Why 97% Of Investors Lose Money

What's guys? It's Graham here and we're

Chances are quite a few people are

about to lose a ton of money investing

over these next few years. Like, we've

already seen a stock market valuation

similar to that of the dot bubble. For

the first time ever, new homes are

cheaper than existing ones. And real

talk, we're currently at a level where

it's not too late to begin taking some

precautions ahead of time if you just

know what to look for. That's why if you

want a blueprint to come out ahead long

term, regardless of what happens to the

economy and during a time when 97% of

traders are losing money, here's

everything that you need to know and the

most common investing mistakes that

nearly everybody makes. Because the

reality is we have just printed another

$4.1 million in the time it's taken me

just to say this intro. And if you

aren't actively planning for this,

you're going to be left behind. Although

before we start, as usual, if you

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I can. So, thanks so much. And also, big

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sponsoring this video. But more on that

later. All right, so if you want to

avoid losing money, the first step is

very simple. Don't get overconfident.

Here's the thing. In a bull market,

everybody looks like a genius. Really,

since 2020, you could have created a

wall of random stocks, thrown a dart

blindfolded, invested in whatever you

landed on, and still made money. In

fact, to prove this point, four years

ago, I had a monkey pick 10 random

stocks from the S&P 500. And even that

portfolio is currently up 35%.

Remember, this is a monkey we're talking

about that's pulling similar numbers to

a hedge fund. Let that sink in. The

point I'm trying to make here is that

when everything is going well, it's easy

to think that you've just become a very

good investor. But the thing is, once

you get overconfident, you begin losing

your edge. All of a sudden, when this

happens, it's easy to overlook the

risks, ignore the fundamentals, and

invest because so far it's turned out

really well, and every drop has only

lasted a few weeks, and then you make a

ton of money. However, this type of

overconfidence eventually causes you to

make riskier investments or you hold on

to really bad investments for too long

because if you are confident enough to

buy it in the first place, you're

definitely confident enough not to sell

it. Right? Wrong. That starts clouding

your judgment and you begin not to make

sound rational decisions. And when that

happens, again, you lose money. That of

course is not to say that you can't be a

genuinely talented investor. And I've

met so many people who have been

instrumental in helping me with my real

estate investments and creating a well-

diversified portfolio. But those people

are usually smart enough to know that

they don't know everything and to always

expect that anything can happen. Anytime

I've met a genuinely good investor, they

have a cautious optimism about them

where even if they're doing well and

making a ton of money, they still

acknowledge that there's missing pieces

of information and to expect the

unexpected. I just think a little

humility goes a long way for most

investors. And as soon as you

acknowledge that you don't know

everything, chances are the more money

you're going to make. Now, the second

mistake that almost all of us are guilty

of at some point is getting impatient.

I've just seen too many times where

someone's bought a really great stock,

they hold on to it, and then after a few

weeks of it doing nothing, they sell it

and try to move on to the next big

winner. But what usually ends up

happening is that as soon as they sell,

that original stock finally begins

trending upwards, and they completely

miss out because they're constantly

chasing from one stock to another. The

fact is, impatience ends up leading to

impulsive, short-sighted decisions. It

implies that you know how to best time

the market, and it reinforces that it's

okay to sell a stock once you get bored

of it, not constantly going up in price.

In this case, the reality is patience is

one of the best qualities that you could

have. Not only with investing, by the

way, but also with life. Nine times out

of 10, the markets never just go up

indefinitely, and there are going to be

times where things just flatline, and

that's normal. When it comes to this,

the goal is to plan, invest, and think

in 10-year increments. And when you

don't do that, you become reactive. When

you become reactive, mistakes are made.

And when you make mistakes, money is

lost. So, if you want to avoid this

mistake, just rest assured that time is

on your side. And as long as you're

properly diversified, the right

companies for the right reasons, you're

going to be just fine. As long as you

don't screw it up going all in on meme

stocks. Next third, with margin debt

surging 9.5% in June, it's equally as

important to make sure you do not borrow

too much money. I've said this before,

but borrowed money is very much like a

fire, where if you use it properly,

it'll keep you warm and cook your food.

But if you abuse it, it could very well

burn everything down and destroy all of

your finances pretty quickly. That's why

I'm not going to sit here and say,

"Don't borrow money. Borrowing money is

bad." You just have to do it responsibly

and make sure you don't borrow too much

more than you're able to pay back. For

example, when it comes to myself, I

don't have any credit card debt, no auto

loans. I just have mortgage debt on cash

flowing rental properties all fixed for

the next 30 years under 3%. In those

cases, the cash flow more than pays for

the rent. And if for whatever reason I

have to sell, there's enough equity to

pay off all the loans. On top of that,

those mortgages make up less than 15% of

my entire portfolio. So, if the market

were to crash, it would really make no

difference whatsoever. Honestly, the

point where people get in trouble is

just when they borrow too much money on

short-term speculation and they don't

have enough to cover themselves in the

event of a prolonged downturn. Now,

sure, even though borrowing money will

help you earn a lot more when times are

good, like they have been for the last 5

years when the market eventually does

turn around, it's going to amplify those

losses so much worse, and that has to be

taken into consideration sooner than

later. Although, before we go into the

fourth investing mistake, here's the

thing. Being financially responsible

isn't just about growing your money.

It's also about keeping it safe. Like,

most of us log into bank accounts, send

payments, or log into brokerage apps on

the go. And doing that on public Wi-Fi

is basically like leaving your wallet on

the table. That's why for the last few

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