[0:00]What's up you guys? It's Graham here. So I'll be honest, I was not planning to post a video today, but given the current state of the economy, I felt like it would be a good idea to address everyone's concerns and share my own thoughts about what's going on.
[0:11]Because the reality is, a lot of people are not prepared to see their profits wiped away in a matter of hours or even days with the markets reacting to some of the most negative news that we have seen in a long time.
[0:22]That's why we really need to talk about exactly what's going on, what this means for you, and why you shouldn't just be focused on investing your money, but also protecting it because now is not the time to make any mistakes.
[0:33]Although before we start, as usual, if you appreciate me dropping everything I'm doing today to get this video out in time, it would mean the world to me if you hit the like button and subscribed if you haven't done that already.
[0:44]I know it's dumb to ask, it does help out tremendously though and as a thank you for doing that, here's a picture of an elephant. So thanks so much, and also a big thank you to Surfshark for sponsoring this video, but more on that later.
[0:54]All right, so in terms of what's happening, buckle up because here's a quick recap to bring you up to speed.
[0:59]All of this started on February 28th, when the United States and Israel launched a joint attack on Iran, but instead of Iran backing down, they fought back.
[1:07]They disabled shipping routes throughout critical points in the Middle East, and if there's one thing the world runs on, it's oil.
[1:14]And guess what? 20% of the world's oil runs through this small passageway called the Strait of Hormuz.
[1:20]And with this effectively blocked off, oil prices skyrocket, shipments are delayed, and the cost of moving anything from crude oil to natural gas to fertilizer goes through the roof.
[1:31]Now, initially, the markets didn't react because most people thought it would be over fairly quickly. That wasn't until today.
[1:38]All of a sudden, everything escalated, and people began to price in the possibility that this could drag on for a very, very long time.
[1:45]Now, even though it's impossible to predict the future, we can look back at what's happened in the past, and here's where things get interesting when it comes to market crashes.
[1:54]In terms of how bad things could potentially get, we got to talk about the year 1907.
[1:58]This was a time when the stock market crashed 50% after the 1906 San Francisco earthquake when heavy insurance payouts caused people to withdraw their gold from banks.
[2:07]Of course, that resulted in people panicking, the entire economy collapsed, and fun fact, that actually led to the financial policies that we have put in place today, known as the Federal Reserve.
[2:17]However, shortly after this 50% sell-off, the stock market surged 193% over the next four years, and that continued until we hit the Great Depression of 1929.
[2:28]Back then, the issue was that banks were lending out money to people so freely for the purposes of investing because back then, the stock market just kept going higher.
[2:37]But once the stock market showed the slightest glimpse of topping out, everyone started selling at the same time.
[2:42]They then went to the banks for fear that the banks would go to business, and started to pull their cash out, but the banks didn't have the cash because they had lent it out to other people for the purposes of investing.
[2:53]This led to the stock market dropping 83% over three years with a nearly 25% unemployment rate.
[2:58]In fact, the stock market didn't fully recover for almost 20 years when World War II offered enough work for the 17 million Americans who were unemployed.
[3:07]At which point, the stock market enjoyed almost 14 years of consistent economic growth, averaging a gain of over 815% during that time frame.
[3:16]Although after that, as the war ended, we saw another stock market drop of almost 22% over six months as veterans re-entered the workforce, began competing among a limited supply of jobs, and had to adjust to an economy that wasn't constantly flushed with government spending.
[3:31]But after that, we saw a 15-year increase in the stock market with prices going up over 935%.
[3:37]Then again, in 1973 and 4, the stock market lost another 40% of its value.
[3:42]This occurred when President Nixon removed the dollar from the gold standard, which inadvertently caused runaway inflation.
[3:49]The Federal Reserve had to increase interest rates and everything began to crash.
[3:52]Although after that, like clockwork, the markets continued climbing higher with the following three years averaging a gain of 845%.
[4:00]Then again, we got another one that's making its way around the internet, and that would be the Black Monday crash of 1987, where stocks dropped over 22% in a single day.
[4:10]However, that one was very short-lived and not too much longer after that, the stock market increased over 800% in the next 13 years.
[4:18]Then we have similar today with the AI boom, we have the dot-com bubble of 2001.
[4:22]This was caused by a frenzy of people buying internet-related companies because they believed this would be the future.
[4:28]But when those companies never actually made any money, eventually the bubble popped, and people lost about 40 to 60% of their value.
[4:34]But even despite all of that, the market still recovered to end over the next five years, we saw almost 110% growth until the Great Recession of 2008.
[4:42]I'm sure this one doesn't need too much explaining, but basically, banks lent out too much money to people who couldn't afford the mortgage payments.
[4:47]They eventually defaulted, that fell back in the banks, the banks went out of business, and the stock market dropped about 50%.
[4:55]However, after that, we recovered in the longest running bull market ever in history, until COVID, when the markets quickly fell 30%.
[5:03]To help with that, the government printed a lot of money, and that led to a 120% increase over the following five years.
[5:09]And finally, we have the tariff scare of 2025, when the stock market saw its largest single-day losses ever in history.
[5:16]And of course, you guessed it, we are up another 35% from the bottom.
[5:20]So in terms of what happens next with this panic, you're 100% going to want to hear this.
[5:24]Although before we go into that, as the economy gets more uncertain and financial stress rises, identity theft, fraud, and data breaches tend to increase right alongside with it.
[5:34]At the same time, our lives are more online than ever. I'm talking banking, investing, taxes, passwords, personal documents.
[5:41]This means that a single vulnerability could expose way more than people expect, especially if you're logging in public Wi-Fi networks at airports, hotels, or coffee shops.
[5:51]You're basically relying on networks you can't control. That's exactly why protecting your personal information matters way more today than it ever did in the past.
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[7:08]Thank you so much, and now let's go back to the video.
[7:11]All right, now, in terms of what's most likely to happen next, keep in mind that there's always a reason not to invest.
[7:16]Like even though it's very easy to think that, events like this are completely unique and this has never happened before. The reality is, it's not exactly uncommon.
[7:27]Like, take a look at this chart here. As you can see, throughout the last 80 years, almost every decade, there's something that happens which causes the stock market to sell off.
[7:34]But over time, eventually it recovers and we continue moving on as normal.
[7:38]Here's the thing we got to realize, even right now, the time I'm filming this video, the S&P 500 is still at the same point that was just a few months ago.
[7:47]And objectively, it's still up over 70% in the last five years, not including dividends.
[7:51]If you want even more proof about how profitable the stock market could be, take a look at this chart over the last 100 years.
[7:58]Green signals years of profit, red signals years of losses. As you could see, there's a lot more green than red.
[8:03]But there are red years of 17% losses, 23% losses, 30% losses, and even 40% losses.
[8:10]Although, guess what? After almost every single one of them, there are years of profits, and typically, it's multiple years of profits.
[8:16]And if you panicked and sold just waiting for the bottom, you would have missed out on a lot of the green.
[8:21]Separate from that, I mentioned this the other day, but I just want to repeat myself because I think it'll save people a lot of money.
[8:27]Ryan Detrick on Twitter, pointed out that during every major geopolitical event since World War II.
[8:35]Believe it or not, prices are on average 5% higher six months later. On top of that, it's also not unusual for February and March to be some of the worst months of the entire year, and then from there, trends resume higher.
[8:43]Or how about this to illustrate the point even further, every geopolitical event in history has been followed by a stock market increase.
[8:50]So now is definitely not the time to panic sell or try to time the market thinking this time is different.
[8:55]Second, another piece of data that's worth mentioning is that mid-term years, like 2026, usually see the largest peak to trough declines of any year in the presidential cycle.
[9:05]Like since 1950, the average in year pull back on a mid-term year has been 17.5% compared to just 11 to 13% in other years.
[9:14]So, if you're ever doubting your ability to dollar cost average into the markets and not panic, there's the data for you.
[9:20]By the way, a little off topic, but this picture sums up investor psychology perfectly.
[9:25]It starts off by buying into the markets, seeing some profits, being happy you didn't wait, but then seeing the market drop.
[9:31]At first, you're excited about the market dropping because you get to buy even more. Then all of a sudden it keeps dropping, and you start to panic.
[9:37]You waited out, but they get even worse. Then you sell at a massive loss.
[9:44]Things keep dropping and you're glad you sold. Then things start turning around, prices go up, you hold out, expecting things to drop even more, and then they don't.
[9:51]So eventually you buy back in at the same price you did originally, except now you lost a lot of money.
[9:55]I hate to say it, but this is true of so many investors. I saw this happen in 2020, 2022, and more recently in 2025, and I'm sure it's going to happen again today.
[10:05]All I'm getting at is this, the tried and true method of investing in the stock market that is proven to be successful each and every time, is simply a buy and hold strategy of more than 20 years.
[10:17]That's it. Seriously, the stock market is the only thing where if prices drop, people go into a state of panic.
[10:23]And from my perspective, unless you were planning to cash out and retire in the next few years, whatever it does in the short term, makes no difference whatsoever.
[10:32]Like you wouldn't go and panic if you bought a TV, and then a week later you saw the same one on sale for $100, right?
[10:38]Instead, you might say, oh, well, that's a good deal. Let me buy another TV. Well, how is that any different from the stock market?
[10:44]If you're just buying in and you're not planning to sell anything, you should be happy that prices are going down because now you could buy everything cheaper.
[10:51]That's why I never understood why people get so anxious about the stock market dropping in price, or thinking it's some apocalyptic event that we're never going to be able to recover from.
[11:01]Because so far history has shown us that that's never been the case. Instead, I think the biggest concern out there is for people who stop investing, who panic sell, who aren't able to keep buying in the dip.
[11:13]If you're one of those, then unfortunately, the stock market falling, yeah, it could be pretty bad if you take the wrong measures.
[11:20]But as long as you stay employed, keep investing consistently and have a long-term outlook, you're going to be just fine.
[11:26]If anything, you're probably going to wind up making more money. Honestly, now's not a time to panic, but it is a time to take a proactive approach for your finances, track your expenses, save and invest consistently, and put yourself in the best position possible.
[11:39]If anyone asks me if I think it's a good time to invest in the markets, I'm going to say yes, but as long as you have a long time horizon, and not looking at the next few weeks or even few months.
[11:50]And don't get me wrong. I have no idea what's going to happen in the future. Maybe things get worse, maybe tensions escalate, or maybe a resolution gets worked out within like a few hours of me posting these videos because I seem to have just awful timing when it comes to that.
[12:03]I post something, and then an hour later, the entire video's just irrelevant because something new has happened.
[12:08]The markets change so quickly. Just place a strong emphasis here on keeping with the plan as usual and view this as a test of your willpower to make sure you don't mess this up.
[12:17]Plus, as Warren Buffett once said, be fearful when others are greedy, greedy when others are fearful, and no matter what, hit the like button and subscribe if you haven't done that already.
[12:26]And also, I just turned on YouTube memberships, so if you click the join button, you'll be able to get an extra video for me every single week on more nuanced topics that I'm not able to post for like a wide audience.
[12:38]These topics are like what else I'm investing in, alternative investments, uh, potential tax strategies, by the way, like how to use a box spread to buy a primary residence so that you could write it off.
[12:48]It's just really weird topics that interest me. So if you want extra videos from me, hit the join button.
[12:55]You'll get an extra video there a week, otherwise nothing else changes. Uh, everything will remain the same.
[13:00]Thank you so much and until next time.
