STOCK MARKET REACHES ANOTHER ALL TIME HIGH | DO THIS NOW

What's up you guys? It's Graham here. So, today has been a very eventful day. So eventful, in fact, that I had to replace the normal video I had scheduled today with this one because wow, today has been one of the best performing days for the stock market in a very long time and for good reasons that I'll discuss shortly.

However, even during this incredible rally, people are still making a very significant mistake with how they invest their money. If you're doing this, which I have a feeling applies to a lot of people watching, that is going to be a mistake that's going to cost you a lot of money and that's something I don't like. So, if I could help you not lose money or basically, if I could help you make money, I'm happy. That means I've done my job which is to sit here alone and just talk to a camera by myself.

So, let's go over exactly what's going on, what this means for the future of the stock market, and then because this is an investment and finance channel, how you could use this information to make money or basically not to lose money. But before we begin, we also got to make sure the like button hits a record high too! It just takes you a second; it helps me out a ton. If this video gets a record high, I will show you a picture of a really cute kitten. So, with that said, thank you so much! And now I'm going to magically teleport over to my chair.

Alright, so as usual, let's bring everyone up to speed. For a moment on September 2nd, the S&P 500 hit its previous all-time high. That was driven by the beginning of reopening the economy, lowered illness cases, and the prospect that another large stimulus would go into effect and that hey, things might start to get back to normal. But as that happened, cases became more prevalent, the stimulus deal dragged on, and with less than stellar news, the stock market began trending downwards.

At this point, many people were worried that this was going to become the so-called double dip recession that everyone was talking about and that we would begin to see the aftermath of what happens when all the excitement begins to wear off. Then in October, the markets tried testing another all-time high as stimulus talks progressed further and the market awaited an injection of money, but that didn't happen. With the uncertainty surrounding the election, everything just began to fall again.

That was until last week during the week of the election as the outcome of the presidency, the house, and the senate began looking a little bit more clear. The markets just began to rally. This was with the expectation that we would have a fairly split Congress, which many investors argue is a good thing because we'll see a fairly balanced outlook on anything that passes through.

However, if that didn't propel the markets enough, then this today was the real catalyst for everything to begin moving forward, and that would be this: the news today that the drug manufacturer Pfizer announced a vaccine that they say is more than 90% effective in phase 3 trials. Now for anyone wondering, here's how that works. Initially, studies like this are conducted in a laboratory setting as researchers analyze the virus and how it interacts with other cells.

This promotes an environment where they could begin learning exactly what it is, how it works, and how it reacts to other stimuli. And no, I don't mean this sort of stimulus, I mean this stimulus. Now from there, once they have promising results, they can move on to what's known as a phase one clinical trial. Now, typically, this is tested on a small group of people in small doses and they're analyzed to see what happens.

Now, if this appears promising, then it's given to a larger group of people with a larger dose to see how they react. This is slowly ramped up to test tolerance, side effects, and any other immune responses. The biggest test here would be safety and making sure there aren't any weird side effects that would make them reluctant to give this to a much larger group of people. But assuming it passes, then we go on to the phase 2 clinical trial.

This one is typically administered to a larger group of people as they test for effectiveness, dosage, and minimizing any risks. This portion can last anywhere from a few months to a few years as they analyze how this vaccine interacts with the body. But obviously, these timelines could be moved up significantly given the urgency of finding something as soon as possible and all the resources allocated into getting this done.

Now after that, though, assuming positive results and no severe side effects, it's moved on to the phase three clinical trials. Many would argue that this is as close as you could get to giving a vaccine to a widespread audience in a controlled environment. By now, they should really have a good idea of the dosage amounts, the side effects, and the safety, except with this they have a placebo group to test just how well this drug actually works. Why? Well, it's important to control as many variables as possible and test under a consistent setting, and this helps us to determine the actual effectiveness of the drug versus what our mind wants us to believe.

In this case, Pfizer had some really good results. They looked at 94 confirmed cases of the illness among more than 43,000 volunteers who either got two doses of the vaccine or a placebo, and more than 90% of the confirmed cases were from people who were given the placebo and not the vaccine. Now, in terms of how significant this is, the FDA previously said that they would have been happy with a 50% effectiveness rate, but this at over 90% is incredible.

Pfizer says they plan to seek emergency use authorization from the FDA as soon as volunteers have been monitored for two months after getting their second dose of the vaccine. That could happen as soon as the third week in November. Now keep in mind this is not the first time a treatment has gone through phase 3 trials, and Pfizer has said they're still unsure exactly how long the protection lasts, so more tests need to be done.

However, even though there are some questions still up in the air and it still needs final FDA approval, it's a really good sign. If it works exactly as described, this will open up a lot of new doors for the entire economy. The second to also remember, the vaccines are not going to be largely available on the market until sometime in 2021, so this doesn't change much of our normal everyday lives right now, but it could in the future if things continue on such a positive trajectory.

Now, as far as the stock market is concerned, this is where things get crazy. With the news of a potential vaccine, the recovery stocks are the ones that have benefited the most from this. These are the businesses that got hit the hardest because of the shutdown, like restaurants, airlines, hotels, the travel industry, or anything involving a physical location. Companies like Boeing up over 14%, Dave and Buster's up 40%, BP up 17%, Delta up 15%, Wynn is almost up 30%, Simon Property Group up 27%. Honestly, this type of market rally is insane!

But with every winner, it can also be a loser. Online companies that dominated the space like Zoom, Etsy, Amazon, and Shopify are all down because now there's less of a push for people to continue using those online services long term. The assumption here is that once the economy begins to reopen, there could be a big rotation of money away from tech stocks and into reopening stocks or in-person businesses. It's still too early to tell, although overall the market is up massively on this news.

Like earlier today, the S&P 500 surpassed 3,600. The Dow Jones was also getting very comfortable getting near 30,000 and the Nasdaq even surpassed 12,100 before closing down the day for a slight loss. Now, I know inevitably there are going to be people out there saying, "But Graham, the market is at its all-time high! Now is not a good time to invest. I'm just going to be sitting over there on the sidelines; it's going to crash any day now since the actual economy is not really that good right now." And to that, here's my response backed by factual studies and data, not by opinion.

And this is what I have to say. Now, quick disclaimer: I've mentioned this information before, but it's worth mentioning again because number one, people never go back and watch my old videos, so all of that information gets missed. And two, people keep making the same mistake over and over and over again and it ends up costing them money. So, this one is absolutely worth mentioning again. So, I'm just gonna say it: Timing the market is one of the stupidest things that you could do!

Like, it was widely anticipated that the election was going to cause a lot of stock market volatility, to which we saw none. If you pulled out of the market like I saw a lot of people doing, such as in this thread right here on Reddit, you would have missed out on a 10% gain in the market just in the last week. So, given that, let me show you guys the importance of staying invested in the market and continuing to invest your money even as the market climbs higher.

Because here is the factual data you need to know: Studies have shown time and time again that the best strategy for investing your money is just to dump it all in the markets as soon as you have it, and then you just keep it there. Vanguard analyzed the entire history of the market and they found that 67% of the time, just dumping your money into the market all at once would give you a higher return than if you slowly just allowed it to trickle in, otherwise known as dollar cost averaging.

Now, even though, sure, there might be a one in three chance of that strategy being less profitable, you never know what's in store for the future. If anyone offers you a two in three chance of making more money, you should probably take it. The second, after you invest your money, you should probably just keep it there. Don't think that you're some expert who could predict exactly what the market's going to do in the short term.

Because chances are, if you think something is going to happen, so do millions of other people, and that, in turn, could mean that current good or bad news is already priced into the markets. But the real reason why it's so important not to time the market is that if you miss out on the best days, like potentially today, it could cost you a lot of money. Like Fidelity found that over 40 years, a $10,000 investment in the S&P 500 would have grown to $697,000 if you just kept your money invested without touching it.

However, if you missed out on just the five best days over 40 years, your return would diminish by over $265,000. Then, if you missed out on the best 10 days over 40 years, you would miss out on $384,000 worth of profits. Missing the best 30 days would result in a $581,000 lost opportunity, and if you missed the best 50 days in the market over 40 years, that would result in almost $650,000 less in profit. Or in other words, with inflation, if you just miss the best 50 days over 40 years, you're losing money!

Another study found that within the last 15 years, if you started with $10,000, staying invested in the markets would have earned $18,000 more than someone who missed the market's 10 best days. This should really go to show you that statistically speaking, if you have money sitting on the sidelines, you're missing out on a lot of potential for that money to grow in value.

By selling out of your investments or trying to time the market, you risk missing out on those best days that could severely impact your overall return. Even the argument that the market is at an all-time high doesn't make a lot of sense because naturally, we're always going to be hitting new all-time highs. Like, imagine buying into the S&P 500 at its previous all-time high on January 26, 2018, at 2,872. Sure, in the subsequent few months, prices went down and it took about a year to return back to that same level.

But even though you bought in at a previous all-time high, if you just held, so far today, you would be up 25% in just under three years, not even including dividends being reinvested. And in 30 years from now, I could say with almost 100% certainty that the stock market is going to be way higher then than it is today. I bet 30 years from now, we can look back at today and be like, "Wow, the market is so cheap; I wish I bought more."

Of course, yes, anything could happen and maybe the markets go down in the short term; who knows? Either way, statistically, it's better to get your money invested in the markets now and continually reinvest. Otherwise, you could be a part of the statistic that misses out on those best days in the market. Lastly, I just want to say this: Just because some good news came out does not mean we're out of the woods just yet.

And if everything goes to plan, it's still going to take some time to get this fully to market. Of course, any little bit helps, but for us to really return back to normal, there's still quite a lot that has to happen. Businesses are still suffering, people still need assistance, and this could very well be a year away from being implemented on a wide scale. Optimism is great, but it's still important to be grounded in the realities of the situation and that things will still take time to develop, that could weigh down on the markets once the initial excitement wears off or maybe not.

People could certainly be excited for a long time. We also have a new proposed stimulus bill potentially in the works that would include extended unemployment, paid sick leave, increased social security payments, student loan forgiveness, and stimulus checks, but it's also too early to tell how that's going to play out or if it's too ambitious to be passed through by the Senate. In the meantime though, just keep investing. I've been no stranger to saying this since the beginning of the year and basically since I've started making YouTube videos in nearly every single one of them, and I'm still investing a significant amount of money into the markets regardless of what happens.

So, if you missed me talking about this before, just know that all-time highs are nothing to worry about and they're just a part of investing. Keep your money invested in the markets, keep buying, and don't let this rally dissuade you. Hopefully, this should be really positive news and that overall there is movement towards the light at the end of the tunnel. But also make sure to smash the like button so I can continue to keep you updated on exactly what happens at the market.

So, with that said you guys, thank you so much for watching! I really appreciate it. As always, make sure to destroy the like button, subscribe button, and notification bell. Also, make sure to add me on Instagram. I posted pretty much daily, so if you want to be a part of it there, feel free to add me there as in the second channel, The Graham Stephan Show.

I post there every single day I'm not posting here, so if you want to see a brand new video from me every single day, make sure to add yourself to that. And lastly, if you guys want three free stocks, use the link down below in the description. Webull is going to be giving you three free stocks when you deposit $100 on the platform, with two of the stocks worth at minimum $8. To show you guys, I actually have three free stocks. So, the first one we got is Zynga, and then we got another Zynga, $8.11, and then we got, wow, AGI, $9.25.

So, if you want three free stocks too, use that link down below. Let me know which three you get! Thank you so much for watching and until next time.