The Best Investing Advice of 2022

What's up you guys? It's Graham here. So let's just face it: investing advice can often be boring, bland, overcomplicated, overwhelming, and just straight-up confusing. And with that, it's no wonder why so many people don't even know where to start, where to invest their money, and they have no idea where to begin to even look if they want to learn in the first place.

Which I think is a shame because investing doesn't need to be this way. The concepts are very easy to understand, and you don't need to have a lot of money right now if you eventually want to grow that into a small fortune. In fact, the saying that you could become a millionaire in 50 years from a $5 per day investment is absolutely true. Those exact strategies can really be simplified within this entire video.

So let's go for the best common-sense investing advice you will ever hear that will also weather and stand the test of time, no matter what you want to invest in—except for Bitconnect; that's a scam. But other than that, this advice applies to literally everything investment-related, as long as you just hit the like button.

So with that said, let's get into the video. All right, so the first piece of advice when it comes to investing is: buy low and then sell high. Just kidding—but not really. But seriously, when it comes to investing, it's really important to understand that time in the market almost always beats timing the market.

This is probably the simplest, most factual piece of advice when it comes to investing, but it's also the most difficult for people to actually follow. This is because pretty much every investor thinks that they're smarter than everyone else and they think this time is different and that they can outperform the market by waiting for the market to drop before they buy in.

Firstly, they think that they're selling at the peak when really maybe it's not, and the market continues to go even higher. Unless you're psychic and can accurately and consistently predict what the market will be doing month to month, your chances of actually beating the market and coming out ahead is pretty much like slim to none.

When it comes to this, there's been so much research that has been done to back up all of this information. Since 2003, had you just bought and held, you would have seen a 7.77% return. Had you been trying to time the market and just happened to have missed the ten best trading days over the last 15 years, your return drops to 2.96%.

All it takes is to miss the best 30 trading days over 15 years, and you'll experience a negative 2.47% return. Another study shows that generally speaking, the more trades you make and the more you try to time the market, the lower your overall return becomes.

On the other hand, research has shown that since 1926, a 20-year holding period of the stock market has never once produced a negative result. Without overloading you with a whole bunch of facts and figures and research and data, all I'm gonna say is this: the buy and hold investment strategy has proven to be the safest, most stable, and also the most profitable investment strategy for most people out there.

In fact, just buying into the market immediately and not waiting for a dip or waiting for prices to drop has outperformed trying to time the market 71% of the time. So really, your goal should be to buy into the market as soon as possible and keep it there for as long as you possibly can—not try to time it at the lowest entry point possible.

Because the chances of you getting that right consistently is really as good as like getting first comment on this video. Secondly, this is a piece of advice that everyone should always follow, no matter what it is. And it's just this: don't invest in anything you don't understand.

I know this one sounds super common sense, and you would think that people would understand it, but it's not common sense because people still do it all the time. They invest in something because someone told them it was a good idea, or they read an article that said it was gonna be going up in price, or they just blindly follow someone else because they were doing it too.

Don't do this. It's almost always better just not to invest your money in the first place and hold it in cash instead than it is to invest in anything you don't fully understand without first researching it. No, I'm not saying that you need to be a full-fledged expert on like the US equities market, for instance, but you should know at the very least where your money is going, what's been the historic return of that particular investment, how much your brokerage is charging you on that investment, how exactly they make money, and also how much volatility you can realistically expect.

It's as simple as this: if you can't answer those questions and then also explain why your money is best suited for that particular investment, then don't invest. This is where people get in trouble. They might drastically overestimate their returns and then get very disappointed when that doesn't match reality.

Or maybe they just lose money on something that they thought was a sure thing, or maybe they just get insanely lucky a few times in a row to the point where they consider themselves the next Warren Buffett's investing genius, and then they get overconfident and then they lose.

Here's the thing though: learning about where your money is being invested is really not difficult work, and most of the time just a quick YouTube or Google search will tell you pretty much everything you need to know, especially when it comes to your hard-earned money.

Just spending one hour of research to determine whether or not that's the best option for you is worth it—just one hour of your time. And of course, hitting the like button can greatly manage your expectations and could potentially save you thousands, tens of thousands, or maybe even hundreds of thousands of dollars.

Now, third, when it comes to investing, people tend to forget that there's always a certain degree of risk with everything that you do. There's not a single investment out there that doesn't carry some amount of risk or some small chance of you potentially losing money, even if it's like a fraction of a percent of ever actually happening.

We can use your example that the S&P 500 has never once produced a negative result over a 20-year holding period. While it's highly unlikely that that is not going to be the case in the future, it's not 100% certain that that will be the case.

Even during a normal holding period, there will be some volatility along the way, and there are going to be some points in time when maybe you just don't make any money. Really, just where you are on the chart will determine where you are in terms of profitability.

You can look at these timeframes and see that you've made money, then go another few months and suddenly be negative, and then go another few months and suddenly be positive. Even these safe investments out there are still at risk of inflation. Going and making 2% guaranteed in a savings account is at risk of seeing 2.1% inflation and your money losing a small amount of value, or you risk that the savings account might eventually lower their payouts.

Just don't think that anything is ever guaranteed and always expect that there is a certain degree of risk with everything that you do. It's really up to you to be comfortable with this and understand this going into it so that you align your expectations with the reality of investing.

The more you understand this, the better you're gonna be as an investor and the better you're gonna be in managing your risk. Now, fourth, it's very important to think long term at any time you're investing. The reality is that in the short term, we have much less certainty about what's going to be happening. Prices could go down, markets could act irrationally, and there's a chance that you can lose money—shocker, right?

But generally though, the longer that you invest, the lower your chances are of losing money. This is because the longer you invest, the better the chances you have of weathering any downturns or any drops in prices to eventually recover.

There are some other reasons as well why long-term investing just usually tends to be the best option. The first is that it takes the emotion out of investing. When you invest with the expectation of holding it for like 10 or 20 years, you become less concerned about the day-to-day price fluctuations, as you would be if you were only planning to hold it for like a few days or weeks or months.

Secondly, it's just very easy; it takes zero thought and zero effort on your end just not to do anything. It's really as simple as just buying it once and then leaving it. You're not doing anything for decades except for hitting the like button.

The third, investing your money long-term has so many different tax advantages that could save you a lot of money. Just consider that long-term capital gains on the investments you hold longer than 12 months are taxed significantly lower than the investments that you hold for less than 12 months, which are usually taxed as ordinary income.

All of the data out there pretty much just suggests that long-term investing is the superior option for the majority of investors out there. Even for myself, I just buy it with the expectation of not even caring or looking at what it does over the next like 20 years. All I care about is basically what it's going to be worth 20 years from now—not really what it's going to be worth six months from now or a year from now or five years from now. None of that matters to me.

Now fifth, any time it comes to investing, it's really important that you make this a consistent habit. Investing is not meant to be something that you dabble in here and there, and maybe just try it a little bit over here sometimes, and just kind of treat it like a side hobby.

Investing is really meant to be something that you turn into more so of a consistent lifestyle. It's like going to the gym: if you just go to the gym a few times and then you stop, don't expect to be shredded. But if you consistently over time and stay disciplined with it, then you can expect to see results. The same thing also applies with investing.

When it comes to investing, you need to invest consistently over time on autopilot. Now, it doesn't mean that you need to be actively involved like every single day, 24 hours a day, just constantly up late at night just researching stocks and investing in stuff like this.

But it does mean that you need to be consciously aware of putting a consistent amount of money every single month into your investments, no matter what happens. This is the equivalent of going to the financial gym—taking your money to the gym so it can work out and get big and strong and buy big and strong. I'm just talking about investing your money so it grows into something bigger. It's a metaphor—it's a metaphor!

So unless you're investing consistently, you're really unlikely to see good long-term results. Just plan for this to become a part of who you are and what you do. And again, you don't need to spend a lot of time on this, but you do need to set something up to run on autopilot where you invest a consistent amount over time every single month.

Now number six, when it comes to investing, it's really important that you understand this concept. It's very simple—it's just this: a dollar saved is really worth a dollar fifty earned. If it doesn't make any sense, here's basically what this means: in order to have a dollar right now in your pocket, you likely needed to make a dollar fifty from a job before then paying taxes and also before commuting costs or any other job-related expenses that you might have—all for you just to have that one dollar left over in your pocket after taxes and after expenses.

When it comes to growing and building your wealth, what's easier for you: to go and make an extra dollar fifty working a job, or for you just not to spend that dollar you already have in your pocket just so you can save and invest it? This is why the one dollar you save is really worth a dollar fifty earned.

When it comes to something like this, it's really just to serve as a reminder that saving more money by cutting back on your expenses and not spending it has the best immediate ROI over going out and working harder just to make more money. Of course, beyond a certain point, going out and just making more money starts making sense—or dollars actually, I should say! It makes dollars, not cents. Get it? There's a joke!

All right, I'll stop. But anyway, until then, cutting back on your expenses and saving is worth more in the very beginning. Saving money is absolutely the foundation of investing, and it all begins right here.

Finally, number seven: don't become emotional about your investments. Don't take it personally if you buy a stock and then the second after you buy it, it drops in price because this is what always happens to me every single time I buy a stock. If you guys want to make money, by the way, all you gotta do is figure out exactly what I buy and then just short the stock immediately afterward because it's gonna fall in price. And then as soon as I sell it, that's when you should buy back in because as soon as I sell it, it skyrockets in price every time!

That is how you're guaranteed to make money in the stock market. But for real though, don't get emotional about your investments— we're talking about an investment here, we're not talking about a person. If you buy a stock and the price goes up, it does not make you a genius. If the price goes down, it does not make you an idiot.

Getting all emotional about your investments is likely just to override all of the facts, logic, and reason when it comes to investing, and you're more likely to make mistakes just out of fear of missing out or the fear of losing money or the fear of basically anything. Your emotions serve no purpose when it comes to investing, and if you ever find yourself getting emotional about your investments, it either means that you invested more money than you were comfortable with, or you didn't do enough research to really understand what you were investing in.

It’s very clear that when it comes to investing, the more logical the approach you take, the more money you will end up making. Just think of it like this: do you ever think Warren Buffett gets all emotional about his stock purchases? Do you really think he's sitting there just like crying about the Johnson & Johnson's scandal and how he invested money in them?

He's like, "Oh no, I'm scared, I'm scared!" Warren Buffett doesn’t give... you know. He’s like a honey badger. Honey badger just don't give a...! You need to be like the investing honey badger. When it comes to all of this, you need to make money like a honey badger and just not give a...!

That's what the honey badger would want you to do! And with that, those are the simple pieces of investing advice that you should live by. This advice will apply to pretty much any investment you can make at any point in time, whether it's right now or 20 years from now.

This video is really meant to be something that you can come back to time after time just to make sure you're following the advice and you're staying on track. And of course, you're hitting the like button if you haven't done that already.

So with that said, you guys, thank you so much for watching! I really appreciate it. If you made it to the very end and you haven't already subscribed, just really quick tap that subscribe button—it's totally free to do. Also, hitting the notification bells so YouTube notifies you anytime I post a video.

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So anyway, if you want to add me there and see more Graham Stephan, add me on that second channel. Thank you again for watching, and until next time!