Why Millennials SHOULD NOT Buy Stocks

the stock market has been one wild roller coaster when the pandemic first hit we saw our stock market crash faster than we've ever seen happen in history and then we saw the stock market boom faster than ever in history and now our stock market is breaking new highs which is why if you are a millennial you want to understand what's going on before you just throw your money in the stock market what's up everybody i am desperate singh from the minoritymindset.com where money minds rethink rich the thing that makes our stock market right now more unique than ever before besides just the crazy roller coaster that we've been seeing is that we have more retail traders more non-professionals investing their money on the stock market right now than ever before which is why you have articles saying things that millennials are changing the stock market now i'm a money nerd i've been here on youtube telling people to invest their money and be smart with their money for years so i love the fact that people are opening their first stock brokerage accounts i love the fact that people are getting interested in investing i love the fact that people are getting interested in learning about companies and investing their money into companies instead of just spending all their money at companies but there are some risks here that i want to make sure we're on the same page on that's why in this video i'm going to be going over the reasons why millennials should not be buying stocks but before i get into that i need you to do me a quick favor and smash that thumbs up button below and i also have some exciting news because this year i am going to be the keynote speaker at fincon in austin texas vincon is the largest financial media conference in north america so if you're interested in finance and media if you're a youtuber a blogger a podcaster and you want to come hang out you can join me in austin texas september 22nd to the 25th so i got the link to how you can join that in the description below and i also have a discount code that you can use if you type in fc minority mines you're going to save some money as well so if you want to come hang out i'll see you in austin texas in september if you are a millennial the first reason why you should not be investing in stocks is if your goal is to get rich quick we saw this massive boom of retail traders retail traders are people who are not professionals so we saw this massive boom of retail traders as soon as the pandemic hit because everything was shut down casinos were shut down and people had nothing to do and so now you had this kind of new wave of people that were like hmm maybe instead of me going to the casino i can start throwing my money in the stock market and so a lot of people started investing their money in stocks and a lot of people started making money very quickly and so this has given some people a perception that you can make money very fast in the stock market consistently which is not a bad thing yeah you can make a ton of money in the short term in the stock market but it is nearly impossible to consistently get huge returns year after year after year in the stock market by being a trader you remember when the whole gamestop saga happened right we had some smart people that realized that gamestop was so heavily shorted so they came in and they started buying then they started posting that they were buying the stock that was heavily shorted on reddit and then you had all these other people that started buying gamestop not because they believed in the short squeeze but because they were just hoping to get rich quick now i get it part of it here was to give the middle finger to wall street which is fine but you also had a lot of people that were buying just to get rich quick you saw the same thing with currencies like you know dog coin dogecoin dogee coin whatever you want to call it because people are buying this coin which started off as a meme just because they're hoping to get rich quick and so you have a lot of people in the market that are leveraging up their investments hoping to make a lot of money very quickly now i'm going to say this again you can make a ton of money in the short term you can make a lot of money trading stocks in the short term but if you want to keep this money and you want to grow this wealth over the long term there's a different strategy for doing it and that's not trading stocks the thing that i'm worried about more than anything else is that between 2020 and 2021 we have seen the stock market after the crash pretty much go up straight like this and so you have a lot of people that have seen a lot of gains and everybody is a financial genius in a bull market because all they've seen is stocks go up and so everyone gets kind of like envious because they see all their friends making a lot of money and they see all these random people on the internet making a lot of money so they think why can't they do it too and then you throw your money into random stocks you see it go up and you're like wow i'm pretty good at this whole stock market thing and when everything is going up it is easy to make money but as things slow down that's when you can see who's a good investor and who's a bad investor or as warren buffett likes to say when the tide goes out that's when you see who's been swimming naked the reason why i bring this up is because long-term investing has never been the attractive thing to do it's never been the hot thing to do this is one of those things that can make you money over the long term the hot thing to do is to be a day trader to find the hot stocks and to throw your money in there and hope for double money very quickly and that's good if you can do that but we have this kind of whole generation of people maybe not a whole generation but you have a lot of people that have this kind of belief that making a hundred percent returns is completely normal in six months or a year and so people look at seven percent returns in a year and think what the heck is seven percent and this is my concern because people have kind of gotten into this gamification gambling mindset of investing because a lot of our newer stock brokerage apps like robinhood they have gamified the stock trading process because now when you purchase a stock what happens you get confetti and so you feel like you're playing a game and so we have this kind of gamification where people think i can make a lot of money very quickly because people have been making a lot of money very quickly but this is kind of just what's going on right now no market can go straight up forever and so if you get caught up in the belief that you are a genius trader because you made a lot of money over the last 12 months and all you've seen is a market going like this and you just keep leveraging up your bets and you just keep making risky trades because you keep doubling your money very quickly eventually you get to the point where you roll the dice one too many times and now you lose and this brings me to the second reason why millennials should not be investing in stocks is if you are not prepared to lose mentally every successful stock market trader will tell you that making money in the stock market is just as much strategy as it is psychology because if your mind cannot handle seeing your portfolio in the red or if your mind gets greedy when things start to go up you will not have a chance to make money and if you do make money you will not be able to keep that money because now you get greedy everybody even warren buffett loses money on certain deals it's just a part of the process okay you have to accept that if you want to be a trader or an investor now once you get over that you're gonna have to go through a few losses that way you can learn it's just the tuition of being a stock market trader or investor this one sounds easy in theory but it's a whole lot harder to practice because if you invest a lot of your savings into the stock market and then you see your stocks go down 10 all of a sudden you saw your ten thousand dollars go down to nine thousand dollars and if it keeps going down you start to panic it's very easy to glorify the stock market wins but a lot of times you don't see the pain that it takes to get there like everybody talks about amazon they say things like if you just invested a thousand dollars into amazon when they first went public you would be a multi-multi-millionaire but what they don't tell you is if you would have invested that thousand dollars on amazon you would have also had to see your thousand dollar investment drop by 90 percent and you would have to still keep your money and not lose faith and not panic and not sell not a lot of people have that mental discipline to see their investments fall by 90 percent and then still stay in the game because they believe in what they're investing in now don't get me wrong here i'm not saying that you should hold every investment no matter how far down it goes you got to pay attention to your investment you got to pay attention to your company you got to know what you're investing in sometimes the company is going to go bankrupt and you want to get out as fast as you can but what i'm trying to get at here is there's a lot of emotion that's involved with stock market investing in stock market trading and you got to understand that going in and if you're not able to handle that emotion you should not be trading stocks if you do still want to be involved in stocks and you know that you emotionally cannot handle that then you should be a passive investor passive investing is where you find a few etfs and every month or every couple weeks you just deposit some money into these etfs and you never look at it you just let your money grow and compound over time so you have to know and understand yourself if you are interested in learning more about passive stock market investing and some of the different types of stock market strategies that there are our team put together an amazing stock market pdf that will walk you through that this pdf is completely free when you sign up for our daily newsletter so if you want to to do is give downl a basic savings cushion so if you don't have at least two thousand dollars saved up in a savings account do that first because life happens sometimes your car is gonna break sometimes your ac is gonna go out sometimes your window might break so you wanna make sure you have a savings cushion that we don't have to go into credit card debt when an emergency happens the second thing you got to do before you start investing your money in stocks is you want to pay down your high interest debts these are things like credit card debt because if you're paying 15 a year to your credit card company and the stock market on average grows by eight to ten percent a year you're going to get a better return by paying on your credit cards than you will by investing your money in the stock market plus investing your money in the stock market has risk versus paying down your high interest debt there's a guaranteed return so it is not worth it for you to start investing your money in the stock market when you're getting skinned alive by a credit card company once you get those two things squared away the next thing you want to understand when it comes to putting your money in the market is you do not want to invest more than you're willing to lose in 2020 i made a video this was super sad when it happened it was a 20 year old kid and he started trading money in stocks and he was trading options and he was using leverage and something happened with his account where he thought he was down hundreds of thousands of dollars and because that happened he felt like there was no escape he thought he'd never be able to pay this money back and so he took his own life and so money is real stock market trading is real and so you got to understand that if you're investing your money in the market this is money that you might not get back there is a risk to investing your money in the market which is why i always say that investing your money has risks you are never guaranteed to make money when you invest you might even lose money which is why you should always do your own due diligence and never blindly listen to a random guy on youtube there's a lot of crap out there on the internet with people promising these hopes of super high returns and all you gotta do is start with a hundred dollars or a thousand dollars and now you can leverage up your investments 10 fold or 20-fold and now you're using all this debt and you've never traded money before and you just think that if you just use all this debt you're going to be able to make so much more money because now you're using other people's money to trade stocks even though you're not good at trading stocks yet and so now you are using all this money that you don't have that you cannot afford to lose and now if you lose not only do you lose your own money but you owe money to your broker the first thing you got to do is you got to get your personal finances in order second when you start investing or trading for the first time use your own money learn how it works there are ways for you to use debt strategically in the stock market you see institutions and professionals do this all the time that's how they can make so much more money because they're using millions of dollars of other people's money but before you get to that level you got to understand how the process works you cannot compare yourself a level one to somebody else's level 200. i want you to be a smart investor that can make money now and that can keep your money and compound your wealth over the long term and the only way that you can do that is one if you see if you understand how to use your money and if you understand how to invest your money in the right way and so you when you come in you got to understand how the process works so don't go in as i'm throwing in all this money that you cannot afford to lose right now and one of the easiest ways to do this is just to think of the money that you invest as gone think of this money as it just disappeared into thin air now if you do that and you make money now you just found brand new money and if you lost that money because you're learning well you already told yourself that you had lost that money and it's not going to hurt as bad now that you understand the reasons why you should not be buying stocks let me go over the reasons why you should be buying stocks that way you really understand where you fall in this kind of equation the first reason why you should be buying stocks is if you want to grow your money notice how i didn't say get rich quick and there are ways for you to make money in the short term there are also ways for you to make money over the long term but if your goal is to grow your money you can do that through the stock market because now you can take your money and invest it into companies so you own a piece of these companies and as these companies grow so do you and this brings me to number two if you want to invest your money in stocks and do it successfully you also have to have a strategy when it comes to growing your money so kind of like i mentioned before there's a couple different ways that you can make money in the stock market on the broad level you can make money over the long term and then you can make money over the short term so your short term people are your traders your long term people are your long term more kind of fundamental investors let me go a little bit deeper into these when we talk about making money in the short term this is when you're buying and selling a stock within less than a year there's a whole bunch of different short-term investing or trading strategies here you have day traders you have people that are looking at momentum you're people that are swing traders and so you have dozens of short-term strategies and so you want to find the strategy that's best for you so when you think of short-term trading these are the people that are looking at stock charts these are the people that are looking those candles and those really casey and fancy looking charts because they're trying to find the next kind of breakout the next opportunity where a stock is going to rally very quickly with this short-term trading you can make a lot of money in the short term and you have to understand that in this there's also more risk because you're looking at things you're looking at momentum you're looking at charts to see where you think the stock is going to go over the next three months over the next 30 days or over the next three hours here on the long long-term side you don't really care too much about the charts if you are a long-term trader what you're looking at is the underlying value of the company you're looking at the numbers now you're looking at the fundamentals you're looking at the profit you're looking at the revenue you're looking at the cash flow you're looking at the new products that are coming out you're looking at the executives so you're looking at a company and you're looking at okay i think this company has a lot of room to grow in the profit and i think at its current stock price this company is undervalued i think this company is worth more than three billion dollars or whatever it is right now and so because of that and because of the new future potential you want to invest in this company and you're going to invest it for the long term which is at least one year many times when people talk about a long-term analysis this could be in a decade or multiple decades and so when you're looking at companies and you're buying them for the long term you want to find an undervalued company and hold on to it for a long time and so even if a company goes down you're not going to be selling here because you believe in the long-term value of the company now you want to make sure that you're keeping up with the earnings calls you want to make sure that you're keeping up with how much money this company is making because if something changes then you might want to change your strategy but the issue that so many new investors and traders have is they don't understand the difference between long-term investing and short-term trading and so what do they do they come in and they think okay i'm gonna find some great companies that i believe in and i'm going to be a long-term investor and then something goes wrong the stock starts to go down a little bit and then they panic and then they sell now all of a sudden you went from a long-term investor to a short-term trader because you panicked and you sold so it's a psychology kind of like what i talked about before and so you have to understand if you are a long-term investor and nothing has changed fundamentally just the stock price has changed then you gotta understand where you are in this equation likewise here if you are a short-term trader and you're looking to make money in the short term and this company shoots up 50 percent now you tell yourself yeah i hit my goals of where i wanted to sell but i think this company is really good and i think the stock is going to continue to go up so why should i sell right now and so you hold on to stock longer than you think and then what happens is the stock price corrects because it went up way too fast way too quickly and then the stock price starts to go down and now you lost out on a big chunk of your profits what you have to understand is you can be right about a company and still lose money and so when you're investing your money in the stock market you got to understand that stock prices don't always equate to what's going on with the company right now and so if you're investing your money here or here you have to understand what's going on in the stock is different than the company which is why your strategy is so important and you have to know this before you actually go in because you want to know when you're going to sell and what is going to be your kind of risk parameters because if things start to go bad are you going to sell here if the stock price goes down you might not want to sell it because that might be an opportunity for you to come and buy more but here there has to be an exit strategy because if you're investing for the short term you don't want to get in love with the company you're just trying to make your profits quickly and the third reason why you should be buying stocks is if you are ready for the emotional roller coaster if you're ready for the ride you already beat half the battle when it comes to putting your money in the stock market now all you got to do is figure out your strategy are you a trader do you have time for that if so what is going to be your short-term strategy and how are you going to follow through with it if not then if you're going to be a long-term investor what type of companies you want to invest in how do you find these investments if you don't want to put in all the work to find the right companies then you can invest in etfs and etf is a basket of stocks that way now you don't have to do the work to keep up with one company or two companies now you can invest in etf where you have exposure to a whole bunch of different companies and you have etfs that give you exposure to the whole stock market you have etfs that give you exposure to certain sectors like the tech sector or the health care sector or dividend etfs and so once you know what type of strategy you want now it's all execution but this is one of the toughest battles that most people do not talk about when it comes to putting your money in the stock market because you have to be mentally ready for the war that you're going to fight when things go up and when things go down because when things go up you don't want to get greedy and when things go down you got to know when it's time to sell and cut your losses if you enjoyed this video here's a video on how to start investing in stocks that i think you love and while you edit download a free stock market pdf and as always keep hustling but in the long run what really affects the stocks price is its fundamentals that's how much money is the company making how are their profits looking are their revenues growing are the profits growing how is the management and are they innovating for the future so these are the things that really affect the company's stock price over the long term

Channel: Minority Mindset

Views: 172,902

Rating: 4.9005313 out of 5

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, STOCK MARKET INVESTING, investing in stocks, stocks, investing, investing for beginners, stock investing, trading stocks, stock trading, investing in stocks for beginners, stock market 101, stock market, etf, index fund, how to buy stocks, buy stocks, invest in stocks, trade stocks

Id: xD0sKC58asQ

Length: 18min 0sec (1080 seconds)

Published: Mon May 24 2021