Stock Market Expectations vs Reality
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stock market expectations versus reality, that is what today’s video is about here today, guys, I hope you really enjoy this, we’re going to go through five different categories, five different categories on what is expected when somebody is kind of looking into the stock market and first getting involved.
Their expectation toward things and what is actually the reality behind it. As someone that’s been in the stock market for 10 years, I thought this would be a very interesting idea. I saw Graham Steffen did a very similar video on real estate the other day, and I saw that video.
I’m like, I should do something like that toward the stock market. So today’s video should be very helpful to anybody that’s kind of newer the stock market has been looking into it, or maybe just got involved with the stock market.
I think you guys will learn a lot from this video. I think anybody that’s an advanced investor will really enjoy this video as well. Because you can probably relate to a lot of these things. And a lot of these things that people think about and are kind of like expecting.
And then once they get involved with the stock market, they realize, oh, things aren’t really like that. So hope you guys enjoy this, as always make sure you follow me on Instagram, if you have not already.
I’ve been posting a lot of content on there, especially in my Instagram stories. Let’s get into those you must live off your stocks, right, you must live off the money that you get from your stocks, right? Oh, you don’t? Oh, that means you’re not successful in the stock market.
Right? That is a big expectation people come into the stock market with they think that people like live off of what they make off their stocks, when really I’ve yet to meet a person in real life, who makes a living just off of their stocks.
All right is so unrealistic. Even the great Warren Buffett doesn’t technically live off his stocks, his expenses don’t come out of his stock market portfolio, okay? His expenses come from income related things. All right.
So this notion that in order to be a successful investor, that must mean that you You must have enough money that you just you know, you pull out money all the time out of your stock market account, you live off that.
And if you want to buy a new Lamborghini you pull out of your stock market account, when really that’s not, that’s not realistic at all. And I’ll give you a few reasons why it’s not okay.
One if you need if you’re going to be at those type of levels, you’re going to need to have really like 10s of millions of dollars behind you. Okay, even if you have a few mil it’s not gonna be enough to cut it because generally like people that make a few mil, they want lavish lifestyles, and their expenses are much more, okay.
So it’s very unrealistic in that realm of things. There. The reason why it’s an unrealistic thing to ask or expect, you know, when you get in the stock market, is, here’s the thing, if you’re pulling out money out of your stock market accounts, all right, that’s less money to be invested.
Which means less money to compound for you, right? Also, sometimes your stocks are gonna go bad for whatever reason the market is gonna go sour or something like that, your stocks are gonna go down. All right, that’s just like a fact of being the stock market.
Sometimes your stocks even though down, sometimes all your stocks are going to go down. All right. So what ends up happening sometimes is if you’re forced to pull out money to live off your everyday expenses right out of your stock market account.
The issue with that is sometimes those stocks go down and then you have to sell at bad prices. No one any smart investor ever, never wants to sell a stock at a bad price. Anybody that’s ever been a great investor or good investor, we all want to sell at prices that are fair.
At least Okay, or maybe sell at an overpriced valuation. But at least sell at a fair price. None of us want to buy into a stock at 100 let’s say it’s $100 a share, it goes down to $80 a share and all sudden we’re like shoot we need to pay for all our expenses.
We need to pay for our house and our our cars and our meals and all this different stuff. So let’s pull some money out of our stock market account and sell these shares that we bought at 100 now they’re at and we believe they’re going to 200 over the next few years.
But now let’s sell some because now we got to like it’s just so unrealistic. I thought this was a you know, the way to go at one point and I my eyes got open and I realized man, it’s not the way to go.
Stock Market should be for making more wealth not for living off of Okay, maybe if you you get to such a level where you got 10s of millions of dollars in the bank and you know, you can just do it like that.
And you don’t have to put any pressure on yourself to pull out money maybe once you get to some kind of level. But once again, you get to those levels, I can almost guarantee you you’re going to start spending a lot of money okay.
So it’s better to have some income streams and then that way the stock market money can just build you there’s no pressure there to build to build in if something if stock go down the short term or one of your stocks go down in the short term.
You don’t need to panic and sell because oh my gosh, I got expenses to pay. So it’s it’s an unrealistic thing. Don’t ever expect that from yourself. The stock market should be a place where you add more wealth not where you’re taking out. Okay.
It’s not Where are you? Oh, I made some money in the stock market. Let me take this out. So I can go buy stuff now with it. No, that’s not the way you should treat it. That’s the way you should treat income sources, create business models.
Create passive income streams, create a lot of different things around that and make your own money that way Okay, and then build more wealth through the stock market. Alright, let’s get into number two.
You must check stocks all the time during the day, right? You must have like three monitors and be checking prices constantly, right? That is another huge expectation from people to get in the stock. market I think it’s just from like, they see movies or whatnot.
And they show traders and they show, you know, oh my gosh, I got three different monitors and there’s like all these charts and prices going up and down. And that’s like the stock market life, when really that’s not the stock market life at all.
If you’re a trader, that could be your stock market life, right? You’re always watching chart patterns and like trying to pay attention to everything very close for an investor for a long term investor in companies.
Which is what I do where you’re looking out several years or making an investment in a company like Dude, like I hardly check my stock prices honestly, maybe once or twice during a trading day.
If one of my stocks is going crazy, like way up or way down. Maybe I’ll check it a few more times in that but on most days like the stocks gonna go up one or 2% maybe 3% so it doesn’t matter what happens with that stock like I have no issue I have no plans to sell that stock right.
And maybe if I’m like going to sell that those certain those shares that day, maybe I’ll look more often but like most days, like there’s no reason to look because I buy into a company and I usually buy over several times right.
I buy into this company generally speaking I’m planning on holding that for at least a few years. So the need for me to be checking stocks constantly and then like have all these computer monitors It is so unrealistic guys.
That is only like a realistic thing more for like traders, people who are literally trading in and out of stocks every single day or every single minute or things like that, and they’re trying to make money based upon just a short term fluctuation in price.
Oh, that stock went to $5.27 I think that’s a good level of buy and I’m gonna buy in at this level and then try to sell it for you know, $5.30 or whatever. Oh my gosh, I went down and now we got to watch it and see where it’s at and whatnot.
That’s a totally different ballgame guys, it’s unreal. It’s an unrealistic expectation. It’s unnecessary if you were investor to be checking stock prices all the time. Let’s get into number three.
We made so much money today. Let’s get out the champagne bottles baby we’re going to the club we’re hitting the strip tonight Baby. Oh my gosh, we lost so much money today. Oh my gosh, I think I need to go jump off a bridge oh my gosh.
This is a worst day ever all How can I lose our money I’m in depression. People have the expectation that the stock market is this place where like you were just like on top of the world or you’re like in major depression man and really it’s somewhere in between all right.
People that get way too excited over stock market gains or get way too depressed over stock market losses those people get out of this game real fast they do not long last for the long term.
Okay, people that start getting emotional about stocks which if you’re getting really excited or really down about you know what your account did that day what your stocks did that day if you’re getting emotional about it.
I’m telling you like you’re not gonna you’re not gonna be the right person for this game those type of people they end up going downstream very fast and they get kicked out of the game and they go on to something else Okay.
The real players or players that are staying in for you know decades and decades you’ve got to be even keel in this game right because one day it could be a great day all right doesn’t mean you need to go pop bottles in you know is celebrating life you know and oh my gosh.
I made money today is his greatest day ever. Because guess what the next day it can take it all away. Okay, money can be made real fast in this game it can be lost real fast in this game.
It just depends on the day it just depends on the week depends on the month depends on the year some years you’re going to have a phenomenal year some years you know one of your stocks is going to be a crap stock and you’re going to lose money and you’re not going to make any money.
And you’re like what happened that year man I made so much money all these years and then this year just was a crap you’re you’re gonna have times like this in this game Okay guys.
It’s just the way it goes and the odds are you know you’ll have a bad year every now and then if you’re really good in the stock market the majority years you have are going to be good years all right.
The majority of years as long as you do the work you put in the work necessary the majority years are going to be good years all right. But you every once in a while you’re gonna have a bad year a bad week a bad month.
You know one of the you know times when your your account just goes down you know, I’ve had some I’ve had countless days where my accounts are up five figures plus in down five figures plus I never tried to get emotional about it and oh my gosh, my accounts down with five figures.
Oh my gosh, my life is the worst blah blah, blah. Whoa, okay. And the same thing of my accounts up five figures plus, I’m not you know, celebrating and like going to buy a new Ferrari or something like it is what it is okay? It is what it is.
You can’t get emotional about this game, you start getting emotional man. It’s just a bad bad situation. And I can tell you, the real investors out there, they don’t get emotional and that no one gets emotional about trade, you know, Oh, that’s cool.
My stock went up 510 percent today. Awesome. Oh, my stock went down 510 percent less thinks it is what it is, man. It’s an investment you’re making for the long term. Maybe if you’re a trader.
You can get more emotional about things and more frustrated because you’re just getting in and out of position and a real quick amount of time and money losses money loss, but when you’re looking at it from an investment standpoint.
If I buy stock ABC, right, and this stock goes down over the next month 10% 20% I probably bought into that stock for the next 234 or five years. So whether that stock went Up or Down 10 or 20%, it doesn’t make a difference.
What matters is where those shares are at 2345 years from now, that’s what matters in the end, guys. Let’s get into number four, the stock market is a big casino, man. It’s a big freaking casino, you’re gambling.
If you’re in the stock market, that’s another big expectation where people have when they get involved with the stock market, okay? And it’s just not factual. Okay? The stock market can be a big casino.
The stock market absolutely can be a big casino, but it’s the way you treat it, okay. It’s the way you treat it on if it’s really a casino, not right. If you build in there, right, you go in there, and you’re just throwing money at different stocks.
You don’t really know what you’re doing, and you don’t really have a plan, and you’re not really making investments, yeah, then you’re gambling, you’re just throwing money around. And you know, you might as well go to the casino at that point, and go play the slot machines, all right.
Because you’re you’re playing a hard game, if you’re just throwing money around all these different stocks, you don’t really know much, you know, have a good strategy, you know, stick to a strategy, then you’re not doing anything, you’re gambling.
It is a big casino, right? But if you’re trading as you’re investing in companies, it’s not a casino, if you’re looking at it from a long term perspective, okay? When you buy a stock, you’re buying shares in an actual Corporation, which represents some ownership in that Corporation.
All right, you’re buying part ownership of that Corporation. Now you as a smaller investor, you’re probably buying a very, very small percent of that company. All right, you might be buying point 0000 1% of that company you actually own it’s a very small percent.
But you’re still technically part owner of that company, literally, literally part owner of that company. All right. If you’re going to treat it like you know, buying a stock is a casino game.
Well, guess what everything else in this world is a casino game at that point. Okay, starting a business as a casino game, right? You know, anything, taking a chance on a person in a relationship as a friend or family that could be a casino game.
Walking outside, driving your cars and casino game, you could treat everything as casino game, right? Everything has risk. But if you’re taking a balanced approach to things, right, you can you can you can treat your car like a casino.
You can drive without your seat belt, you can turn your airbags off, you can drive all around the roads at 100 miles an hour swerve in and out of traffic, and you’re treating it like it’s a casino.
Or you can get in your car, you can put on your seatbelt, make sure your airbags are on drive the speed limit, drive safe Watch out for other cars around you. And you just limited your risk in a massive, massive way. Right? There’s a very.
Very different things, there’s very different ways you can approach everything in life, right? You start a business, you start a business, and you could have a plan behind you, you have money behind you, you can have a strategy behind you.
You’re gonna have people behind you, you can start it that way. Or you can just be like, oh, tomorrow, I’m gonna start this business and not have any plan and not really have any money. And oh.
I started Oh, I have no customers. Oh, I failed, right? You can you can treat things like it’s a casino or you can treat things like it’s, you know, you’ve got a strategy behind in your you got a way of working through this, because the stock market is not a casino, unless you treat it like as a casino.
And then you can treat everything like it’s a casino guys. So let’s get into number five, everything in the stock market has to be practical, it just has to make sense. There has to be a reason for everything right? That stock move down, there has to be reason to move down.
Right, the stock moved up, there has to be a reason to move up. Right? The fact is, okay, the expectation when you come to the stock market is that everything’s practical and everything just works right in that everything’s correct and could not be further from the truth.
It’s a Yeah, right. That is so not true. Okay. Especially when you’re looking at from a short term perspective. Sometimes stocks make moves up or down that make no sense at all. Okay, sometimes the stock market, you know, behaves very irrationally, just as a whole.
It will go up way more than it should, it’ll go down way more than it should. Sometimes things literally don’t make sense. Not everything in the stock market game is practical. Okay, that is something you got to realize right now.
You’re going to drive yourself crazy in the head. If every time you see a stock move up or down, you’re like trying to figure it out and piece the you know, things together because a lot of times guys.
It will literally make no sense like like, like the stock market gets it wrong all the time. Okay. The for instance, that’s what creates a such a great buying opportunity for value investors. Okay, long term value investors.
That’s how we make money. If everything was accurately priced. If everything was practically priced all the time, we would have no opportunity in the market because everything would always be a fair value, and there wouldn’t really be any upside.
The way we make money is we find undervalued assets that have growth going forward to them. And we buy these undervalued assets. And since they’re undervalued, we get to make extra money along the way, rather than if everything was fairly priced.
And then just got to hope it goes up a little bit here a little bit there. Right. Warren Buffett never would have averaged 20% a year consistently for decades and decades. If everything was always you know, a fair price. It’s just the facts, guys. It’s just the facts.
The opportunity is when things are undervalued, you get to buy them And then sell them for a fair valuation. Or maybe the stock market gets it wrong and that stock even goes up too high and it becomes overvalued.
All right, that is the name of the game. So if you think everything’s gonna be practical, if you’re always looking for a reason, I’m just telling you, there’s not a reason. Okay, guys, there’s so many times in the short term.
The stock market will have a bad day. And I’ll go on the CNBC app, and they’ll make up some bs reason on why the stock markets down that day. And then that same exact day, somehow the stock market went up a bunch of points.
And then they make up some new reason on why the stock market went up that day, literally, some days. Yeah, there’s a reason why, you know, a stock market went down in a big way or up in a big way.
But I will tell you a lot of days, most days actually, it’s literally like no one can figure it out. Like it’s just the way things traded out that day. Okay, so it was just more sellers and buyers that day.
There were just more buyers and sellers that day, okay, that’s how it is okay, guys, so you can’t always assume there’s like a practical reason why your stock went up or down on a specific day specific week, specific month or even sometimes specific year guys.
It just is what it is. Sometimes the stock market is irrational. A lot of times it’s irrational. Alright, I hope you guys really enjoyed this hope you learned a lot from it. If you’re kind of someone that’s newer to the stock market.
I hope if you’re an advanced investor, you’ve been in stock market for a long time. I hope you guys really enjoyed these. These are a lot of the expectations coming in and then the reality hits and it’s like well, things aren’t really like this at all. Anyways guys, thank you for watching. Have a great day.