UPDATE: Invest Now or Wait for a Bigger Stock Market Crash?

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Hi i’m jimmy in this video we’re looking at different economic indicators to see if we can answer the question should we invest now or wait for the stock market to fall even more now before we jump in actually just want to apologize i’ve been missing in action for about a month we were rolling out we’re rolling out the beta version of our website our fair value

Website where we’re trying to come up with a fair value for different stocks make it quick and easy we have analyst estimates things like that the past month i’ve been rolling that out uh working through different errors that we had so looks like we’re back on track no so i will be back on youtube hopefully more consistently going forward so i just want to let

You know why i’ve been missing in action if you’re curious to see about the website i’ll leave a link in the description below okay now let’s jump over to our first economic indicator and this month we’re going to start with unemployment so this is one of the bright signs for the economy as we can see that unemployment rate has fallen all the way down to three

And a half percent in the most recent number so broadly speaking this is actually a decent number from economic standpoint i would imagine that places like the federal reserve are looking at this going yeah okay this is a bright point for the economy despite some very glaring holes we will get to in a minute so when we jump over to our economic scorecard clearly

This point is going to go to the bulls since this is a positive sign for the broader economy but now i think it makes some sense to jump right into one of the biggest problems for the economy right now and that is inflation inflation is all the way above nine percent right now and as we can see in this chart which goes back about 20 years well this is by far the

Highest level in fact you got to go back 40 or 50 years just to get in the range of this so this is a huge number and probably the biggest problem for the broader economy so clearly this is going to be a point for the bears because this is a bad sign for the overall economy now inflation is generally defined as the increase in the cost of goods and services so as

The price of milk or bread or our accounting services go up well that’s higher inflation there’s other ways to define it but but generally the federal reserve that’s how they define it so i think it makes sense to stick with the textbook definition of it now the rising inflation can be partially offset by increasing wages now this is the chart of wages going all

The way back to 2012 and we can see that there has also been an increase in wages but just like it’s been for the past few months the past few analysis that we’ve done on the broader economy wages continue to trail the inflation rate so yes people are making more money and yes broadly speaking people are getting bigger raises but those raises are not inc they’re

Not increasing as fast as the cost of living is so i do think it’s a good sign that wages are going up i do wish that there were more now if we’re jumping over the scorecard on the scorecard i think wages in isolation are a positive sign imagine wages were decreasing here we’d have even bigger problems so the fact that wages are going up i think is the point for

The bulls but that is more than offset by the point for the bears which happen with inflation okay now we’re going to look at some household numbers so this is a chart of the percentage of credit cards that are more than 90 days late so how many people delinquent 90 days delinquent on their credit card payments and we can see that this number is actually improving

That fouling number recent in recent months is a positive sign this actually surprised me i fully expected that given the economic situation that we currently find ourselves in there’ll be more people defaulting now i wanted to double check that number so i also pulled down the number of people defaulting on their auto loans and once again auto loans it’s the

Numbers seem to be improving this appears to be an improving number which again surprised me now i don’t want to double count what is essentially telling us the same thing so over in the scorecard and giving both of these combined as one bullish point i don’t want to you know try to get too optimistic i would think that if credit cards were going bad auto loans

Would likely go bad i was just sort of double checking them okay next up we’ve got the yield curve so the way the yield curve works is what we’re looking for is the shape of the yield curve we can see right now that the yield curve is sort of moving i would call it generally sideways but the important part is that the two-year rate is currently higher than the

10-year rate it’s also higher than the 30-year rate which means if we invested if we bought a us treasury and we invested for 30 years we would make less interest than we bought if than if we bought a two-year treasury or even a six-month treasury this has generally been a very very bad sign for the economy they call this an inverted yield curve a good yield curve

Would be shaped like that inverted is when the short end the shorter term bonds are they have a higher yield than longer term bonds this has been inverted and this one actually inverted about six months ago indicating that a recession would come now recently gdp went negative for the second quarter in a row which is the technical definition of a recession so we

Can say with confidence now with absolute certainty that the yield curve already predicted the recession that we’re currently in hopefully this yield curve straightens out but if the federal reserve continues to half have to increase interest rates which it looks like they will have to do it is likely to stay inverted which again is a bad sign for many for the

Broader economy a bad sign for borrowing money a bad sign for company growth all of these signs point to slower growth in the future so obviously when we jump over to our scorecard this is going to be a point for the bears okay now let’s shift over to housing starts so this is the number of new houses being built and this has generally been a good predictor of the

Broader economy because the more houses being built the more houses being bought and sold and more productive more jobs being created more productive the overall economy is now although the broader trend is higher we can see that recently the housing starts number has pulled below what i would call the trend line so because of that i actually think it makes sense i

Was wasn’t sure about this one so i actually gave this one a neutral point giving a point to both the bulls and the bears it’s not clearly turned lower left yet it hasn’t clearly turned to lower yet but i could see plenty of reasons why it would turn lower and i could see why it has struggled just a little bit we know we can it’s probably somewhat predictable why

That number has pulled below the trend line so over on the scorecard right now it’s looking somewhat even but there’s a bit more to come next up we’ve got the ism manufacturing economic indicator this is an indicator that measures the growth in manufacturing the most important level here is 50. anything above 50 implies positive growth anything below 50 implies

Negative growth obviously we want positive growth now if we look at where the number is today we can see that we’re still above 50 which implies we are growing our manufacturing economy our manufacturing sector is growing but it has been declining lately which to me implies we’re heading in the direction of not having any growth of or at least negative growth so

This is another one because we are above 50 i want to say it’s a bullish point but because it is declining i want to say it’s a bearish point so i went right down the middle and split the difference and said it was a neutral point okay next up we’ve got the economic indicator that i actually think is most important and this is also one that seems to be struggling

The most and that is consumer confidence so the u.s economy is and much of the world’s economy is driven by the consumer if the consumer doesn’t spend the economy stops and we can see that consumer confidence is lower now than it was back in the financial crisis of 2008 2009 when the whole housing bubble popped the consumer confidence is lower now and that’s a big

Deal to me this is the one i am most concerned about this and inflation those two are the most concerning ones now i think that the two are probably more tied than we’re giving them credit for clearly this one gets a bearish point but i do think that consumer confidence and inflation are very much tied together as prices rise people get more nervous if people see

That their paycheck maybe is going up a bit but their food bill every week is going up more or gas prices are through the roof energy costs are up well that’s a real problem so i think that can shake a lot of people so unless the federal reserve is able to get this under control is able to get inflation under control i think that this could be a real problem for

The broader economy now when we look at this scorecard this very much looks neutral when we first look at it but i think that some of these numbers deserve more weighting than others for example i think consumer confidence gets many more points i think that’s worth much more than how many people are late on their credit card bills sure if a ton of people were laid

On their credit card bills that would matter a lot too but i think that that would hurt consumer i think consumer confidence is the sort of leading economic indicator with this same thing with inflation now inflation i generally don’t count as a huge economic indicator to consider i look at it and i think well inflation is the problem that the federal reserve has

To face generally the way to face inflation is to pull money out of the system and increase interest rates if they do that that’s going to slow the economy that’s the point of pulling money out and raising interest rates if they’re slowing the economy that’s going to hurt the broader stock market so this brings us to the question do we invest now or wait for the

Stock market to crash even more well i actually think that the if there’s two choices here if we’re dollar cost averaging we just keep doing that dollar cost averaging is when we take a certain amount of money every week every month every quarter whatever we do and we consistently do it no matter what the market is doing i should think that for the majority of

Investors that’s the safest move just dollar cost average every month every quarter whatever it is just keep going don’t worry about the stock market for all those investors that like picking individual stocks well i think by far the best move is to just get very strategic i know for me on a personal basis i’ve been looking at technology stocks because although

The s p 500 is down 10 12 13 nasdaq is down a lot more there seems to be more opportunities over there i think it makes way more sense to be looking for good opportunities in different sectors based on trying to find value stocks in a down market if we do that over the long run i think that our portfolios could perform extraordinarily well if we’re willing to buy

Now when the market’s down and if the market keeps falling more opportunities are going to be there i’m not sure i would push all my money onto the table right now but if i find good opportunities that’s what i’m doing i’m trying to find good opportunities and then trying to invest below what i believe to be the fair value of each company now one of the keys to

Finding good companies is to be able to research companies now i actually did a video called eight steps to analyze the stock and this is the research process that i use when i’m trying to introduce myself to a brand new company what documents do i find where do i start what do i look for things along those lines so if you’d like to watch that video i will leave

A link right here and if you’d like to get access to the website that we launched we rolled out the beta version over the past few weeks if you’d like to get access to that i’ll leave a link in the description below and thank you so much for sticking with me all the way to the end of the video i really do appreciate it thank you and i’ll see in the next video

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UPDATE: Invest Now or Wait for a Bigger Stock Market Crash? By Learn to Invest – Investors Grow