The Strategy That Made More Millionaires Than Anything Else

The downfall with QQQ, just like many of these other ones, is that when you have more tech companies, it tends to be more volatile. That means when markets go up, they generally go up even faster than the general market. And when markets go down, it generally goes down faster than the general market, which means it's more volatile. So when you go through market crashes, this is going to go down further and harder. When you go through market booms, this is generally going to go up even faster and harder. Over the last 10 years or so, this has averaged approximately 18% a year, which again has been beating the S&P 500. But when you're investing in ETFs, you have to know what your strategy is to invest, because the mistake that a lot of people make is they buy when markets are hot. And then when markets go down, that's when they panic and sell. And that's why I say when you're investing, especially in broad basket ETFs, the way that you win, the strategy that you have to use is something like A, B, B. Always be buying. That is, when markets go up, you buy. When markets go down, you buy. In fact, the only time you change a strategy is when markets go down. And instead of selling, what you want to do when markets go down is buy even more aggressively. That's what A, B, B is all about. What I like to do is have a strategy. Every week, money leaves my checking account and it's automatically invested into my portfolio ETFs. It happens every week, no matter what. It doesn't matter if there's a Republican in the White House or a Democrat in the White House. It doesn't matter if it's raining or snowing. It doesn't matter if we're in a recession or economic boom. The only time we change it is when markets go down aggressively. That's when we come in and buy even more aggressively. So the second part you want to remember is BTD, buy the dip. If you really believe in the assets that you're owning, when markets go down, come in and buy more of those assets because a market downturn allows you to buy more of good investments at a discounted price. In 2022, when the stock market fell by 20%, you could have come in and buy the stock market for a 20% discount. In 2020, when the stock market fell by 34%, you could have come in and buy the stock market for a 34% discount. In 2008, when the stock market got cut in half, that was an opportunity to buy the stock market when it got cut in half. The problem is most people run away and they don't have money to buy when these bad things happen, which is why you need to be smart with your money, have cash reserves, which means you can't spend all of your money. That way you have a system so you're always investing. And then when markets go down, you're not panic selling because you need the money. In fact, that's when you come in and buy even more because you're patient. You know the recessions happen. We've seen 16 recessions over the last 100 years, 25 market crashes in the last 100 years. Market crashes are going to continue to happen. So instead of being shocked when it does happen, use it as a buying opportunity. That's the way that you can grow and accelerate your wealth is to use these market cycles because there are cycles that keeps happening the same pattern again and again and again. Use these cycles to accelerate your wealth, not destroy your wealth by selling when everybody else is freaking out. Buy when everybody is freaking out. That way you can stay calm as markets are going up. Keeping up with the economy is not an easy thing to do. And then when you have all these crazy things happening, it makes it so much more difficult not to get caught up in the political mess. And that's why I created Market Briefs. It is a free newsletter for investors that breaks down what's happening in the economy without all the politics and without all the fluff. It's a quick five-minute read where you break down what's happening in things like the economy, housing market, stock market, crypto market, and global economy into a fun, witty, and easy to read newsletter. It's read by hundreds of thousands of investors every single morning. And as an added bonus, when you sign up for Market Briefs, which is free, you're also going to get my investing masterclass where I walk you through, hike, get started as an investor, and find hidden investment opportunities before they hit the headlines. I'll show you the exact framework that my firm uses to research investment opportunities. So if you want to get the investing masterclass and Market Briefs all for free, all you have to do is sign up. And I have the link for you down in the description below. So what we talked about in this video is that the S&P 500 is a group of the 500 largest companies in the stock market. And this has averaged 10% a year over the last decade. It's averaged a little bit over 15% a year. And what we know is that if they get slightly better returns on your money, it can lead to significantly more wealth. Now, if you have more time, it really compounds that difference. The better returns you get, the better your money is going to look like. And if you can invest more money, this is just a one-time investment. Well, now they start to divide up even more. The better returns, the more money you invest, the more wealthy that you're going to become. And so we also talked about how investing is risky in general. And as you try to get better returns, it becomes even more risky, but there are ways to mitigate the risk. And we looked at some funds that have beat the S&P 500 historically. Now, you're never guaranteed to make money when you invest. And past returns do not guarantee future returns. But what we're looking at is what types of investments have done well in the past. And if you believe these are going to continue to create opportunity in the future, that could be an opportunity for you. By the way, we talked about market briefs as an easy way for you to stay up to date on what's happening in the financial markets. If you're not subscribed to market briefs yet and gotten my investing masterclass, again, that link is for you down in the description. So we started by talking about the growth companies in the S&P 500. So not investing in all 500 of those companies, just the growth companies. That's what VOOG is. Then we started talking about XLK. These are the tech companies in the S&P 500. Again, focusing in on those top 500 companies, but not all of them, just the tech ones. Then we talked about PPA, investing in the defense and aerospace companies, because regardless of what type of economy that you're in, if there's geopolitical conflict, there's going to be more money going into these defense companies. Then we talked about SPMO. This is investing in the S&P 500 companies that are seeing the best momentum, the top 100 companies with the fastest and highest momentum. More on the trading side, but over the last decade, it has outperformed the S&P 500. Then we talked about the semiconductors with SMH. Because of the AI boom, because of the data center boom, we need more of these semiconductors and chips, and that's where SMH came into play. And then as the bonus, we talked about QQQ as a way to get exposure to the Nasdaq 100, which is a group of the 100 largest companies in the stock market that are not financial, which are primarily tech. So if you're an investor, this could be something that you think about, but you have to know your strategy. The way you win as a passive investor investing in ETFs is by always be buying, assuming that you have a good fund, a good investment that you believe in. If you believe in it, when markets go down, keep buying. That's why BTD is there. Buy the dip when markets go down, because we know that volatility, market crashes, and recessions create more millionaires than any other time because they allow financially smart investors to come in, buy good investments at a discounted price. So the key ultimately is to take out the emotions and be a financially savvy investor. That way you are investing for the long term. If you enjoyed this clip and you want to continue your financial education journey, I have another video that I think you'll love. All you got to do is click that button right over there. And for those of you who want to stay up to date on the top finance and business news, you can join Market Briefs, my free financial newsletter, by clicking that button below. Thank you for watching, and I'll see you in the next one.