How NOT To Invest - Advice for Beginners

I lost so much money the market has dropped a lot and I want to make sense out of all this madness let's say you're brand new to the investment world or maybe you've been investing for a while you might be wondering what are we supposed to do should we sell the stocks right now should we buy more should we invest in cryptocurrency should we buy gold what are we supposed to do it's like a casino out there you might as well go to Vegas and play with that guy sick of the stock market let's go to the roulette table and bet it all on red or maybe you want blue maybe you want to double up on blue and have the two blues or maybe you want to go to Red's you think I think doing it this way is gonna lose you money yeah weird place your bets [Applause] [Music] hi my name is Andre chick and today I want to be really honest with you and tell you that I had a hard time making this video because there's so much going on in this world there's so much noise people are panicking they're selling their investments and I had a hard time structuring this video in a way that's easy to understand in a way that helps you in a way that entertains you and hopefully gives you the information that you need to know without being too confusing because it's so easy to just throw around complex data complex words say a lot without saying much at all and I don't know about you but whenever I get confused then I personally turn to the news and I try to get an explanation of what's going on I get way more confused by the end of it they mentioned words like quantitative easing yields Treasury bonds negative interest rates it's hard to make sense out of all of the intricacies so in this video I'm gonna try my best to make it as useful and as fun as possible so that you can have some actionable advice on what to do in this crazy chaos that is this world today so here's my solution first I'm gonna try to explain what's going on in the first place secondly I'm gonna try to make sense of why it's going on and thirdly I'm gonna show you exactly what I'm doing with my money right now by putting my money where my mouth is literally except not really not literally cuz that'd be really unsanitary but I'm gonna take you behind the scenes and show you step-by-step what I'm doing with the Robin Hood app and I'm gonna show you exactly what I'm buying you can follow along if you'd like so let's get started and first let's break it up into bite-sized chunks that was stupid I'm sorry so here's the problem right now this is what people are experiencing it's not necessarily what they're seeing it's what they're feeling on the inside let me show you mobile users announced that the Federal Reserve will print more than 700 billion dollars to bail out the banks was being called as the world's largest economic crisis of our time [Applause] foster homes pension imagine that's what you saw even my youtube comments are like this gonna have to have lost 100k this week so without further ado there's no better way for me to show you what's going on then just show you my Robin Hood portfolio right now so let's take a look so you can see last week my Robin Hood investment portfolio says I was worth two hundred four thousand dollars and today the seven point nine four percent lost or a hundred eighty eight thousand one hundred fifty seven dollars that is a sixteen thousand two hundred thirty seven dollar difference now I don't know about you but sixteen thousand dollars in a span of a week it's kind of a lot cuz I don't make sixteen grand a week typically I mean not yet I was told the YouTube money was gonna be good but it's uh it's not quite there yet maybe someday though I I hope I'll get there I know it's eight percent now would you look at that Oh a 0.13% I just lost four hundred dollars in a few seconds this is this is fine this is normal everything is gonna be just fine terrifying right don't worry if you're an investor like me we are all in the same boat everyone is panic selling and getting rid of their stocks in this one week alone we have lost eight percent and what does that mean Andre eight percent like how bad is that really well just to illustrate eight percent means if I did this one week alone we have lost the equivalent and I've taken a step back as one year's worth of progress just gone that means if you've been investing for an entire year and you watched your money grow for 365 days straight eight percent is exactly how much we've lost in one week alone banks like Goldman Sachs are predicting that we're supposedly going to lose another seven percent this year alone which is almost another year's worth of progress that's projected to be erased in 2020 that means that we might have the worst week for stocks since the crash of 2008 but what I am looking forward to it I want to lose more money that's a weird thing to say right before I started investing I never in a million years thought I would be happier having less money but I am happier right now having $180,000 in my Robinhood account than when I had $200,000 why because even though having $200,000 is cool that it makes me feel like I have a larger net worth strokes my ego yeah sure it feels nice but guess what fortunes and passive income streams are not built during bull markets they're built in times like this when everyone is panicking and when things are in freefall and I can think of no better situation to explain why this method of investing is so incredibly exciting right now here is why let me take you back to 2015 reverse time lapse and we're here it was my first stock market drop experience I went from having a hundred thirty two thousand dollars dropped down all the way to a hundred fourteen thousand dollars which is roughly eighteen thousand dollars in the span of seven months now mind you at the time I was making roughly fifty you're probably 40k per year at that time so that's half of my annual salary gone in seven months maybe this stock market investing thing isn't for me I'm happy with just saving my money rather than risking so much of it you know it's not for me but luckily I kept going I kept buying more and a little bit more and it took a breather and I took a step back and I realized what I learned from that whole experience was sometimes it's okay to just sit back and not to make extreme decisions based on fear luckily the market did recover but two years later in 2018 I was about to be tested again and this time it was far worse at the end of November 2018 I was worth roughly a hundred seventy three thousand dollars and in the span of just three short weeks I went down to a hundred fifty four thousand dollars which is a loss of almost twenty thousand dollars to lose that much in such a short amount of time in just three short weeks drive a lot of people insane but luckily I had experience losing money so I was alright I kept on buying more in a time when a lot of people were saying this is the beginning of the end I called it you should have sold those stocks but it kept on going upwards and it recovered and I kept on buying more and more here's the thing as a dividend growth investor I feel good about being a grower not a shower I don't know what that means but I guess if I was holding on to Tesla stock and I bought it at let's say $900 I would be very tempted to sell it if it dropped down to 700 I'd be like I should have sold it you know what I'm gonna get rid of it now before it drops even further of course in the ideal world you would never sell your growth stocks because you are an investor not a speculator right but I'm just trying to demonstrate that it becomes a lot harder to hold on to growth stocks when you see a year's worth of progress gone in just one week unlike a dividend investor who is really happy when the prices go lower because my income will stay largely the same assuming the company's still profitable and it's making money and it doesn't cut its dividend I can hold on because it's gonna continue paying me passive income regardless of what that stock price actually is it's an incredible feeling and here's the thing that most people don't realize when you're buying stocks you're not buying stocks you're buying parts of a business and when you're buying them it's hard to see that because you're not actually seeing a physical thing it's just somewhere on your phone and when you buy a stock it doesn't feel heavier your phone doesn't get bigger like when you do with real estate you can physically see it so it becomes harder to hold on to it so always remember to think of stocks like you're buying parts of a business it's like imagine if your house lost ten thousand dollars in value tomorrow would you just sell it and panic no they'd be silly right you would just continue living in it it's still a house it's all the same thing you can still invite people over to Netflix and chill so fundamentally nothing is different there right but imagine if your house was a stock it would be so easy to sell the house it'd just be like swipe and now you're outside that'd be terrible right but another thing is imagine there's a dude standing outside your house constantly yelling at you about what he think your house is worth every second of the day just imagine two hundred five thousand three two hundred seven thousand to two hundred one thousand three hundred two hundred ten thousand two hundred two hundred twenty pounds okay so why is this all going on and what is going on exactly I always look at the smartest person in the room and right now that is Warren Buffett he did a sit-down interview with CNBC two hours long I watched the entire video so that you wouldn't have to and the biggest takeaway that I got from washing that video was this I don't think there's any way to predict what the stock market will do ten minutes from now ten days from now or ten months from now 20 or 30 years from now America business and probably all over the world will be far better than it is now Wow even the smartest billionaire has no idea what's gonna happen in the short term because if he knew he would sell all of his stocks he would wait until the bottom and then he'd just buy back in but he doesn't because he can't because no one can and if you come across somebody who claims to be able to run in the opposite direction and do not buy their course and if things like quantitative easing share repurchases negative interest rates are scaring you because you understand that they are propping up the economy then yes those things are probably helping but nobody including Warren Buffett knows what that all means in the long term for the economy all we know is that the government right now is trying to stimulate the economy by making people like you and I the consumer buy more stuff and they do this by making money cheaper to borrow so they want us to go out and buy houses cars and anything else we need to borrow money for and that brings me to the most important point of what Warren Buffett was trying to say and that is adapt your consumption to your income don't adapt your income to consumption basic financial minimalism and frugal core principles in a fancy way of saying don't spend more than you earn and don't be tempted to chase higher yield investments as interest rates could potentially drop even lower it's going to get tempting to go after cryptocurrency because that's where all the actions at and that's where you want to invest but doing this may potentially hurt you so please be careful and ultimately it begs the question if the smartest investor in the world has no idea what's about to happen then why did I make this YouTube video how pompous does my ego have to be to justify this video's existence why is anybody watching me it's ironic because the smartest guy in the world is like I don't know just keep buying stocks in the next 20 years and you'll do all right I love that but if you're one of the people who messaged me on Instagram saying Andre I sold all my stocks what do I do now here's what you should do if you sell your stocks because you're too afraid of losing money then remember this the stock market's biggest gains typically occur within a 10 day window period and if you miss those 10 days specifically six of those biggest ten days then your returns can be cut by as much as 50% what's crazier still is that those biggest returns typically happen within two weeks of the worst 10 days so if that didn't make sense just hit the j button on your keyboard twice go back 20 seconds and I promise it'll make sense but what this means is that we could see a horrible 10 days straight and then two weeks later see the biggest recovery that we've ever seen and if you miss that period just please don't miss it just don't don't miss it it's not worth it Bad News Bears here's what I'm doing if you're curious I'm not selling because I don't want to miss that train that is the recovery instead I'm using more of my money to buy more of those income-producing stocks because as a dividend growth investor I see opportunities everywhere and I'm so excited to buy more income producing assets so let me show you exactly what I'm doing if you open up the Robin Hood app you'll see exactly what's going on so I'm gonna look up Dao da L Delta Airlines and I've always wanted to own the airlines but they've been so expensive and I feel like right now they have been hit so hard just look at that graph in the monthly and the weekly chart they have been beaten up so much but do you guys think that Delta Airlines is gonna disappear overnight or next month just because of this I don't think so who else would we entrust our luggage to get lost Delta don't expect luggage to arrive I'm gonna look it up and I'm going to buy 20 shares of Delta at $49.50 the order was actually filled at 46 dollars and 27 cents remember to put in your limit order if you ever buy stocks on Robin Hood and this means that on top of the stock hopefully growing in value in 20 years I'm also adding a dividend income per year of 31 dollars and 28 cents also their dividend safety score is rated at 61 which is considered safe I think they'll do just fine they'll get through this mess and ten years from now they're gonna be worth a lot more and while they grow and share price they're gonna be paying me as a shareholder I'm glad to be an investor that sounded like a sponsored message totally wasn't the second stock I bought is ExxonMobil and I'm dollar-cost averaging into it and every time I bought ExxonMobil I've lost money on it but if I liked it at a higher price I should love it at a lower price makes sense so I bought exactly 20 shares of ExxonMobil at 53 dollars per share for a total of one thousand sixty dollars adding a forward dividend of 65 dollars and 40 cents and as usual once I buy the stocks I will plug in the ticker symbol how many I bought what the price was and it will automatically keep track of them it'll show me the sector the annual income and little things that I can glance at real quick to show me the growth I really like it self-promoting humblebrag because nobody sponsors my videos and while you're at it go ahead and claim your free stock from Robin Hood go download we Bowl fund your account $100 claim two free stocks one of which can be valued up to fourteen hundred dollars follow me on Instagram and above all please remember that I'm just a stranger here on YouTube showing you my personal finance journey and investing and that I have no clue what's gonna happen but I do know 20 years from now none of this will have mattered in the world will be a better place in twenty years from now you'll regret not having started today love you enjoy your weekend I'll hopefully see you lovely people back here on Monday Friday I'll see you soon bye bye

Channel: Andrei Jikh

Views: 876,268

Rating: 4.9298267 out of 5

Keywords: how to invest, how not to invest, advice for beginners, investing for beginners, stock market, how to start investing, stocks for beginners, robinhood app, how to, invest, robinhood, stocks, stock market for beginners, dividends, dividend, andrei jikh, Passive income

Id: uB6guymgX3w

Length: 16min 7sec (967 seconds)

Published: Fri Feb 28 2020