial planners but, like your analogies earlier in the video, I suspect that it’s one of those counter-intuitive situations. You suggest that, if you’re in retirement you should know where your next three to five years of income is coming from and that it should be “held in either cash or short term government bonds.” That’s a lot of capital over a long retirement to be sitting around not earning anything! I produced a calculator for myself to test the principle of withdrawing from the portfolio regardless of downturns, versus holding enough cash not to need to withdraw for a couple of years. I know about sequence of returns risk but ‘withdrawing regardless’ wins hands down in the long run from what I can see. It’s because over the long run, markets rise! If you hold too much cash, the loss of returns in the good times isn’t offset enough by the gains you make by relying on cash in the bad times. I know you like your spreadsheets, so have you done this exercise?! Idea for a video?

[@JamesShack]

Hi Martin, are you able to share the calculator with me? [e-mail]

[@JamesShack]

The strategy will depends on the individual client. If someone is risk averse or does not need to take a large amount of risk to achieve their goals then it often makes sense to have a larger cash buffer. If someone is more high risk, and is willing to be more flexible with their income during prolonged downturns, then yes you can be more lean. Often it comes down to peace of mind. Clients will sometimes decide to work an extra year or two to get them into a position where they don't have to be MIN MAXing it.

[@mark.k7206]

All true….its just getting everyone onboard & not jumping overboard once the market falls. 👍👍

[@VegasMilgauss]

Care homes still needs funds boys!

[@user-oj9sk6gt1r]

WhatsApp now for more updates, explanation, tips, advise and suggestions 👆👆 Thanks for your comments

[@dasdunetechnologies1695]

Where it it ?

[@rich3222]

Would you not agree that if in the future the s&p 500 were at another all time high and inflation was at 6% and had been rising each month ,then the fed announced that they were going to increase interest rates to curb inflation ,at that point at the hour of the announment would it be worth selling up knowing that there was a 90% chance of a very large long crash ,and if not timing the bottom at least wait a few months and buy back to avoid some of the downside, are there not any circumstances like the above where the odds are so high of a long slow crash that its worth selling.

[@Valentinouchka]

What you are describing is a strategie for trying to time the market and if you try to time the market on the long term you will lost gain

[@rich3222]

@@Valentinouchka I agree because it is effectively swing trading ,however the example above where inflation is high and the fed is increasing interest rates has always led to a crash historically, ot a very specific example of a one off time you might sell ,and different to predicting markets based on bad news

[@Valentinouchka]

@@rich3222 yes, you can try to get out at this time, but by staying out of the market you will miss dividend and compounding and pay extra fee or taxes depending on the country, plus how do you know when to get back in? How do you time the bottom? You are way better with DCA on an index funds. Even if you time perfectly on the longterm the difference will not be that big because time in the market beat timing the market, even if it sound really contra intuitive during a crash

[@brendantrollip1268]

Somebody's been reading the Intelligent Investor 🙂

[@JamesShack]

And some!

[@marcr2204]

you look super angry in the thumbnail :) i almost got scared