WARNING: The LARGEST Wealth Transfer JUST STARTED

What's up, Graham? It's guys here. So, throughout the last year, we've seen the great resignation, where the number of workers who quit their jobs broke an all-time record, the great reset, which claimed that by 2030 you'll own nothing and be happy, and the great wealth transfer, where millennials are said to inherit 35 trillion dollars. But now we have what could possibly become the greatest wealth transfer during a time where everything is going to...

Here's the deal. So far in 2022, the Nasdaq has plunged into a bear market. Hundreds of stocks are trading at their all-time low. The economy has begun to shrink. Inflation is the highest in 40 years, and a recession is likely on the horizon. Although, what most people don't know is that beneath all the bad news lies one of the best opportunities to build your wealth quicker than any other recent time. I'll break it all down right now, backed up with studies, statistics, and history, so that way you could see firsthand just how important these next few months are going to be. Right after, of course, you transfer a like to the video for the YouTube algorithm because it does make a tremendous difference, and if you subscribe in the next five seconds, I will show you this really cute picture of a llama. So thank you guys so much, and now with that said, let's begin.

Alright, so we need to get this out of the way and talk about the market because... how do I say this? It's not good. Like, remember where we had the everything rally, where even my random stock picking monkey outperformed the S&P 500 and made 40% in a year? Well, those times are long gone, and now we have the opposite of that now being dubbed the everything sell-off.

Now, before we talk about the implications throughout the stock market, housing prices, and cryptocurrency, it's worth talking about the current state of the market because the recent decline could really be summarized into three main categories. The first, no surprise, is inflation. But not just any inflation. Wages increased, demand soared, so businesses had to staff up quick to fulfill orders and production, and prices rose so quickly that we had a 40-year inflation high. Although, where things went horribly, horribly wrong was in the definition of transitory. Don't you guys worry! These prices are going to go down any moment now. Any moment! Just wait a little bit longer. Hey, uh, why aren't these prices going down?

We say transitory! No, no, no! I meant to say, here's a rate increase. Now, it's important to mention that high inflation on its own is not enough to cause everything to begin selling off, but it does lead to second, an increase in interest rates. This included a 25 basis point rate hike in March, a 50 basis point rate hike in May, and several more planned 50 basis point rate hikes throughout the rest of the year.

However, the impact of higher interest rates is that stock market valuations look less appealing, mortgages cost more to borrow, and businesses have to pay higher overhead. For the average consumer, that means slightly less disposable income that they could spend, which brings us to three: uncertainty. Right now, there's the concern that companies could begin to lay off their employees. Like, Robinhood, for example, let go of nine percent of their staff. Rocket Mortgage was forced to downsize from slowing demand, and I think it's reasonable to expect that this could continue throughout many more industries.

Combine that with the uncertainty of an upcoming recession, sprinkle in some uncertainty of the Russia-Ukraine war, and add in a pinch of rate hikes coming soon, along with two tablespoons of stagflation, and you have the perfect recipe for a decline. We'll start with the stock market, which recently saw its worst drop since 2020, and even if you take a step back, it's down a lot. The Nasdaq is down over 30%, the S&P 500 is down 17%, and the Dow Jones is down 13% from their peak, with the average retail portfolio now 20% lower.

Of course, even though it's easy to think, "But Graham, it's all priced in. The stock market already knows we're gonna see rate hikes in an upcoming recession. Everything is fine!" Well, according to DataTrek, at 4,000, the recession odds embedded in the S&P are close to zero. By their math, 50/50 odds of a recession equate to an S&P at 3,525. Morgan Stanley also seconds this, saying that the S&P could drop as low as 3,460 should profit growth start to turn negative amid recession concerns. They also said that in the previous 10 instances where stocks endured deep losses in the first four months of the year, six saw the market extend its declines through December, and only two saw gains exceeding 10%.

However, stock market losses are pretty tame compared to the second topic: cryptocurrency. CNBC just reported that 40% of Bitcoin investors are underwater, with prices having declined more than 55% from their peak. Now, it's really important to mention this because throughout the last year, Bitcoin was often seen as a hedge against inflation, a way to store value and protect against market instability. But as we've seen this year, it's proven to have very little correlation. If anything, it's sharing the same trajectory as tech stocks. In other words, when interest rates increase, investors take a risk-off approach while they move their money into safer, less volatile assets, meaning cryptocurrency takes a hit.

In terms of what the future holds, Fundstrat Global is calling for a bottom around $29,000 a coin, and El Salvador is still buying the dip. But according to the stock-to-flow model, we've been trading well below its target price for over a year, so it's apparent that investors do not see this as a safe haven asset quite yet. Although in this market, nothing is safe, including real estate.

The immediate impact is that rising rates have caused 30-year mortgages to increase to their highest points since 2009. But buyers are starting to look to the bright side, with inventory finally beginning to improve, and that might potentially mean more appealing prices for the first time in what seems like forever. Sellers are beginning to drop their asking prices, and more than a dozen cities are beginning to see a decrease, implying that for buyers, there could be some affordability relief coming soon to a market near you. A side note, but this is also one of the reasons why I'm finally deciding to get back into the real estate market. So if you're an accredited investor and you want to invest with me, I'll link to the information down below in the description where you could apply.

But besides that, with non-stop Reddit posts about selling everything, moving to cash, and questioning just how bad things could get, here's what you need to know. Because if you just pay attention, you could wind up seeing one of the greatest wealth transfers in the last two years. Here's the thing: when you see massive declines in the markets, it's important to look at them objectively to see what's realistically going to happen. And if we look at past bear markets, we could see that maybe, just maybe there's a lot of opportunity.

When it comes to statistics like this, even though it's easy to point to the average and say the average bear market lasts just under 1.4 years and sees an average decline of 41%, throughout history, there are always going to be times that prove to be an outlier, and most of the time the market is never going to follow the average every time. For example, in 2020, the market fell 34% in a single month in the shortest bear market in history before then recovering to where we are today. Prior to that, the market fell 56% over 17 months throughout the Great Recession, and had you invested right at the peak before the decline, it would have taken you about four years to break even.

That same applies to the dot-com crash, where technology stocks lost about 78% of their value, and many of them took over 10 years to recover, if they were lucky. Of course, we also have the 1960s and 1970s decline of 36% and 48%, and plenty, plenty more throughout history, all with their own unique reasons. But in this case, it's estimated that standard recessions cause an average 26% drop in peak-to-trough earnings, suggesting that we could have some more room to fall.

However, there is some good news in the fact that now could actually be a great opportunity to invest because this is where the money is made. In terms of the average bull market, if we don't include drops of less than 20%, the average bull market has lasted a whopping 9.1 years with a cumulative return of 476%. If we include drops of less than 20%, which are kind of just like hiccups along the way, the average bull market still lasts an average of four years with a cumulative return of 129%. But that doesn't necessarily mean that the next bull market is going to last 48 months because if we look back in history, since 1940, the shortest bull market we ever had was just after the dot-com bubble, where the markets rose 21.4% over 3.4 months before then declining another 33.8% during the following nine months.

We also had a brief period where the markets rose 24% during the Great Recession over one and a half months before then falling another 27% two months later. But besides those two occurrences, we have to go all the way back to the 1920s to even find something comparable. During the Great Depression, there are plenty of examples of bear markets lasting just days, like a 23-day-long bull market with a 25% gain. After that, there was a 42% drop followed by another one month of a bull market going back up 30%. So, just given the context, even though it is true that bull markets do tend to last significantly longer than bear markets, it does show us that extreme volatility is very common, and seeing drops or gains of 20% is not as extreme as you would think.

Not to mention, half of the S&P 500's strongest days in the last 20 years occurred during a bear market, and another 34% of the market's best days took place in the first two months of the bull market before it was clear a bull market had begun. That's because for the most part, stocks tend to be forward-thinking. So usually, the best time to buy is before everyone else says it's the best time to buy.

In terms of my own thoughts on this, there is a reason why I say the same thing over and over and over again, and there's a method to the madness of never deviating from the plan. The fact is, if you buy inconsistently on a regular basis, regardless of where the market is trading at, with the intention of holding at least 10 to 20 years, historically, you would have never lost money. Yes, seriously. If you could just do that on autopilot throughout a broad index fund, you will make a lot more money a lot faster than just about any other strategy.

The fact is, when people panic about their portfolios, dread seeing red, and resist the temptation to go and sell everything, that is the time to buy in at a discount. Because realistically, unless you're a few years away from retirement, any drop in the market should be seen as a gift. After all, what if I told you that you had the opportunity to invest in 1929 right after the market dropped 80%? Or what about investing after the dot-com bubble, when investors believed that tech stocks were done for? Or buying real estate during the 2009 housing collapse, where people believed that the market was never going to recover?

Each of those events provided a unique buying opportunity that would have made patient, consistent investors a lot of money. All I'm getting at is that in each of these market crashes, it could be argued that this time is different. And indeed, this time is very much different. No two bear markets are ever going to be the same, and once we've run out of unknowns, then eventually things are going to recover. No idea when that's going to happen, but I have a feeling that eventually we'll be able to look back at this very moment and realize that it was a good buying opportunity. That was exactly what I said at the lowest point of the market on March 20th, 2020, and that is what I will say here again now.

It's certainly not to say that the market can't drop even more, because most likely it can, and it probably will. But for anyone who ever commented, just wishing that they could have invested more money back two years ago, well, here you go. Here's your chance. For those who have the income and stick with the principles that have worked throughout the last 100 years, this will be the best opportunity for one of the greatest wealth transfers in recent time. Because, as Warren Buffett says, the stock market is a device for transferring money from the impatient to the patient.

And I'm pretty sure he also said that you should get your free stock down below in the description when you sign up for public using the code Graham because that could be worth all the way up to a thousand dollars. So you may as well do that before the offer expires.

So, thank you guys so much for watching, and also make sure to add me on my brand new weekly newsletter where we go over these videos in more depth than I could put in a video. So if you want to be a part of it, the link is down below. Thank you so much, and until next time!