Recession Investing
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- Опубліковано 31 лип 2024
- Many people are worried that the US and the UK are going into a recession, so how can we position our portfolios to be protected from that kind of economic storm? In this video, I show you how to invest in a recession and look at the likelihood of it happening by digging into an interesting new Fed model that shows us that the probability of a recession in the US might be higher than we thought.
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Timestamps
00:00 Introduction
00:32 Recession Returns
06:57 Government Bonds
09:45 US Recession?
19:43 UK Recession?
21.43 Conclusion
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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.
#Recession #Investing #PensionCraft
This guy is either the calmest smart guy or smartest calm guy ... either way he's good.
Exactly , I’ve been saying this for a long time we should stop worrying about what is coming instead prepare for when it comes .The market always recovers, take for example the 08 crash the market still bounced back , it might take long but it will definitely.
wow the data and research for free is insane, especially the recession returns portion. thank you!
Glad it was helpful!
One thing you missed is that cash should always be USD, NOT GBP. GBP pretty much always crashes in a recession against the dollar.
Excellent! Thank you!
You are welcome!
?
Is Vanguard 100 equity a good idea during recession? I am investing for long term. I figure: It should be cheap to buy, so i should be buying it as it is falling. Main idea: i do not intend to sell at all during the recession. I want to be buying it while its falling down, so that when there is growth again, my total assets will skyrocket. Does this make sense? Or am i an idiot?
Yes I think that what you are suggesting sounds reasonable but bare in mind that no one can predict which direction the markets are going in. Might be worth considering buying in increments over the next year or so.
The author of this page has mentioned. In a recession, risk assets are the one's that suffer the most, so focus on these type of assets as an investment for long term.
@@Cessarini1 Yes, thats the idea. These assets are stocks, right? And Vanguard 100 exposes the ones that drive American economy. So it should be a good bet for anyone who does not intend sell during recession and would want to take advantage of markets falling.
Maybe a video on how bad things have gone in the past so to know when to buy during a dip. Last video you said we were not there yet.
Ramin's data presentations always convinces me. (Glad that Gold - the best asset class performer in 2022 - gets a mention!).
Doesn't beat PDBC - commodity fund
@@stopato5772 I'm afraid your wrong...
1 year, XAUGBP= 12.5%, PDBC= -9.69%.
6 MONTHS: XAUGBP=4.85%, PDBC= 3.1%
Has beaten Gold over last 3 months due, dare I suggest, to bank paper price suppression.
But Gold will be the winner anyway after the inevitable and impending European or UK debt crisis 👍
@@stopato5772 Of course oil (say USO) and Nat gas (say, UNG or NGAS) have been the real winners at 95.5 and 61.2% respectively over 1 year.
Gold isn't an asset class, it's commodities and the best performer was natural gas at 183% increase up to July 29 2022
Given rate increases when do you feel annuities start looking value?
Great analysis
Thanks @BlueDunn
15:20 shots fired! :D
Thank you!
You're welcome!
First Q1 was down 1.4/5 GDP on 28/7/22 the next update on the Q2 is out. To summarize 2 out of the 3 months saw indicators of possible Q2 dip. We have to wait then, following that 6 months later Historically it hits the UK.
Observations on recession chances. Inflation model input should be adjusted so it's at least consistent. 8% now is actually 15% if same 1980s valuations are used. Interest sensitivity also needs a thought. The concern here is the refinancing impacts. Again in the 1980s period when rates went from 6% to 18% i.e. factor of 3 increase in effective repayment/refinancing costs. Today this simply means a shift from 1% to 3% will induce the same pain
What you DON'T want is to buy an asset thats a falling knife and lock in your purchase without generating returns such as dividends higher than interest rate. Then it becomes lazy capital which generates zero returns during bear market until the market recovers. Might as well earn interest from cash with the power of compounded interest and switch to equities when the markets recover.
I am short BX and M Should I just hold on until after the CPI data in juli ? Or just take my losses and move on
Yay!
Who says cash is not an ideal investment in a high inflation environment? That's when interest rates return are high compared to equity or real estate losses
short term US treasuries are paying around 4 % currently, short of inflation but certainly safe and better than cash
💫
Great content, thanks Ramin
Glad you enjoyed it
I like this vid. Good insight.
Thanks
great content and thank you
Very welcome
Been enjoying your videos.
Thanks so much
Is buying index funds weekly a better idea right now, than monthly?
Hi @S Gist interesting question! More frequent investing effectively exposes your capital to market returns sooner. In a rising market that's beneficial, in a falling market it's worse. So if you had a time-machine... Seriously though I think it probably doesn't make a lot of difference. The important thing is to keep buying, particularly when valuations are lower. Thanks, Ramin.
@@Pensioncraft thank you, so long as I am not charged any more in fees I guess yes likely makes no odds, all I am doing is splitting my monthly amount into 4 weeks ;-)
Nasdaq was going up last week
I suppose that's just some temp rally ?
nice
Thanks @Daniël
What is a good safe haven option for my 401k funds that are currently just sitting in vanguard as cash?
Well if you’re not a bot I would say index funds and set trailing stop in case they fall 10%. They are going up now so trailing stop will protect your money gains theoretically! That’s my plan!
@@newbeginnings9457 beep beep boop beep beep!!!!! Bot says stock market will go back down
@@LinhTran-ps9pu well, why are you asking then if you know all the answers? Keep it in cash forever! 😆
Meanwhile the economy... They can't find your next step if you do not know it yourself.
Incredible insight!
thanks glad it was helpful
How much lag, if any, is there between stock market returns and an actual recession? Is there anything to say from a historical perspective how returns relate to the economy going into recession? In other words, how does the stock market anticipate a recession c.q. economic boom?
The stock market has historically been a leading indicator. The Market tends to sell off and recover before a recession / recovery materializes.
Double down your monthlys lads
Excellent
Thank you so much 😀
I'm buying as much as I can, everything I can afford!
4min: It's a shame base metal miners were not included in this.
Hi @John Ashmore good point, I should have included them or at least mentioned them. Thanks, Ramin
13:09 The Fed Reserve uses LaTeX to typeset its documents!
Ramin, do you have any idea why the median monthly return for oil is higher in your boxplot comparing other asset classes (mostly country indices), i found that a bit intriguing. Just compensating the bigger drops during recessions?
I can see some ggplots charts in your video:) It could be interesting to see some predictive models/ simulations as well
Noted!
What a great and informative video, Ramin. Many thanks 🙏
My pleasure!
Thank You too to provide information. God Bless You Always
Our pleasure!
indices around the is so highly positive correlated. more so since 2008~ ish.
I still remember back then when facebook was just born, and google wasnt as refined/efficient as now. around 2008ish~ when the internet growth is so accelerated. everything just moves together.
i think its due to the algorithmic trading...
from studying the indices, the only thing i have noticed is Japan Nikkei never really recover from 1980~ crash. comparing to snp500
Hi @E Dan I think investors forget nuance and simply reduce risk during these crises. That would explain the higher positive correlation among risky assets like equity during these episodes. The factor responses are pretty interesting this year as income has actually fared okay, so you could have threaded the needle at the beginning of the year but frankly I doubt many people did that. Thanks, Ramin.
I am a capitalist not a speculator. Does Apple computer liquidation and stop operation during recession? No
Does Cisco million dollars equipment which keeps internet working stop working in a recession? No, yet Cisco has never recovered from the high of the Dot Com bubble. The price you pay has major influence on the future returns.
Phew! That was a lot of charts.
True @stevo728822 - I like graphs! But they tell a story. Thanks, Ramin.
I do feel like it is much harder to make money in this market unless you are actively trading but it's not my preference
Why, everything is on sale?
This is the best time to invest in the market.
Only hard to make money if you expect a return on a short timescale (weeks to months).
I invested, got burnt and sold. It’s not for the faint hearted… :( I don’t have the skills nor time to follow the market.
@@sookchia7638 You need to think in terms of years. No need to be worried what the market does in the short term.
You don't need to make money each day / week. Think in years and you'll be fine.
One of my favourite channels for months now. I'll try promote you as much on my channel as I am tired of 99% of the nonsense on YT finance these days.
10:25 I think the Q1 US GDP reading was negative before adjusting for inflation. Are the two consecutive negative readings used to determine a recession based on YoY Real GDP?
Hi @Ryan Parry the definition for the US is "a significant decline in economic activity that is spread across the economy and that lasts more than a few months" which you'll find here www.nber.org/business-cycle-dating-procedure-frequently-asked-questions#:~:text=A%3A%20The%20NBER's%20traditional%20definition,more%20than%20a%20few%20months. Thanks, Ramin
Shame the spam bots have taken over the comment section
Hi @HonestSonics we're running this spam deleting software several times a day github.com/ThioJoe/YT-Spammer-Purge but some still get through. Thanks, Ramin.
I hear people ask if this is the right time to invest, yes because the stock market have always and will always be a volatile market, that is why it is important to have proper research, analysis and strategy when investing
The market is so volatile now to be depending on bull run to make profit or investing without guidance, I advice everyone to trade now with a working program with like that of Laurel Michelle Packham, so far she is helping me find investment that has significant growth potential which bring high returns and profits, i am so happy finding her.
Investment is the key to wealth but wrong investments can leave you scars, be careful out there what and how you invest and if you do not have enough experience or expertise, contact someone who does. The goal is to make profit and grow, not just to invest for investing sakes.
Given that gold has corrected in price since March your thesis that gold is a safe haven asset is surely quite a weak one. If UK inflation goes to 11% this autumn as predicted by the Bank of England then given the very soft UK bank rate hikes you are talking quite awful real interest rates for Britain which unfortunately means you are likely best off holding assets in a stronger economy.
If we're investing for the long term, is the best strategy still not simply to ignore what's going on in the market and just keep buying global equity?
Yes
Great video and much needed for our times, thank you for producing it! I think recession investing and the ideal strategy to deploy completely depends on the context in which you live within. If you have time on your side, then invest and use this recession as an opportunity to buy high quality stocks as they are discounted. Now if you do not have time on your side as you near retirement, be cautious and invest into I-bonds or sit on your cash, but be safe. We are certainly living in unprecedented times, that is for sure!
You think this bull run will last ? And if so we’re so you see it topping out ?
Shmetah year 26th September predictable crash don't need chats other than 2008 2001 2015 crashes
Antonmursid🙏🙏🙏🙏🙏💞🙏
Another great video. Thank you for your effort.
My pleasure!
"So what I would say to profplum99 is simply to calm down." Bahahaha. Getting smacked by the calm and even PensionCraft must especially hurt.
8-)
Cash, gold, land is not bad… go away cryto, equity for a long…
Ramin rules! Nobody puts things in context as you do. Thanks a lot :)) Question: Consider one aspect of the Gulf war (1990-1991) as similar to Ukraine´s invasion today. (A tirant invades neighbouring country creating war in a commodit-critical region) Could you draw any estimates of any kind on that? Consequences on the world economy or financial markets?
Abrazo
This bear market is a prime example of why we should have a strong foundation built & cash position in our investment portfolios. Allows you to handle the volatility more comfortably, giving you a peace of mind & take advantage of high-quality companies at a discounted price.
Truth! I always keep emergency cash for
expenses and more to take advantage of dips.
@@luis-gabriel1 that's true, I have made some much losses trading and investing on my own but since I started trading with Mr Ryan J Thomas after meeting him on a conference in Florida, I have been making good amount of income bi-weekly, he's really a good man
Illogical.
Keeping cash means not paying the optimal amount of your investment money into the stock market, which is in a bull market around 75% of the time.
It’s nothing but arrogant and entirely pointless thinking you can accurately call a ‘dip’ at its bottom and that it has finished dipping, as well as allocating the correct amount of your ‘dip’ cash to that dip, and also assuming that this would amount to more than if you had just divided ALL your free cash up over those 75% bull runs rather than the 15% bear market ‘crashes’.
Consistency is key, anything else, asides from those having fun trying to play the game, is almost always going to screw you over financially.
Antonmursid🙏🙏🙏🙏🙏💞🙏✌
Gold at zero. Great inflation hedge.
Guys a hack. We are already in a recession
Hi Connor, the "hack" would genuinely like to know what evidence you have that the US is in recession right now, preferably data that's publicly available on FRED. Thanks! Ramin
@@Pensioncraft 20%+ inflation, record petrol and energy costs, rising rates. Wages not rising in line. Gov and boe incompetence. maths dont lie. 😂
@@Pensioncraft A month later, do you still doubt the recession?
@@Pensioncraft If you can't tell we are already in a recession, are you really qualified?
Antonmursid🙏🙏🙏🙏🙏💞🙏