I Just Lost $1.5 Million In Stocks

What's up guys, it's Graham here. So let's be real, everyone always talks about their wins or how they knew and predicted that some obscure event was going to happen in the future. But in a market like this, I think it's really important that we talk about our losses because, as any investor will tell you, it's a normal part of investing. Throughout your lifetime, there will never be a scenario where you're always perpetually up year after year, and this is one of those times.

Since the top of the market in November of 2021, my stock and crypto portfolio has lost about 1.6 million dollars of profit, falling about 20% from the peak. Even though there were some days that my account would fluctuate plus or minus three hundred thousand dollars, it's evident that 2022 has been a rude wake-up call for a lot of investors. So in full transparency, here's an update on my portfolio, the account value since my last video on November 24th, 2021, and what I'm doing from here on out. Since I believe these next few months could be a tremendous opportunity, I also have to say a big shout out to BeAhead for inspiring me to make this video. A link to his video is down below in the description, where he talks about losing five hundred thousand dollars throughout these last few months.

Hopefully, this type of transparency gives you the assurance that losses like this are normal; they're not something to shy away from. And if anything, you can make a whole lot of money from it if you play it right. But before we start, if you appreciate this kind of video where I break down my entire portfolio, it would mean the world to me if you subscribed or hit the like button for the YouTube algorithm. Doing that helps out my channel tremendously. As a thank you, here's a picture of a really cute baby koala. So thank you guys so much! And also, a big thank you to public.com for sponsoring this video, but more on that later.

Alright, so in terms of stocks, I'm not exactly sure how I should best break this down because I've been continually buying into index funds for over a decade now. But I've never really invested a substantial amount of money into the stock market until March and April of 2020. At the time, I was sitting on a decent amount of cash, waiting for a good real estate deal to come up. But when the economy tanked and everything shut down, I saw this as a good time to deploy that money into stocks, which I felt were oversold and had the potential long term to go up back in value.

That consisted of about 50 percent of my portfolio, spread throughout a few dozen individual stocks, and the other 50% spread throughout several index funds that track the S&P 500, small cap, and international markets. Of course, I never would have expected the market to have recovered as fast as it did, but by and large, the vast majority of my money kept going into buying the exact same index funds on a regular basis, month after month. That's partially the reason why I rarely ever get portfolio updates; I just know a video about "Hey guys, I just bought some more VT Sacks again." It was the same thing as last time, but I bought more of it.

Time in the market beats timing the market. That just means I've consistently been adding on to my core index fund positions through the ups and through the downs, varying amounts depending on how much money I make. And throughout the last year, I've been in a very fortunate position to have been able to invest more money this year than I was able to last year, raising my cost basis throughout my entire portfolio. Of course, that also means that, with the S&P 500 down seven percent year over year, every single position that I have made throughout the last year is down anywhere between six and eighteen percent just for the mere fact that I have dollar-cost averaged on a regular basis, which is statistically what you're supposed to do if you want to make the most amount of money long term.

So in terms of my stock account today, let's talk. So like I mentioned back in April of 2021, I broke down my largest accounts, including my biggest returns, my worst returns, my largest holdings, and my riskiest holdings so you could see exactly how I invest. This is meant to be a fun video to break down my non-index funds; although throughout the last year and a half, I've really done not much else other than accumulate more index funds and moving some of those individual positions and buying, yeah, more index funds. Then in November of 2021, which just so happened by luck to be about the top of the market, I made a video about selling my losing positions to offset the taxable gains in my profitable positions, known as tax loss harvesting.

This basically means that a ten thousand dollar loss wipes out a ten thousand dollar gain, allowing me to remove myself from various positions without paying any tax on that profit whatsoever. At the time, I cashed out about half of my portfolio of individual stocks and moved it all over to an index fund that covers small, medium, and large-cap stocks in the U.S. In hindsight, even though I certainly lost money in those index fund purchases, I would have lost a lot more money had I kept those individual stocks as normal. Throughout the entire process, I came to the realization that I hate investing in individual stocks.

Even though it was certainly fun throughout the pandemic, I made sure to still invest the bulk of my money throughout well-diversified index funds. I couldn't stand watching one stock's fluctuating price over the other with a nagging sensation to keep an eye on prices. I would have been better off had I just started investing in index funds from the very beginning. Right now, I'm currently holding on to just over a dozen individual stocks that I'm willing to take a risk on because they make up a small part of my overall account. But by and large, the more money I make and the more money I invest, the more I value the peace of mind that comes with buying one fund that covers everything and then being done.

Now yes, that index fund is down about 20% from the peak, and everything that I bought over the last year is at a marginal loss. But surprisingly, my international ETF is holding up the best, only down 12% this year. So basically, when it comes to stocks, yes, I am down about one and a half million dollars from the peak. But I'm not changing a single thing. I'm using this as an opportunity to lower my tax basis, re-balance my portfolio to a few core positions, and that's it. Rise or fall, this is a part of investing, and in the grand scheme of things, it's nothing to be worried about.

However, as I say that, we do have to talk about my real estate holdings because this is where things get interesting. Although before we cover that, listen, I know how much it hurts to watch your portfolio drop in value and see a year's worth of profits wiped away in a matter of weeks. But if you're a long-term investor, these declines could be seen as a potential opportunity, and that is where a sponsor public.com comes in. Public is an investing platform that helps people be better investors. They have a ton of educational content in the platform, which I find to be extremely helpful in these market conditions.

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Now with that said, let's get back to the video. Alright, now in terms of my real estate, as some of you know, I've been investing since 2011 when I began purchasing rental properties throughout San Bernardino County. From there, I slowly expanded throughout the mid city of Los Angeles, and I currently own eight one to three unit buildings fully rented out with a market value anywhere between 9 and 10 million dollars, depending on the demand. Now of course, I keep a close eye on the real estate market since, by and large, it's still my biggest investment, and I see what's happening every single day throughout housing values.

Rising interest rates have absolutely thrown a wrench in the ever-appreciating housing market that frankly was unsustainable to begin with. There is no way that housing prices could continue on the trajectory of increasing 20% year over year without eventually slowing down, and that is what we're beginning to see. Even though inventory is beginning to increase, housing values are still going up, albeit at a slower pace, suggesting that most likely the largest price increases are behind us, and we will begin to enter a time of somewhat normalcy.

In terms of my own holdings, though, I'm happy to say that they've all held up tremendously well, and my only unexpected event was filling a last-minute vacancy from a tenant who decided to move out of state. Besides that, my real estate philosophy from the very beginning has always been to buy a good deal with the intention of holding on to it forever. And when I have such a low property tax basis combined with insanely low mortgage rates, there's very little incentive for me to sell. So overall, fluctuating real estate values are not going to have any impact on this part of my portfolio, and if anything, I'll continue to go and buy good deals if and when they come up.

For example, I partnered with Ryan Pineda to buy a 44-unit building in Phoenix, Arizona, with strong demand in a good location. On top of that, there's also value to add in terms of improving the property, adding additional features, and otherwise just making it better. So these are the types of deals that I'm diversifying into alongside everything else. By the way, if you're an accredited investor and you want to partner alongside with us, I'll link to all the information in the application down below in the description.

That's why I believe that at the end of the day, if your goal is to buy an undervalued property that you could fix up as a long-term rental, then any month-to-month fluctuations in price are really not going to make that big of a difference. And that is why I'm just continuing to buy and hold as usual. Of course, beyond that, we also have an investment that I really don't talk much about, and that would be private equity spread across several startups in the fintech space. This is where I invest and supply funding to a growing non-public company, and I've taken a huge interest in this because it involves the companies and the apps that I use on a daily basis.

Now unfortunately, I can't disclose exactly how much I have throughout each company, but I will say it does include the likes of Yada Bank, Public, Creative Juice, two startup credit card companies, and a few others that I can't mention quite yet. The total value of these investments is anywhere between two and five million dollars on paper, and it's very difficult to calculate just how much the recent downturn has affected valuations. But I will say Y Combinator just issued a warning to startups that they'll have to prepare for the worst, and I tend to agree. Their advice was to stockpile reserves, expect venture capital will dry up, understand the last two years were not indicative of a realistic market condition, and realize that maybe if you raise capital over these next 12 months, you're doing so probably at the worst possible time.

For myself, the majority of the companies that I've invested in are large enough to be able to run on their own, but I also acknowledge that private equity is extremely illiquid. Anything can happen, and for my own calculations, I just mentally assume they're all going to be worth zero. That way, if anything better than that happens, it's great, and if nothing else, hey, I didn't expect it to begin with. As far as my other alternative investments, their value is much harder to track. My Ford GT, for example, was purchased in early 2021 for 306 thousand dollars, and now comparable cars are selling at auction for over four hundred thousand dollars.

My Tesla Roadster was another example where I sold out of some of my Tesla shares at one thousand twenty-eight dollars and then plunked the money down into this. It's still too early to tell how their value is going to hold up over the next five to ten years, but until that point, I'm just going to enjoy it. On the other hand, my Bitcoin and Ethereum portfolio has taken a rather substantial hit since their peak in November of 2021, and for the first time in a long time, I am below my cost basis in the low 30s on Bitcoin and two thousand dollars on Ethereum. However, all of this makes up less than eight percent of my entire portfolio, and in the big picture, any fluctuations do not have any impact on my strategy.

I'm simply buying and holding on a consistent basis, and long-term, I see this as a high-risk, high-reward opportunity with money that I could afford to lose. I'm also working to expand into the franchise business in a way that I believe should do exceptionally well, even throughout a recession. As long as everything goes according to plan, I should be able to make a video on this in the next two to three months, so if you want to be a part of it, make sure to subscribe so you don't miss that video on how this plays out.

That's why this year my overall plan is to plan for the worst and continue to dollar-cost average into the markets on a regular basis. I know that's the same advice I keep talking about in every single video, and I sound like a broken record, but that's the truth. When you really get down to the fundamentals of investing, it's boring; it's not exciting. Sure, I did lose about one and a half million dollars in profit, and I'm down about 20% from the peak as the entire market's fallen, but it's not a reason to panic. If anything, it's a great opportunity to lower your cost basis, get a better deal, and gain some really valuable investing experience.

I think so many people became disillusioned that investing would be as simple as it was in 2020 and 2021 when everything was going up and records were being broken. But the truth is, those years were an anomaly. Historically, an S&P 500 that returns anywhere from seven to eight percent a year is really, really good, and I have a feeling we're going to return back to that average. So I hope this provides some context to my own investments. At the end of the day, not everything is always going to be going up.

Just sit back, continue to enjoy the ride, and no matter what, smash the like button and subscribe for the YouTube algorithm. So with that said, you guys, thank you so much for watching. Also, feel free to add me on Instagram. Thank you so much for watching, and until next time!