Is It Time To Invest? - Investment Clock

Sometimes even good stocks fall in value. That’s because the economic environment is an important driver of asset returns. But what types of investments do well in each environment? The purpose of an investment clock is to demonstrate where we are in the economic cycle and help decide what to buy in each environment. And, most importantly, “What Time is it Now?”
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Timestamps
00:00 Introduction
00:29 The Business Cycle
01:37 Equity Sectors
05:06 Reality
07:34 The Problem
08:12 What Time Is It?
Where Else You Can Find Me
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Take A Look At Some Of My Other Videos & Playlists
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📹 Investing Strategies From Beginners To Advanced video • Investing Strategies F...
DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.
#Investing #StockMarket #PensionCraft

[@Pensioncraft]

Looking for a home for your ISA? Our friends at InvestEngine are offering a £25 bonus when you invest at least £100 (Ts&Cs apply) investengine.pxf.io/AoxaPN If you decide to register using this link then we will also receive a small commission. Capital at risk. InvestEngine (UK) Limited is Authorised and Regulated by the Financial Conduct Authority (FRN: 801128)

[@bubblydeveloper6180]

I really enjoy the data driven explainations. Learn so much from each of your videos. You also present the data much clearer then the ones from the actual sources and helps me understand the data faster. Please keep the content coming Ramin!

[@Pensioncraft]

Glad you like them @BubblyDeveloper

[@toddnedd2138]

A straight forward and serious explanation, like it. Maybe you can increase the probability by looking at sector rotation and go (hopefully right) with the market makers.

[@osmangjepali9293]

Outstanding content!!! So much value in this channel, thank you! keep supporting financial education :)

[@Pensioncraft]

Much appreciated @Osman gjepali

[@mikemoreno4469]

@Pensioncraft A wonderfully good explanation, Ramin. Thank you. What are the best consumer staples to invest in? Congratulations on your KZbin award there in the back ground, by the way.

[@loginoff2007]

This is a brilliant content. It is truly valuable. Thank you.

[@Pensioncraft]

You're very welcome @Vadim L

[@NSG1323]

‼️

[@luiscoelho7122]

we are on a stagflation, inflation is not really going away...4% on top of the past 10% is still HORRIBLE. Its still not (yet) time to be on consumer's stapple. Usually energy is where you want to be during a stagflation, specially during an energy crisis...but with the government manipulating energy prices....i rest my case... Thanks for your video, interesting points and i learnt a few things :)

[@tastypymp1287]

The government are not manipulating prices. There's no such thing as a price cap.

[@jnick5358]

Because the market is forward-looking, isn't the next cycle already priced in?

[@caflin9826]

Great video thanks

[@Pensioncraft]

Glad you enjoyed it @Ca Flin

[@vladimirstanojlovic]

Great video, thanks

[@Pensioncraft]

Glad it helped @Vladimir Stanojlovic

[@bobdobalina276]

Great content. Anyone here using low cost index trackers for those defensive staples, utils, and health care? If so which ones and how are you getting on?

[@psestock]

Appreciate the explanation of a complex subject to an understandable way for me. ❤😊

[@Pensioncraft]

Glad it was helpful @David Ong

[@samyoung6475]

Amazing video, thank you!

[@Pensioncraft]

Glad you liked it! @Sam Young

[@kikolatulipe]

Amazing video as usual !

[@Pensioncraft]

Glad you enjoyed it! @Slim

[@PoppAlexander]

Nice video - how often do you check or align where we are in the cycle and what makes sense…like once a month or once a quarter ?!

[@Pensioncraft]

Hi Alex, the "cycle" isn't smooth why I think the name is misleading and why I think it's better to think of growth as an upward trend punctuated by random and unpredictable crises. So you have more work to do when one of the crises hits (a bit like the varying attention a driver pays to the road when you're on a motorway/freeway vs in busy traffic at a road intersection/junction). That's the problem with this approach which is that to work well you have to be able to predict the future state of the economic clock. That's why some people use leading indicators for the clock like PMI level and rate of change because that does some of the work for you. Thanks, Ramin

[@PoppAlexander]

@@Pensioncraft Thanks Ramin - fully understood! I just wanted to find a structure to bring it into my weekly/monthly planning, as it gives you a specific logic to make your decision better! I have seen another version with commodities, bonds, cash and stocks and when to turn to each of them - have you seen and worked with that too?

[@charlesjarvis205]

Not sure I agree with first window ie interest rates increasing and technology to invest??

[@biker_marinator5696]

Thank you for informative video! What companies are in utilities? Is that same as commodities? BR from sweden

[@GliffYT]

Amazing! I am a 24(M) trying to expand my income (long-term time horizon), currently invested into ETF's covering NASDAQ, Green Energy, S&P 500, and the Total World market. I am also learning to trade cryptocurrency (swing) and am looking to have an investment stake into cryptocurrencies (Bitcoin, Etherium, Cardano, Polygon, etc) at the same time for the long-term. Technically, many believe that cryptocurrency may have seen a bottom recently but fundamentally we havent? This video was very insightful into this area; with a recession around the corner the cryptocurrency markets could/ would likely be shaken very much which could also cause more black swan/ contagens to rise from cracks.

[@kamilo4989]

Crypto market was dead in the water before all the stimulus money pumped into the markets in summer 2020. So be careful. Go look at the charts beginning of 2020 and then end of year 2020 and see the big difference. The other thing to remember is that in the last 1-2 years crypto has and is moving to Proof of Stake. In the last year alone, 6million ethers have been staked. That is to say that staking is eating up the supply as staked coins are not available for the next 1-2 years minimum. Which also has a profound effect on price.

[@torus186]

If the majority are doing the same thing then that's the reason markets move the way they do, ie in accordance to the rule book. Unfortunately it's when conditions change unexpectedly that ruins all these nice plans.

[@feleciawallace8420]

Yep, this past week was the perfect example, negative sentiment collapsed many such stocks were trending upside.

[@UziGameGP]

Buy when there's extreme pessimism, that was October and December. Now is not the good time unless you don't mind DCA when potential crash comes thus year.

[@danutc9043]

👍

[@squadmeta]

Accurate

[@WarrenBuffettDividend]

❤️

[@johndoh539]

Slightly off topic, I have just read in the sunday telegraph an article by Paul lewis of “money box” fame, that he doesn’t invest in the stock market as he sees it as “gambling” ! This is a man who on national radio is giving us all money advice. Perhaps one of his shows should be investigating why millions of peoples pension provision is invested in the shares of businesses and not kept in cash for decades as he does. I think there could be a radio slot for you Ramin 😊😊

[@chrisf1600]

Paul Lewis sounds a bit confused imho. Stocks pay an excess return because investors are paid to bear risk. That's not gambling, it's fair compensation for doing something that many people find unpleasant.

[@johndoh539]

@@chrisf1600 And fair compensation for doing something many people do not understand. ie, owning a piece of all the great businesses of the world.

[@tastypymp1287]

@@chrisf1600 They pay an 'excess' return because of inflation and speculation. The return figures the investment industrial complex quote are never adjusted for inflation.

[@chrisf1600]

@@tastypymp1287 That's not correct. Stocks pay a return greater than the risk-free rate because investors are buying access to future cashflows whose size and timing are unknown. In exchange for the emotional pain of not knowing if they'll ever get paid, these investors demand a "risk premium". This premium has averaged 4-7% (after inflation) over more than a hundred years of history across numerous markets. This excess return has nothing to do with inflation or speculation. It is fair compensation for doing something that many people don't find very pleasant (ie, bearing risk).

[@tastypymp1287]

@Chris F Absolute twaddle. That's pure textbook regurgitation. There is no 'risk premium' that you describe. Apart from dividends, stocks bear no yield at all. Any 'premium' is theoretically deducted from the intrinsic value, which itself is essentially an assumption. It is IMPOSSIBLE for equity, or any asset, to indefinitely outperform inflation if you understand the maths. Think about it, the aggregate value of all things cannot be above total money supply. That's impossible. Even double entry accounting methods demonstrate that. So if equities are always providing an excess return, at what expense elsewhere? It is the increase in debt that ultimately increases the values in a debt based economy. When does that turn from investment into speculation and eventually into a ponzi result?

[@jayearl3591]

42 macro have a similar framework to this, but I think Darius tries to take a look at forward indicators to try and gauge "the time". Another way could be to look at sector wide P/E (or similar valuation) ratios relative to historical distribution

[@LouisTheTraveler76]

One of your best videos Ramin, thanks! You provide a good road map to consider when investing given the environment. It could be said that utilities and defensives may be the new bonds for downturns. Thanks again - charts are great here too.

[@Pensioncraft]

Much appreciated @Louis

[@jimmarka3983]

As January goes, so goes the year ????

[@jonathanhowson6420]

This is all great, but remember people 'time in the market is better than timing the market. Just keep on keeping on. Get your investments right and pay into them every month as soon as you get paid and review every 6-12 months.

[@tastypymp1287]

That benefits the investment industrial complex more than you.

[@jonathanhowson6420]

@@tastypymp1287 maybe, but im not an expert in investing. I consistently but £40k in my pension and £20k in my isas every year and focus my efforts on my business and my ability to generate the money to live a reasonable life and provide for my family. Im in on 100% equties, but I generally 'play it safe' with things like the S&P500. As long as it grows at reasonable rate over time then its fulfilling my intentions and future needs.

[@tastypymp1287]

@@jonathanhowson6420 What's a reasonable rate and over what period of time?

[@tastypymp1287]

@Jonathan Howson Playing it safe? How is investing, blindly, in an asset than can loose 50% of its value in a year 'playing it safe'? An asset class that has repeatedly required massive bailouts and underwriting by the taxpayer to keep it from going completely bankrupt? The Investment Industrial Complex cannot and will not save you when it all goes wrong and you are heading into huge trouble as we speak.

[@squadmeta]

@@tastypymp1287 🎯

[@bawdiestcupid]

Thank you for the education. Great video 👍🏾

[@Pensioncraft]

Glad it was helpful @bawdiestcupid

[@firpowater]

I would be retiring or working less in 5 years and I just want to know best how people split their pay, how much of it goes into savings, spendings or investments. I earn around $165K per year but nothing to show for it yet.

[@bills.1390]

No, the time to invest was 3 months ago. Investment grade preferred stocks were selling for $5.00 to $10.00 under their $25.00 par prices and yielding well over 7%. Now most of mine are back to $25.00 par and some over $25.00. With a 25% + capital gain and a 7%+ yield you would be up well over 30% already.

[@andruseugene]

Wait for H1 2023 earnings season, you haven't seen the low.

[@XORTION]

Recession not even in. S&P will bounce to the low I’m looking at mid end of 2023. Finders crossed 😊

[@murarikaushik33]

Very confusing Ramin. You term Techs as Cyclicals. My understanding is that Banks, Miners and Oils are Cyclical. And also you characterise different cycle periods as rising interest and inflation environments in your first graph (green and pink).

[@jimmarka3983]

President of either parties 3rd year in 1st term is statistically favorable ????

[@knoxharington3173]

Thanks Ramin. How about a video on whether it’s ever worth an individual trying to time their investments? It seems to me that by the time anyone has looked at the charts to “tell the time”, the market (which is driven by big players with more experience and much faster algorithms) has priced it in. So you’re always going to be one step behind, no? Or.. do these trends take long enough to play out that it’s still worth shifting allocations around? Perhaps there’s a rule of thumb here in terms of how late to the party you can afford to be?

[@LFRAS94]

He would probably answer: "Good luck". The common wisdom is the one does poorly trying to time the markets (worse with the shorter timeframe you want to be accurate within) and typically underperforms.

[@chrisf1600]

You're absolutely right that the markets have already priced this stuff in. It's pointless altering your allocations.

[@sulimannoorkp1087]

I love your videos. Please suggest some value stocks for my tradethepool funded account

[@dan19752008]

Investors who get back into the market in the next quarter, will be very rewarded by the end of this decade.

[@tastypymp1287]

This message was brought to you by the Investment Industrial Complex.

[@stevo948]

Cash cash gang

[@sulimannoorkp1087]

Amazing video. Please suggest some value stocks for my tradethepool funded account.

[@ivailoruikov5558]

✔✔❤❤

[@luisluis5306]

Ive never invested, should i now? I have 0 debt and i dont know what platform to use.

[@bobdobalina276]

Just depends what you want. Personally I have AJ Bell and Interactive Investor. I've just moved my daughter's ISA over to Invest Engine and I have to say I really like it. I like the really simple portfolio building and re-balance feature and all very, very low cost (I think 112 has the same thing). I'll probably move my ISA to either them or trading212 as well. Just my personal choice.

[@luisluis5306]

@@bobdobalina276 Thanks for the detailed reply, what i want is to do this compounding thing ive been hearing about. I was recommended Vanguard as im a cautious investor.

[@jonathanreevestaxadvisor]

As always some great tips with plenty of food for thought and plenty to reflect upon. As the Fed is predicting a fall in inflation during 2023 do you expect the UK will be lagging or be close behind?

[@tastypymp1287]

I wonder if Ramin understands the difference between price and value? The main reason for the market of equities to increase more in price than not is inflation. The main reason for inflation is currency devaluation.

[@edan2629]

love the statistical data shared. and very objective point of view. as always

[@Pensioncraft]

Much appreciated! @E Dan

[@smartpipsarabia]

good predection but now un junuary we are in slow down not recession yet

[@stevegeek]

Very interesting. Maybe I misunderstood, but if equities react ahead of the current economic cycle, then shouldn't we be looking at buying stock with this in mind? For example, if we are in expansion stage we should buy consumer staples, knowing that a slowdown is coming and consumer staples will start to do then do well. It all seems a bit of a lottery anyway, without really knowing what's coming..but that's part of the fun of investing for me! ;-)

[@MagicNash89]

Another problem with the investment clock is it doesn't "notice" geopolitical events, or even civilizational events, that don't exactly fit in any of the "modes", or "zones".

[@tastypymp1287]

I wonder if it noticed subprime mortgages.

[@Wanderhirsch]

I want to say that it depends also on how you invest. Typically there are two scenarios: drip feed cash flows and lump sum investing. If I had a lump sum to invest, I'd go for the clock and pick something with the highest probability of return in the next few quarters. But if I drip feed my savings rate, I'd rather invest in something that won't rise very soon but will in a future cycle. This way I can ACCUMULATE equity that will rise in the medium/long term, sell when it rose enough and perhaps do the lump sum or drip feed into a different sector according to the clock then. Thanks for the good content Ramin, it's so valuable for the mindset and helps me think critically about my investing.

[@deepsudeep]

Good analysis but no one can predict what the market will do and when. No one knows what is priced in and what is not. Market reaction is sometimes bad for good news and good for bad news etc. Its really a coin toss

[@tastypymp1287]

False.

[@feleciawallace8420]

US stocks jumped up over the past week with increased volume - Big Tech, Banks, Airlines and others pushed much higher than anticipated causing confusion in the model presented today; we thought US economy is headed into Slow Growth Rising Recession... but stocks bucked the trend and jumped to the upside despite negative news from a few large Banks earnings reports ???

[@djayjp]

CPI report.

[@ohkee]

That’s why I dca. Time in the market beats timing the market.

[@tastypymp1287]

@@djayjp Yes, they viewed it as negative.

[@tastypymp1287]

@@ohkee Parroting investment industrial complex clichés....

[@djayjp]

@@tastypymp1287 Not true actually.

[@jimmyhvy2277]

Wait 6 months , IMHO .

[@RavenRaven-se6lr]

No Resources in the charts .

[@reno9920]

In addition to be right about your predictions you have to be before it gets already priced in

[@jameshazzard9403]

Hi there, do you (or other sources of information) consider climate change when establishing these ideas? It appears that our knowledge of investments and economic cycles comes from historical data, which of course does not represent our future. If we are heading towards a potentially very dangerous scenario in which societies and economics are existentially threatened, how does this affect our view of the answer to questions such as "Is it time to invest?", and "What time is it?"? Sometimes I feel that all of our advice and data is missing this key component, which is likely to have a huge impact.

[@ohkee]

The way how you act during the different phases of market cycles, really depends on your goals, and the way you are working with the financial markets. For example, if your goal is to invest for the long-term with a very long investment horizon of about 20 years, then it’s probably the best to dollar cost average, especially during times like these, in which the tech companies loses a big chunk of their market cap, a great buying opportunity so to speak, but if you are planning to retire you probably want to play it safe and won’t risk downward movements or a flat market, something that can happen in tech. Then it’s better to go in bonds or non-cyclical stocks, which pay dividends.

[@hussamkamel4001]

That’s exactly why I was thinking that purchasing stocks that discounted to take advantage inflation

[@kamilo4989]

Oh Ramin, I remember your videos before the pandemic before you got thousands of subscribers and set about creating your community library. It's been a real pleasure and inspiration watching you grow. Thank you for another top notch video as always.

[@Pensioncraft]

Wow, thank you @Kamil O I appreciate that

[@stevo728822]

There is something we know about the future. We know demographics are changing. We know the Boomer bulge is retiring and there aren't enough Gen X to replace them in the labour force. This means staff shortages will persist, which will reduce supply of goods and services, which will make inflation sticky. It will also promote more government spending and so keep taxes fairly high.

[@amcluesent]

Sell in May and go away

[@livingart2576]

🤪🤦‍♂️🤦‍♂️

[@ciaoatutti11111111]

And then you base your next month investment on momentum... Uhmm

[@tastypymp1287]

It's always time to invest according to Ramin and the Investment Industrial Complex he represents.

[@8G00SE8]

Why not? It's cheaper now than a year ago.

[@tastypymp1287]

@@8G00SE8 'Cheaper'.... Investment Industrial Complex speak.

[@chrisf1600]

You make it sound like saving for the future is a bad thing

[@tastypymp1287]

@Chris F That's not the same thing Chris. Come on, don't take me for a fool.

[@danguee1]

@@chrisf1600 Don't feed the troll. If we starve the trolls, they will eventually lose interest.