The Stock Market Could Drop 19% This Year. I’m Still Buying

Added: 2026-05-24

[00:00:00]So right now there's a lot of uncertainty in the world and the global economy right now. We got multiple active war zones going on. We're in one of them. We got tariffs going up, down, getting ruled unconstitutional, then coming back up. Then we got tech companies spending billions and billions of dollars and laying off tens of thousands of their employees. Everyone's running out of oil. Everything is getting more and more expensive. I mean, gas is $8 in California. And this is just the tip of the iceberg. And to make things even worse, every major voice in finance industry and or media outlets are sounding the alarms and saying apocalypse, the world is ending, everything's going to dust. But here's one thing that I know for certain. The stock market doesn't necessarily hates bad news. The market hates not knowing.

[00:00:36]It hates the uncertainty. And that's exactly what we have in the world right now. A whole bunch of uncertainty. And the most watched market valuation indicator just hit 220% which is way higher than the historical average of around 120%. And each time the S&P dropped at least 20% within 18 months, every single time. And the last time this happened, it was the late 1960s, the dotcom peak in the 2000s, and 2021.

[00:00:57]And I just want you to pause. I'm not saying this to stress you out, but I am saying this because if you're in your 20s or you're starting to invest, a 20% drop will happen. And it's probably one of the best opportunities to build your wealth that you'll ever get in a long time. And if you don't understand that concept, you're about to make one of the biggest mistakes that will actually hurt you in the long term when it comes to investing. Every time something happens and the market wobbles, the same type of machine turns on. Fear headlines, crash predictions, people are moving their money around, they're panic selling, doom post that turn into doom threads, everyone just starts to freak out. And it's not because everyone's lying, but because fear is one of the most viral emotions on the internet. And it's how a lot of people and these media outlets make business. So when anything remotely happens that is bad, they're going to run with it. Just think about it. If something slightly goes bad, the media will instantly turn it into some sort of apocalypse that is 10 times worse and spread it everywhere. That's how they make their money. Then everyone's watching the news or even in friends with the person who watches the news has FUD which is fear, uncertainty and doubt and misery loves company. So it just spreads towards everyone and so everyone's feeling anxious and starts freaking out, panic selling and doing bad things to their investments. And here's the thing that people don't get.

[00:01:58]The market is not just this logical place that's ran by numbers and formulas. It's a lot of psychology and human behavior. The stock market moves on emotion as much as it moves on data.

[00:02:07]It's super confusing and honestly really absurd. The moral of the story is that what you see is not necessarily the full picture. And the people who lose money during these crashes or during kind of times of uncertainty are never really taken out by the crash itself. They usually get taken out by the decisions that they make while they're still in the middle of it, while everything's kind of popping off. They're not prepared. They sell. They lock in the losses. They panic and then freak out and they have a lot of stress and anxiety. And then once the market recovers, they're not in it anymore or they didn't take advantage of any dip.

[00:02:36]So here's what I'm going to do. I'm going to show you these warning signs and how you kind of get prepared. Then I'm going to show you why these signals and kind of, you know, all these doom and gloom headlines are not the reason to be scared about. They are reason to be ready. All right, so here's a quick synopsis of things that is kind of happening right now in the global economy and the stock market. I'm just going to give you kind of what you kind of need to know and what's out there.

[00:02:54]And I'm just going to walk through this really fast, but I want you to really understand that the market, it doesn't necessarily hate bad news, but it hates uncertainty. So there's a lot of volatility in the stock market. And right now, uncertainty is everywhere you look. First, we have a bunch of active war zones. We still have Russia and Ukraine. We have the stuff that's happening in the Middle East. Then we have a bunch of like kind of civil unrest with a lot of different countries. Talk about Nepal, even like the Philippines and you know, Indonesia.

[00:03:16]There's a lot of stuff going on right now in the kind of global economy. And then of course, if you haven't been living on the rock, we got the straight of Hor Moose. A lot of things happening right now. In the past few days, there was a ceasefire and then now we have like a blockade. And I'm sure by the time I upload this, there's going to be another new kind of installment to this news. But a lot of things that's not really good that's happening. a lot of war, a lot of, you know, oil and supply that's kind of like getting kind of messed up. It's a lot of uncertainty.

[00:03:39]And then we also have stuff with the tariffs. The one that Trump kind of like dropped on all of us in April 15th, liberation day, he caused a lot of like havoc in the stock market, a lot of havoc in just the global economy and the business. And then the Supreme Court kind of like struck it down, but then he still has like another tariff. And then some companies are also trying to get, you know, refunds from that initial tariff like USPS or like Amazon. So, a lot of like weird stuff is going on right now, too. And then you also have the question about the AI bubble. What's happening? Tech companies are spending, you know, hundreds of billions of dollars into this AI infrastructure.

[00:04:10]Some of them don't have that much revenue to kind of show for it. They're just spending billions and billions and billions of dollars going into debt. But the ROI on the math kind of looks a little uncertain. So, a lot of people are worried about that. Is AI, you know, just another bubble similar to the.com bust. And so, a lot of people are really, really anxious about that. I, for one, am too. Then we have a lot of stuff about jobs, inflations, and the Feds. Job reports have been soft. Then we have a bunch of tech layoffs. I think Oracle has laid off like 30,000 of their employees, which is insane. And of course, we still have inflation, which is kind of sticky. It's not as bad as, you know, 2022, but it's not gone. And so the Fed is feeling a lot of pressure with that, especially from, you know, the presidents. A lot of things is kind of happening. This government is kind of, you know, going crazy. It's not really making it easy for us investors or us people. And on top of all that, you have all these controversial, you know, things. I'm not even sure if I'm allowed to like mention it, but you got stuff about, you know, the island, the political drama. You have the Diddy's situation. There's just a lot of just culture war cycles kind of like things that are happening in society that is adding just to the noise. There's a lot of just random things happening that is going on. I'm not here to tell you that any of these individually are, you know, catastrophic. But I want you to just feel the cumulative weights of it all.

[00:05:17]And I'm sure I even missed a few things.

[00:05:18]And there's also three numbers that kind of put a point to it. And the first one I want to show you is the Buffett indicator. And right now it's at 220%. I mentioned a lot earlier. And the historical average for this is literally 120%. So when things are kind of sky-high like that, it usually means things are a little bit overvalued. So stock market's overvalued, the prices are and that's obviously not a good sign because market always kind of selforrects eventually. Everything will eventually return to homeostasis. So if things are overvalued, then that means you know deeper crash or maybe another correction is due. I don't know. I don't have a crystal ball. Not financial advice, but that's just what the numbers show us. And we also see Bridge Hway, one of the biggest companies. You know, this is Warren Buffett's baby. They're actually holding around $382 billion in cash for 12 straight quarters. Now, this itself doesn't necessarily mean anything, but if a company who invests into undervalued companies, as they do, holds a bunch of cash, it kind of has you question like, why are they hoarding a bunch of cash? Do they think something's going to happen? Do they think there's going to be better opportunities? Let's just hold this cash. You know, that just gives you a little more certainty or things to kind of consider. And also, historically, the S&P 500 entered a 10% or more correction in 12 of the last 17 midterm years. And we also have prediction markets showing, you know, a really high chance of 11 plus percentage drop in 2026. And these things surprisingly are pretty accurate when it comes to predicting certain things, you know, and this is kind of, you know, just the honest picture. Just a lot of uncertainty all at once. Nobody really understands what they're doing.

[00:06:39]But the one thing that kind of stays for certain is my investment strategy and what I'm doing with my money, how I'm kind of acting when it comes to my personal finance. And I'm not changing a single thing about how I invest or use my money, any of it. And here's why.

[00:06:50]Real quick though, if you want to start investing, I have a free five steps to investing checklist perfect for beginners that will walk you through how to build your entire portfolio from scratch, what to sign up for, what to look, and I have my entire portfolio in there. So, if you want to check that out for free, I'll put the link in the description down below. All right, I want to show you something because it's really easy to look at the stock market and want to freak out, but let's just take a second and zoom out. This is the chart of the S&P 500 over the past, you know, 100 years. If you don't know, the S&P 500 is basically just 500 the top large companies in the US stock market.

[00:07:18]And whenever a company falls off or does bad, another one will just automatically take its place. So it's a self-correcting mechanism. And people look at S&P 500 as a way to kind of just track the market because these are the top, you know, companies in the stock market. And if you see here, if you zoom out, the stock market generally goes up.

[00:07:34]Now, there's a lot of different reasons why that may be, but the key concept is over time it, you know, goes up. Even though there's, you know, world wars, you see over here, World War II, the Korean War, Vietnam war, and then we have over COVID. Maybe you have every single kind of like catastrophic or cataclysmic event that's happened that changes, you know, life and people think that's the end of the world or there's like the market's going to crash. And another concept that I really want you to stick with is that there's always going to be, you know, bad days. There's always going to be wars. There's always going to be some sort of, you know, pandemic or some sort of crash. These things are normal. They happen. It's predictable. If you look at all the data, we can see here that bare markets, you know, when the market is going down, it lasts around 9.6 months, you know, on average. But bull market when the market goes up lasts on average around 2.7 years, right? So, and the reason why I'm showing you this is that it pays well to be a little more optimistic when it comes to investing. And so, that's what I really want you to kind of leave with.

[00:08:26]Every single thing that feels like the end of the world, you know, wars, financial collapses, pandemic, once you zoom out, it's just a tiny dip on that chart. Things will always happen, but eventually and kind of, you know, since inception, the market does rebound. Now, let's take a second to zoom in into March 2020. There's an article by CNBC that reported that how the S&P 500 dropped around 34% in just 33 days. It was honestly wild from its February 19th peak to its March 23rd, you know, drop.

[00:08:49]That was like one of the fastest 30% decline in the index recorded history.

[00:08:53]And honestly, my portfolio looked like it was on fire. But I kept buying. Every single paycheck doesn't really matter.

[00:08:59]50% of whatever that came in went right straight back into the stock market. And by December 31st in 2020, according to the S&P 500 closing price, the index has climbed over 68% from that March low.

[00:09:10]Then if we go back to 2022, the same index dropped 25% from it January 3rd peak to its October 12th low. And people said that this was the start of a decade long slide and we're going to see a lot of flatness or maybe a decline in the S&P 500 or the US economy. However, the S&P 500 climbed over 60% from the October low through 2024. Now, that's just like not two random, you know, lucky data points. There are about 26 bare markets in S&P 500's, you know, history. And since the SPF 100 was created in 1957 at around, you know, 50 points, it has grown to over $5,000, you know, today. More than 100 times higher.

[00:09:44]And every single bare market in between was a buying opportunity for anyone who stayed in and was, you know, able to invest. And also, some of the best companies that built, you know, generational wealth were created during the chaos, during the storm. You know, Uber was found in 2009. Airbnb lost in 2008. Slack's parent company started in 2009. Warren Buffett once said, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." Now, he said that in this 1986 Birkshshire annual letter and based on every single DM and comment that I've been getting right now, a lot of you guys are really fearful. You guys are afraid that your polar is going to drop if it's the right time to invest.

[00:10:17]What if the market keeps crashing? And so, according to this framework, you know, Warren Buffett, this is exactly when you want to be in the market and to be investing, not running away from it.

[00:10:25]And so, here's what I'm actually doing right now with my money. I always automate weekly buys into VTSAX. It's just like a mutual fund version of VTI.

[00:10:32]It just covers the entire stock market and I had that ever since I started investing and I will basically never touch that. I will always have that, you know, until I retire. But I am doing something new. I'm adding a lot more international exposure to my portfolios through an index fund called VXUS. I've realized ever since this crash that I am very very tech heavy and in the past I was okay with it because I'm young. I want growth. But as kind of things kind of slide, I'm realizing I should probably be a a tad more diversified, not just in tech, because when tech went down, you know, my portfolio really hit it. So, I'm working on adding more, you know, international exposure to my portfolio. And I'm also holding a little more cash than usual, but I have a kind of good excuses, I guess. First, I want an emergency fund. Everything's kind of happening right now. I rent right now, so I kind of need money in case, you know, things hit the fan even worse, but also I just want more money stacked up in case there's any more buying opportunities. But also, I have to pay my taxes, which I just paid today. It's April 15th. That was way too much money.

[00:11:28]So, now I'm literally I don't have that much cash anymore. But regardless, my strategy has really stayed the same. I'm still investing. I'm still dollar cost averaging. I'm not panicking, but I'm also not throwing all my money into the stock market. I'm being a little more intentional just because I have a lot more expenses. And also, I don't want to have that stress and FOMO of trying to, you know, always pick the right stocks and be at the right time. I kind of just want my money to be working hard for me and I don't really want to think about it too much. And that's kind of my strategy and it's kind of been working out. And I will say this before we get into the playbook. Over years of doing this, I realized that the best return on investment that you'll ever make, the best thing that you can invest in is yourself. It sounds cheesy, but seriously, in your skills, your business, your own knowledge, in your own like happiness, you will always be the best investments. The markets will always recover. Yeah. Yeah. Yeah.

[00:12:08]Investing is super important, of course.

[00:12:09]But compounding your own capabilities in your own life, well, that is always worth it to me. All right. I basically have four rules when it comes to investing and what I do with my money.

[00:12:17]And I don't really break them no matter what the stock market is doing. no matter what's happening. So, rule number one is to have an emergency fund first.

[00:12:25]And this is probably one of the things that most people skip because it's like it's boring, you know, emergency uh they want to live life on the edge, but it's one of the exact reasons why people get forced, you know, out of the stock market or forced into credit card debt, even worse at the worst possible moment.

[00:12:37]And the point of having emergency fund is obviously in case any emergency were to happen. You know, a car repair, medical bill, or a job loss, maybe you get laid off or anything. Nowadays, you sneeze the wrong way, it's $500. So if you don't have that cash cushion, then most people will either be forced to, you know, sell investments to cover, especially if you have to sell some stocks, you know, you saw the bottom, you lock in a loss, then the market recovers, you know, 6 months later, and now you're on the sidelines and you didn't really take advantage of any of that growth. The reason why it's so important psychologically to have, you know, emergency fund is because it allows you to one stress less, but also feel more comfortable taking more risk, which I really, really, you know, encourage. I encourage people to take risk. And this is because, you know, subconsciously that you have an emergency fund. and if something were to happen, you'll be okay. And just having that knowledge that you'll be okay if anything were to happen, well, that makes, you know, a big difference. And I usually keep my emergency fund in a high yield savings account just so it pays me a little more in interest. If you keep it in any of those big banks like Wells Fargo, Bank of America, Chase, you'll get like.1% in interest, which is like literally nothing. But if you do a high yield savings account, which will give you anywhere between, you know, 3% to even as high as like 4.2% in interest, well, at least you're making passive income on your money, or at least when you go against inflation, you're fighting it fighting it off. And so in the high yield savings account, I usually put around three to six months of my living expenses in there or maybe savings for any other savings goal like a down payment on a house or for travel.

[00:13:52]But any savings is not in my regular bank account. It's all in my high savings account. So it earns interest and it protects my money from inflation.

[00:13:59]This step always comes first. You really want to make sure that your bases are, you know, covered before you go on kind of the offense. And so before you invest, before you make your brokerage contributions, without it, rules two, three, and four don't really matter. One bad month will break the entire system and have you in debts. And that's what we want to avoid. Rule number two is to automate it. A lot of people make mistakes when it comes to investing and lose money because they just get emotional and they sell or they don't invest when things dip. So every pay period, every single month, every single week, money goes out of my bank account into the stock market no matter what. I set that up when I first started and I have it running, you know, for years and I'll never stop it again. I set it once and I don't care the stock market's up or down. My money is getting put to work. And again, the real reason why this works is really simple. when you're manually deciding every single week or every single month to invest while the market is either going up or going down, your brain will always find a reason to maybe wait or not invest. So, automating everything removes that decision entirely. And so, for me, again, my core position is VTSAX and VO, which gives me exposure to, you know, hundreds of different companies in the US stock market. And so, every single week, money goes out of my bank account again into there without me having to touch and lift a finger. And then rule number three, and this might be a little weird, is to focus on increasing your income.

[00:15:10]It doesn't matter if we're in a market recession or whatever. Figuring out how to increase your income should always be like one of the main priorities when it comes to building wealth. And that's because, you know, investing is cool, but you can only invest how much you save. You can only save how much you earn. So, a lot of people don't like to talk about this. They only talk about investing, but the the most important part about investing is having money in the first place to be able to invest.

[00:15:31]And so focusing on increasing your income maybe through a side hustle, maybe through business, getting more education, you know, a side hustle, maybe I said that already, but somewhere somehow where you can increase the amount of money that you make so you can increase the amount you save and increase how much you invest. And that money that you invest will compound you faster and faster and faster. So rule number three is always figure out how to increase your income, how to increase your earning capacity. And that is the most important thing you can do on this list. But rule number four is to not tinker anything. And I understand when the market's falling, the urge to do something becomes overwhelming to sell everything, move to bonds, rotate to whatever, you know, drop the lease or just wait, you know, all in cash.

[00:16:03]However, that urge is really the enemy.

[00:16:05]There was even this study by Barbers and Odin's Landmark study that talked about this in the 2000s, and it analyzed over 66,000 real retail brokerage accounts from 1991 to 1996. And I found out that households that traded the most earned an annual return of 11.4%. Market that year jumped around 17.9% over the same, you know, period. That's a 6.5 percentage point gap every single year from just touching a portfolio too much from just tinkering around. How many times when the market drops are you looking at portfolio watching your portfolio go up or either down? It's just anxiety ridden, you know, stress that you don't necessarily need. You can look at it when you're making contribution. You can look at it when you're investing. But if you're not doing it, just leave it alone. Don't try to tinker it too much. It's really not worth it. Just focus on yourself and focus on what you can control. And again, I was not running all four of these perfectly the first time I went through a real crash or a real draw down. I got most of it right and then kind of figured the rest, you know, the hard way. And what is different now is that like I kind of have a system of, you know, the automations kind of, you know, those concepts running in the background without having me to figure out or be brave about. And that's what I'm doing with this video right now. I'm hopefully that you guys learn from this.

[00:17:08]Hopefully you guys can be okay when the next things happen. You know, the market may crash again. I don't know what's going to happen, honestly. And the people who get really rich in the crash are never the ones who are trying to predict it. They're the ones who are just have a system when it arrived and they're ready to take advantage. And trust me, I made plenty of mistakes on the way getting there. And if you want to see them, check out this video right here. I'll link it right here. And of course, if you enjoy it, please like and subscribe. It means the world to me. The next time.