Should you Sell Stocks or Hold | *Critical.*

the stock market was green today and it

begs the question should you sell or

should you huddle in this video i'm

going to provide you a formula for

whether or not you should buy

huddle or sell let's get right into it

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life and stay away from those dragon

crossbows at least the bad end the

business end of them all right folks

let's now talk about whether or not you

should sell

so

in my opinion

you should always buy and dollar cost

average and especially buy when there is

pain and blood on the streets when

stocks are going down bye bye bye bye

bye why because you should be focused on

building the investable portfolio that

you have

with quantity of shares because

generally in 5 10 15 30 years talked to

me in 30 years it does not make sense to

try to always spend your day timing the

market day in day out swing trading day

trading or even a long term

macroeconomic cycle timing but in this

video i'm going to talk to you about the

two differences because

one of these scenarios is appropriate

for one type of investor

and another scenario is appropriate for

another type of investor so let's break

this up with a formula

first here's what you should do right

now

in my opinion and this is not financial

advice you should write down what is

your total

net worth of investable and tradable

assets

so you're probably going to want to add

up your stocks your crypto and rental

real estate or any kind of investments

that are not locked away that you could

actually trade and consider investable

assets add those things up do not add

things in here that are going to be very

difficult to sell maybe like trading

cards collectibles cars things that are

difficult for you to sell or that you

definitely want to keep don't even

bother with those now add up that figure

again stocks real estate tradable assets

add that figure up

now take your total annual income

subtract taxes out of it so let's say

your income is sixty thousand dollars a

year and after taxes you're making uh

let's go with fifty thousand or forty

five thousand dollars a year somewhere

around there if your tradable and

investable portfolio is less than forty

five thousand dollars per year in my

opinion there should be a very very

clear red line and you should probably

just not financial advice but you should

probably just buy huddle don't worry

about it instead you should focus on

taking advantage of something that you

could take advantage of today and you

generally cannot take advantage of and

that is asking for a raise asking for

more money the labor market is the

tightest it has ever been not only is

the labor market extremely tight but if

you have skills which a lot of other

people do not have skills then you could

easily easily demand more pay

because the last thing people want to do

is hire more employees right now

businesses don't have the money to train

new employees uh you have a lot of

leverage to negotiate your salary in

this kind of market you're going to lose

that leverage if we go into a recession

so if you're not already planning to ask

for more money or make more money i

think you're making a mistake now if you

can't make more money at your current

job then you should probably consider

switching jobs so a ask for more money

if you're actually providing value to

your business b

switch jobs and make more money or c

get the skills that you need to make

more money i don't care if that means

getting certifications getting a license

in something learning or studying some

kind of skill or whatever it could

complement your business as well i mean

here's just an example

if you are a robo or i shouldn't say if

you are a forklift driver what are you

going to do if your job gets replaced by

a robot in the future a robo forklift

well hopefully you're taking the time

now to study robotic engineering so that

way you can become a forklift robotic

engineer so you're hedging your job with

another skill set and even if we didn't

go into a recession or even if robo uh

forklifts never came you could take that

and translate that to potentially

getting an engineering job and making a

lot more money because there's really

i mean the sky is the limit in

engineering whereas there is a limit in

how much you could actually foreseeably

get paid uh in in

in driving a forklift so keep these

things in mind that you want to hedge

your line of work one of the things that

i did as a real estate agent

five years ago was i said oh my gosh red

fence coming in and potentially taking

over and if they they take all of my

clients uh which which didn't end up

becoming a reality but that was always a

concern of mine is oh my gosh what if

they come in and then they take over

right what can i do to to hedge myself

and i thought oh i know i'll just buy

redfin stock because if they take over

my business the odds are their company's

going to the moon so that was a style of

hedging so

what what have we decided here well

number one the rule is if your

investable base

is and tradable base is less than what

your income is focus on increasing your

income ask for the raise get a different

job learn to provide more value by

getting a skill certification or license

or hedging yourself in your industry so

that way you are an expert in your

industry and you are making as much

freaking money as you can in your

industry only you have the opportunity

to do that and if you could increase the

top of the funnel you're gonna have a

much bigger bottom of the funnel it's

that simple

now i don't want to just say oh you want

more money go make more money investing

is nice especially over the long run in

10 20 30 years is anybody going to care

that tesla's 900 instead of twelve

hundred dollars is anybody gonna care

that oh maybe tesla went down to six

hundred dollars and it went back to a

thousand dollars no nobody's gonna care

and it doesn't freaking matter so what

are you gonna do

i highly recommend you focus on your top

line your money your dollar hollas okay

very very very important

now

when does it make sense to actually sell

well we know in according to my opinion

on financial advice it does not make

sense to sell when your investable base

is less than your income after taxes

now there's going to be a little bit of

a gray area between this and it's really

up to you to determine where this line

comes up but there does come a point

where your investable base is actually

multiple times the size of your income

for example let's say your household

income is 200 000 but you have an

investable base of a million dollars

that could be a combination of stocks or

real estate or whatever but it's actual

net worth it's a million dollars it's

like

man our investable base is five times

our income before taxes let alone after

taxes might be as much as six times

well there are situations where it might

make sense

to get out of the market not to day

trade it not to try to time little you

know meetings or uh cpi reports or this

that or whatever right time in the

market beats timing the market we know

that

uh but

there are opportunities to time a macro

economic cycle as long as you're not out

of the market generally for more than 6

to 12 months because see here's a

downside before i tell you potentially

what i'm doing or how to do this there

is a downside risk of you turning into

some of those people from 2012 or 13 who

are like that's it we're going into a

double dip recession and guess what

happened the double dip recession never

came and prices went up and then they

got sad and thought well prices are up

now i'll just wait for them to come down

and then they wait 10 years and they

never invest that is a big mistake that

is the most fatal mistake you could ever

make

is thinking you're timing the

macroeconomic cycle

failing and then not accepting that

failure and getting back in the market

so

this is where we've got to talk about

that macroeconomic cycle i made a very

detailed video about the psychology of

market cycles i highly recommend you

watch that because i'm not going to go

through all of it in here i'm going to

give you a quick synopsis

the market cycle is very simple

whether it's the real estate cycle or

the business cycle doesn't matter

cycle markets are cyclical

prices go up we have expansionary

support we have fiscal support from

congress we have monetary support from

our central bank and

assets grow in value

well assets grow in value like a balloon

not necessarily a bubble we're not

necessarily over inflated but we inflate

up as we inflate up more people get

better jobs pay goes up the workers

ability to negotiate goes up and

everybody feels richer and when

everybody feels richer

everybody likes to go spend money like

crazy and so this is where there are a

lot of folks who say things like but

kevin how could we possibly go into a

recession when there's such little

unemployment or when people are spending

money like crazy look how good the

economy is well what do you think comes

right before

a recession a really good economy

usually

right so

the macroeconomic cycle is such that

everybody tends to feel very very rich

at the top of the market in 2006 and

even the beginning of 2007 before the

market really started showing any kind

of jitters folks were buying new boats

new rvs new clothing people going on

vacations people buying jets people are

going nuts spending money like there's

no tomorrow like the money's never going

to end

and this in my opinion is very

intoxicating because it's fun to spend

money

businesses like it they they raise

prices like they're doing now they

create inflation because they can and

people are willing to pay it because

they have more savings they have more

income they can pay pay pay so what do

they do they take on debt they use their

savings they use their higher pay and

they spend spend spend spend spend this

is why we are seeing higher levels of

margin than we've ever seen in the

history of america before in the stock

market because short of the last really

seven eight weeks here the stock market

has done really well

borrowing to invest in the stock market

has been a great bet buying the dip has

been a phenomenal bet

but not when the macroeconomic cycle

changes and this

is where in the event we start seeing

fiscal stimulus that stops which we've

already seen congress can't seem to get

any stimulus done because of fears of

inflation so fears of inflation are

making congress not our friend

on top of that fears of inflation have

now made central banks not our friend

anymore so now we have these two very

large headwinds actually three we have

fiscal headwinds the end of stimulus we

have monetary headwinds the central bank

saying they're going to tighten policy

and we have inflationary pressures that

even though folks say oh but kevin the

inflationary pressures will go away once

supply chains resolve themselves i think

folks forget that just because supply

chains get better does not mean prices

are coming down it just means businesses

for at least the first probably six to

12 months are gonna be making a lot more

money so supply chains could actually be

fixed tomorrow and we can still see

inflation for the next six to 12 months

that's because businesses are able to

raise prices because why people are

paying them and if people are paying

higher prices without businesses losing

customers what does that mean that means

businesses make more money and they can

report more profits for shareholders and

hopefully stocks go up which is kind of

what we saw over the last couple days

because we had phenomenal earnings out

of uh for example amazon and snapchat

and pinterest okay good so the economy's

booming

unemployment is very very low

very very characteristic of the top of a

macroeconomic cycle but then again we've

had low employment before we we had low

unemployment going into 2020 right we

had a very strong economy going into

2020 and we had a federal reserve that

you know wasn't like super accommodative

we didn't have stimulus in 2019 this is

true this is something to consider but

what did we also not have in 2019 seven

percent inflation

potentially now the next survey is

suggesting we might see seven point

three percent inflation

pmis are saying prices paid or going

through the roof these are purchasing uh

in indices or surveys uh

tracking prices wages are going up

everything that we look at in terms of

inflationary data suggests prices are

going up

now there's a limit to inflation

expectations and a lot of folks wonder

but kevin everything's priced into the

market right

maybe but here's what's not priced into

the market inflation not going down as

quickly as we think

the markets right now are pricing in

four to five interest rate hikes in 2022

but unfortunately if the federal reserve

comes out in march or in their may or

even in their their june meeting and

suggests wow

we are not capable of getting inflation

down we are going to have to get

substantially more aggressive and double

our rate hikes

that sort of fear and that sort of

posturing by the federal reserve and

unfriendliness so to speak is not priced

into markets

and there is a risk

that

when the federal reserve raises rates

substantially that prices

of of goods can stay elevated while all

of a sudden consumers stop spending if

consumers stop spending there is a risk

that we will have lower sales in this

year in certain quarters compared to

last year negative gdp comps mean

recession two quarters in a row you're

in recession uh and in 2021 was a big

spend year so if we don't spend more

than 2021 we will have negative gdp at

certain quarters this month or this year

which is a problem and unfortunately if

inflation remains stubbornly high even

if supply chains start bettering

themselves then unfortunately the

federal reserve will be forced to become

more aggressive increasing not only bond

yields

bonds will sell off bond yields will go

up but also increasing the risk of the

federal reserve pushing us into a

recession

now

if you believe that the federal reserve

has to become more aggressive

and if your portfolio your investable

and tradable portfolio

is

multiples of what your

actual annual income is

or it's somewhere between that that line

of being below and being multiples of to

the point where you feel comfortable

sometimes it makes sense

to wait until macroeconomic cycles

provide evidence to you that we are

either going to continue on a bull run

or we are going into a bear market

recession

this i believe is only opportune when

your investable portfolio is substantial

enough i would guess at least

three four maybe five hundred thousand

dollars to where you could actually

stand to do something if the market fell

substantially now the market falling

substantially under recession fears

could mean stocks going down to levels

that could potentially be hopefully not

lower than what we saw in march of 2020

why because the federal reserve stopped

the bleeding in march of 2020. the

federal reserve swooped in and said hey

we're going to bail everything out and

that's when the market bottomed on march

23rd you could perfectly line it up with

the fed just like the fed bailed us out

and ended the market created a bottom of

floor for the market in 1987 in 2003 at

the bottom of the dot com bubble in 2009

in february at the bottom of the 2008

recession

and of course at the end of 2018 it's

always the federal reserve that marks

the bottom when they finally relax their

aggressive and hawkish stance and if

your portfolio is large enough to

actually make a difference in your life

where if you

stepped out of the macroeconomic cycle

and got back on on a lower portion you

don't have to be perfect you don't have

to time tippy top to bottom bottom but

if you could get off on the top half and

get back on in the bottom half

if

factors continue to reiterate that

thesis

you could probably make substantial bets

you could probably find real estate

substantially cheaper you could probably

find stocks substantially cheaper than

anything that we are seeing today now i

know that prices have already come down

a lot on some stocks some stocks are

down 50 to 90 percent and folks argue

that now these stocks are cheap

possibly but nothing's going to look

cheap if we go into a recession yeah

stocks have gotten cheaper but that

doesn't mean they're cheap and so this

is where i do recommend individuals

express some prudence in their portfolio

now i want to make this crystal clear i

do not want to see a recession because

if we see a recession we are going to

see pay go down for a lot of people

maybe you negotiated higher pay but then

you get laid off

risk factor right maybe i can't monetize

youtube videos anymore because youtube

decides you know what we're turning off

advertising because we can't pay anymore

because we have no advertisers it's

entirely possible and so you have to

prepare that in a recession

that is like one of the worst things

that you could ask for next to of course

a depression which we'll talk about in

just a moment but potentially preparing

uh for for something like that is always

prudent that doesn't mean it's going to

happen and that doesn't mean you want a

confirmation bias that says every day oh

the market better be read otherwise

you're wrong that's not how

macroeconomic cycles work

so if you are deciding okay i'm gonna

sit on the sidelines here until we get a

more accommodated fed until i start

seeing evidence that inflation has

played itself out until i see evidence

that supply chain's loosening which is

barely happening but until you see

evidence that supply chains loosening is

actually translating to prices going

down then maybe it makes sense to be a

little bit more cash heavy in your

portfolio now than ever before in my

opinion that does not make you a paper

hand in a weenie baby although that is

very easy for individuals to say and

it's a uh it's very easy to say oh

somebody's a flip-flopper one day you

said by the next day you said sell

whatever

it's kind of like the titanic is one day

driving one way and the next minute

they're like oh crap we hit an iceberg

we're sinking yeah

things change

and if you want to leave mean comments

and stick your head in the sand that's

that's totally fine but then you're

probably not even watching this far

along in a video so this is where

you have to remember that macroeconomic

cycles are natural they're normal

macroeconomic cycles especially falls

and cycles remove risk speculation debt

and zombie companies from markets they

actually do

weeding they clean out the bad

macroeconomic cycles rotating to the

downside are a good thing what is not a

good thing is a depression and i can

tell you if we end up seeing

hyperinflation we could potentially see

the end of the dollar we could see the

collapse of the dollar as a monetary

system

if the federal reserve does not respond

to inflation

so this is why i think it's laughable

when individuals say oh the fed's not

going to raise rates because that's

going to increase the interest rate the

united states has to pay okay well first

of all not all of the bonds the federal

reserve has to or the government has to

make payments on uh

you know have their rates go up we have

bonds expiring at many different uh

points along the curve two years five

years 10 years 30 years right it doesn't

all float up and down right away we're

paying substantially less in interest as

a percentage of our gdp than we paid in

the 90s we could probably double the

interest we're paying we'd still be at a

90's level and with how honestly strong

the economy is right now it really

doesn't matter the united states

government could just sell bonds and uh

and raise money to to pay these higher

uh interest charges that's that's not an

argument it's the wrong argument

uh neither is the argument that uh the

federal reserve doesn't want to raise

rates because they don't want to cause a

recession during

uh an election year okay well first of

all have you heard of 2008 okay that was

a recession during an election year uh

and and second of all if if the argument

is oh but you know maybe they didn't

choose to do it in 2008 or whatever the

federal reserve has nothing to do with

politics

technically we know behind the scenes

they they collude together all the time

probably we expect that but anyway uh

what's most important to the federal

reserve is preserving the dollar

because if we don't respond to inflation

the dollar could lose its standing in

the world we already have russia making

deals with china to trade oil in euros

which is a big slap in the face to the

united states dollar as the petrodollar

the collapse of the dollar could

potentially be the worst thing that

would happen well probably would be the

worst thing that would happen sort of

like war to the united states and so the

federal reserve will act aggressively to

respond to a falling dollar or a

weakening dollar in some form the full

faith and credit in the united states

dollar must be maintained at all costs

and this means if the federal

reserve has to push us into a

minor recession which i think if if we

had a recession to be relatively minor

if they have to push us into a minor

recession to finally get inflation down

then that's what they'll do

but at least it'll prevent a

hyperinflation paul volcker style

depression in the future

by acting sooner rather than later and

so this is where it would make sense for

the federal reserve

to raise rates substantially and sooner

to do whatever they need to do to

prevent inflation and inflation

unfortunately is already here and even

if they raise rates people have so much

money businesses have so much money it's

possible the economy won't actually

contract or or reduce inflation for

quite a while at least until

a supply chains clean up then b the six

to 12 month lag goes by and rates go up

and businesses and consumers actually

need to borrow money and honestly it

could be we are fighting higher levels

inflation for the next two years

and if we had a minor recession between

now and then there could be an

opportunity if you're timing the larger

macro economic cycle to get out now and

to get back in

at a lower point in the future now

i believe this only makes sense for

those with larger portfolios just to

give you an example there are a lot of

things that i could do first of all

let's say in six to 12 months i'm wrong

and you know what we didn't have a

macroeconomic transition inflation came

down as soon as i start seeing inflation

come down or the fed become more

accommodative i'm back in this market

that might be in a month that could be

in three months that could be in six

months i could be in 12 months once

those conditions line up that's when i'm

back in the market obviously i'll send

an alert to everybody in the courses

link down below and i'll probably make

youtube videos on this as well once i

have all my thoughts put together

but that's what i'm looking for to get

back in the market so that way if i'm

wrong i'm back in

uh if i'm right and we do go through a

macroeconomic transition then i'm also

waiting for those factors to u-turn it's

just prices around me will be getting a

lot cheaper everybody keeps talking to

me about how oh but kevin if you're

sitting in cash the inflation is going

to eat your cash away that's wrong

inflation does not eat your cash away

inflation only eats your cash away if

you're spending it on stuff where the

prices are going up if i'm putting cash

aside to buy stocks and real estate in

the event the market follows i'm

actually increasing my purchasing power

by being in cash as the market falls

rather than decreasing my purchasing

power which is actually deflation not

inflation

inflation is bad if if a high proportion

of your spending is on things like

natural gas or gasoline for your car or

food or rent that's when inflation is

bad that's when your cash is trash but

if you're an investor with a larger

portfolio that's multiples the size of

your income

then you're probably best off

considering do you want to play this

macro economic cycle i think there's

still time i don't know

that we are going to see inflation go

down anytime soon and the market is

pricing in the best case scenario right

now everybody keeps telling me oh kevin

the market's pricing in uh all of this

uh this inflation going away and

everything's going to be fine i'll show

you exactly what the market is pricing

in

and it's kind of sad because it's not

good uh here we go we got a picture

it's a chart

and it shows you uh what the market is

pricing in in terms of financial

conditions

and what you're looking for is the white

line is going to tell you how much pain

or potential fed hike pain is being

priced in so let's go ahead and pull

this up right

here there we go i'll go over here in

the corner take a look at this over here

if we just zoom in

right here to that white line

you can see when we have a lot of pain

like we did at the beginning of 2020 the

white line goes up look how much pain

right now is being priced in compared to

20 20.

in 2020 we had the fed on our side

today the fed is not our friend the fed

is doing the opposite of us so shout out

to bloomberg uh for for this uh

particular article but folks

the best case scenario right now is

being priced in

if the federal reserve has to turn more

hawkish

the markets are not going to be very

happy we've seen an endless amount of

volatility so far and i just expressed

caution to everybody but i want to make

it very very clear that i believe if

your portfolio is of smaller size it

does not make sense to try to macro

economic time this cycle

if your portfolio is larger i think

there could potentially be opportunities

but you can't put the blinders on and

sit out of the market for

more than six to 12 months because

you'll get left behind

you have to be ready and able to pick up

on signals in the market that you are

either correct or that you are wrong and

you have to be willing to change your

strategy that's very very important uh

in the event

that uh i'm wrong for example i also

have opportunities and so this is

something else you should look at for

your portfolio if i sell stocks and now

i have capital gains that i have to pay

which i have to pay maybe it makes sense

for me to take that money and buy a big

multi-family building cost segregate it

and offset some of my gains in stocks

with a cost segregation on on a rental

property on a big building

maybe that makes sense talk to your cpa

if something like that makes sense for

you

so there are a lot of things that you

can do if your portfolio is is

multitudes the size of your income

if the if your portfolio is smaller it

probably doesn't make sense you should

focus more on your income then you

should focus on your portfolio

and so hopefully this provides a little

bit more insight i always want to make

sure that i'm most transparent with

everybody on this channel and i want to

make it critically clear that everybody

in the world knew

within 30 hours of me selling stocks

that i sold stocks

uh there there is no there's no hiding

uh i'm always extremely clear if i'm

short the market if i'm selling what i'm

doing the only thing i'm short on is

lucid there's a lot of misinformation

i've never been margin called right i

always want to be extremely transparent

with you and i believe that's why you

watch my channel so that way if i see

changes in the market

you hear what my perspective is on those

changes anyway hopefully this helps you

out thank you so much for watching and

we'll see in the next one goodbye