Vinney: Dear friends, Vinney Chopra back again.
Hey, I've got a great friend and a super teacher in financial stock
market and all the, you might have seen a lot of gurus or listened to
and watch you haven't seen anything.
What we are gonna discuss today is gonna blow your mind.
And Amit Chan is here.
My very good friend, a great teacher, so hold on if you're in the car.
Go ahead and listen to it, but come back to your office and open up the YouTube
and look at the whole presentation live.
Thank you.
Chandan.
Chand.
Amit, how are you brother?
You are smell chandan in India is the beautiful wood that gives fragrance,
and I always say that, Amit, you bring so much fragrance in financial terms,
financial, stock market, and how to really grow your money and how to look at.
Everything happening in our country, US is going through some big turmoil,
as so I'm very excited to have you.
God bless you.
Amit: Hello Viji.
Thank you so much for having me here.
That's exactly what I'm gonna do.
As in the past I've done a couple podcasts with you.
So today I am going to discuss what's happening in the markets Yes.
And how it impacts the financial markets for that matter.
Yeah.
And any of your people who wanna learn from me, I run a, a. I
provide the service for free.
There is a free course that I've created.
We have a free telegram community.
Towards the end, I'll share that information, but just go
to www.informedandinvested.com.
Again, www do informed and invested.com.
Yes.
Sign up to our free course and you'll start to learn foundational information
about invest investing in the equity market that you'd be surprised that
many seasoned investors don't even know.
So thank you for having me.
I, your energy's always fantastic and I can't wait to get started.
Vinney: Thank you so much.
I'm so blessed to have you really, and we'll do more of these and I'll
bring to my community, your teachings because they will be informed.
And you just shared with me some of the investors made $150,000.
Somebody made $180,000 that.
Mind blowing, that's like a whole years of salary or maybe even three times
of salary of some people, watching us.
So it's fantastic to have you.
Amit: Wonderful.
It's, my purpose is to share knowledge.
I'm not giving any financial advice.
No.
But based on that knowledge, if people learn it I think it could do wonders
for individuals at the very least, they'll make informed and educated
decisions, because most of the time people are just gambling with their money.
Vinney: Yes.
Amit: So today what I've done, I'm gonna share my screen with you today.
What I've done is I have created a a presentation for you.
Yeah.
And the presentation is on what's happening in the market.
I call it basically market analysis.
So my question is, can you see my screen?
Vinney: Yes,
Amit: totally.
Okay.
Wonderful, Steve.
Yeah.
So perfect.
So let's get going.
So essentially this is just a legal disclaimer.
So before I continue, like I'm not a financial advisor, I'm not giving
any kind of financial recommendation or any kind of advice in this.
Yeah.
So please consult your own financial,
Attorneys, accountants, et cetera for that information.
Or make sure you know what you're investing is wise,
because investments carry risks.
Yes.
Everything we're doing here is for educational purposes only.
Vinney: Yes.
Okay.
Amit: So the very first thing I wanna talk to you guys about is what's
actually happening in the market.
So here's a chart that shows that what has the performance been of the
s and p 500, the Dow Jones Industrial Nasdaq, and the Russell 2000.
So the line chart that you notice here, this is the s and p 500, so s and p
500 since the beginning of this year.
As of yesterday has dipped by minus 4.28%, so s and p 500 has gone down.
And what is s and p 500?
It's a collection of 500 top highest market cap companies that are
tracked in the the, in this index.
I. The second is Dow Jones Industrial.
Dow Jones Industrial has also shown a negative return since the beginning
of this year, which is minus 1.16%.
Nasdaq, which is pro predominantly technology related
companies is down by 6.32%.
And finally, Russell 2000, which is small to companies, are minus 7.73%.
So everything's down.
And and the question is why?
So let's analyze some of that.
And what I think is happening in the markets.
So one of the biggest reasons that the market has dipped recently is that
the trade war is heating up again.
Yeah.
So as on March 4th, 2025, president Donald Trump raised
tariffs, which is what he raised.
He imposed 25% import tariffs on imports from Canada and Mexico,
and he also doubled the tariffs on Chinese goods from 10% to 20%.
So caution is what happens next?
What happened next immediately was that China hit back on March 10th.
They slapped on us 10 to 15% tariffs on all the US imports that are going there.
Canada also followed suit, and they said, we're gonna charge 25% tariffs
on $155 billion worth of US goods.
Yes.
And Mexico, while they're also joining their plans for counter tariffs and
they're expected to start in early April.
Now let's talk about how this is affecting the US economy.
So first there was a rush to import goods before the tariffs set.
Okay.
So just before the tariffs were hit, which was, 4th of March, the US
importers who were supposed to bring in imports or bring in products from
other countries like Canada, Mexico or China, they increased their imports.
What that did was there was a sudden.
Spike in demand, and that caused a short term jump in inflation.
Because business were trying to beat the clock and then came a stock market drop.
So s and p 500 immediately took a drop.
And the reason is that investors got nervous.
They got nervous because of rising costs.
They got nervous because of shrinking a potential shrinkage in corporate profits
and worries about us, a growth slowdown and all these things start to play a role.
And this doesn't just stop there.
Essentially, higher tariffs mean higher import costs, and that makes
everyday goods more expensive for consumers in the United States.
And when household budgets get squeezed, what do people do?
They start cutting back, especially on non-essentials, and that hits retail
sales and that drags down the GDP.
So for companies, it's essentially a double whammy.
A lot of US businesses depend on imports from Canada, Mexico, and China.
Now their costs are up and their profit margins are going to shrink, right?
And that can mean hiring, freezes, wage cuts, and even price hikes to stay afloat.
So these businesses are gonna raise their prices just so they can keep surviving.
Now, when you put it all together, which is rising costs, falling demands, and
investor uncertainty, what do you get?
You get fear of recession.
Now, it's not a guarantee, right?
There's not a guarantee that they're gonna be a recession, but
there is a growing concern for a recession in late 2025 or in 2026.
So let's talk a little about what's really going on in the economy,
because there is a lot of talk about inflation and recession, right?
Yes.
And it's easy to get confused.
So I wanna just take some smog outta that.
Vinney: Yes.
Yes.
So first of all,
Amit: what is inflation?
Inflation just means that prices are going up.
Okay, so grocery cost, gas, cost, rent, everything starts to cost more.
If you were to buy a burger from McDonald's this year, next year,
it's going to get more expensive.
That's inflation.
Okay?
Now, when people and investors start to worry about inflation.
They expect prices are going to keep rising.
Yeah.
And that creates a chain reaction, especially in the bond market.
And I'm gonna talk about the bond market because it's very telling
of what's actually happening.
And few people know how to analyze and understand and understand the correlation
between bond prices, bond deals, and the stock market and how it impacts
recession or economy for that matter.
So here's how this works when inflation is a concern.
Investors want their money to keep up with rising prices.
Yes, obviously.
So what they do is they say, okay, I want a better return for my money.
But what happens is, because a lot of them hold onto older bonds.
So Bond is a safe place where people put money, right?
And Bond is, let's just say US Treasuries, for example.
They're backed by the United States government, which is a very safe,
backer off their investments.
So people put their money in the bonds.
So what happens is when people expect higher returns, but they're
holding bonds that don't provide higher returns from the past, what
they do is they sell those bonds.
They sell those bonds, and they buy newer bonds that have a better yield.
But when lots of people start selling bonds at the same time, and what
that does is it pushes the price down because the supply goes up.
Yeah.
Yes.
And here's something important to know.
When bond prices go down, their yield goes up.
Why?
Because there is an inverse relationship between bond prices and bond yield.
So if I say bond price dollar is inversely proportional to bond yield.
And what is yield?
Yield is basically rate of return.
Yep.
Sure.
So there is an inverse relationship.
So when bond prices go go up, the yield goes down.
And that's just how the bond market works because they move
in the opposite direction.
Now when the inflation really starts to heat up, the federal reserve
usually steps in to control inflation.
And what do they do?
They increase interest rates to cool things off.
And you notice that happened very recently, just when the feds
increased the interest rates.
What that does is it makes borrowing more expensive.
I. Which slows down spending and helps inflation come under control.
And why does it why does borrow come?
Under control?
Because when money becomes expensive, businesses stop taking loans.
Also, people stop taking loans because it gets very expensive.
And hence the flow or the availability of cash in the world or the market reduces.
Yeah.
And then people who would've otherwise taken money, they don't take
money, so they stop buying things.
So the demand of things goes down.
And then, you know what?
Markets start to cool down.
But rising interests also makes new bonds more attractive.
Okay?
So when feds rate raise interest rates, that also means the bond yields go up.
And because bonds are gonna start giving higher interest rates, then
what investors do is they dump old bonds and they buy new bonds.
All right, so that's exactly what I was saying earlier.
So the question is that what is happening right now?
In other words.
Is there a risk of inflation?
Which produces all these side effects and symptoms that I showed talked about.
The answer is no.
That's actually not what is happening.
See, what happened was in early March, if you remember, the stock
market took a big dump, right?
But in early March, the bond deals also dropped.
So here are the bond deals.
Vinney: Yes.
Amit: Wow.
The green line represents a 10 year US bond deal.
So the bond deal started to drop in early March, and it tells us that investors
are buying more bonds, not selling them.
Remember previously I was saying they would sell old bonds with
lower yields and buy newer bonds.
This time they're not selling old bonds.
They're actually just starting to buy new and new bonds.
And how do we know that?
Because the bond prices went up.
Because the demand increased.
So bond prices went up, and when the bond prices go up, the yield goes down.
And where's the money for the bond pro?
Where's the money coming in to buy these bonds?
People are selling people sold stocks and put money in the bonds.
Yeah.
People sold stocks and they put money in the bonds, and why would they sell stocks?
Because they thought if the market is going to cool down or slow down,
then that means these businesses are not going to do that well, and the
business is not gonna do that well.
That means they're losing confidence in businesses.
They're gonna take money outta businesses and put it in bonds,
which is a safer investment.
That means that they're not scared of infl inflation.
What they're actually scared about is a possible economic slowdown
and that slowdown can reach into and and lead to a recession.
But what happened?
So while this happened in, in early May, then s sorry.
In early March, soon after that, the the bond deals started to stabilize and also
the bond prices started to stabilize.
Vinney: Yes.
What does
Amit: that mean?
That means the market is no longer in a panic mode, so people are on the
edge and that we definitely know what they're doing is they're watching
to see whether inflation is going to increase or whether recessionary risks
or fears are gonna become more realistic.
In other words, which is gonna be a bigger threat.
So here's the bottom line.
If the inflation is the fear, so I have a chart here.
If inflation is a fear, what happens is the bond deals increase.
And the bond prices go down because they're inversely related
and interest rates increase.
But if a recession is the fear, then bond deals go down.
Bond prices go up and interest rates also go up.
So we're gonna have to wait and watch what actually happens because
we are right now in that flux.
There was fear earlier.
Now there's markets starting to stop panicking that much I. Yeah,
Vinney: but looks like, isn't it, the Fed is saying they're
not gonna cut the interest rate.
They held it stationary last week and they might do it in
like later part of this year.
I think I
Amit: heard that's right, and I, that's a very good point because after a couple
slides I'm gonna talk exactly about that.
But before I speak about that, I wanna talk to you guys about GDP and what
we are seeing happening in the GDP, which is a gross domestic product.
Yes.
There is a an agency in the US called Atlanta Fed.
So the federal agencies in the us there are several of them.
One of them is Atlanta Fed.
And what Atlanta Fed does different from others, and it's very cool is that it
monitors the real time performance of the GDP, whereas rest of the places.
They will find out, I think a little while after that.
How did the G two select maybe how was the last quarter?
Atlanta Fed monitors it in real time.
So I have figures as of yesterday and I'm gonna show you what they're showing.
So here is and I got, again, here's the source.
So Atlanta Fed.
You guys can go and just check it out.
So here's a chart that shows.
The evolution of of the GDP in the quarter one of 2022.
So you'll notice that the GDP consensus was that it was just north of 2% all
the way until sometime in late February.
And look after that, there was a huge dump, and then prices started
to, or the GDP started to stabilize.
So why did this dump happen?
Which means and here's a chart that also signifies or displays the same thing.
So on 26th of February, the GDP was expected to be at 2.3% annualized.
Okay, so based on the figures that were coming in, there
are a whole bunch of figures.
They look at the consumer price index, their equipment manufacturing
residential yields, import, export, et cetera, et look at all kinds of things
to see or all kinds of variables just to assess what the, what's happening
in the gdp, is it growing and if so, what rate at an annualized basis.
So as of 26th of every three as of 26th of February, everything was hunky dory.
On 28th of February, the GDP started to turn negative minus 1.5.
So it went from 2.3 to minus 1.5, and that's a huge jump.
And then a few days after that, it went to minus 2.8.
Why?
And suddenly, even if you look at right now, the GDP is currently
showing up until 18th of March, which was just a couple days ago, right?
Yes.
So up until 18th of March, it was showing that the GDP is at minus 1.8.
Yes.
So question is what happened?
I'm gonna bring your attention to a point which I also raised earlier on my slide.
If you notice, export the line of exports.
Notice everything.
Positive.
Suddenly minus 2.7.
And when did that happen?
Yes, just on the 3rd of March.
Yes.
So why?
And this is net exports.
Net exports and net exports is import minus export.
So it shows that there, it there became a deficit.
That means in us imported so much suddenly.
Yeah.
That it started to show a negative impact on the GDP, it started to show
that GDPs actually going negatively.
Why did that happen?
The reason that happened, the reason that happened on the 3rd of March is
because on the 4th of March, Donald Trump was going to impose tariffs.
So what the importers in the US did was that anything they had to import, let's
say, a little while in the future, they said, let's just import it right now.
So I don't have to pay that much duty.
Otherwise the things that I'm importing are going to cost more and
my profit margin is gonna go down.
So this suddenly imported a lot, and so the net exports.
Became negative, and that started to show a sudden spike in the G'S degradation.
Now, ever since then, the GDP has now slowly started to go back up.
Now it's still in the negative territory, but slowly started to go back up.
And why has that happened?
Because the, I guess that sudden net negative export.
The net export is not that negative anymore.
So if you have a look, it's, it's started to go down.
So minus 2.2, minus 2.1, 2.6, 0.7, et cetera, et cetera.
Okay.
So that was the sudden effect of what happened.
Now, if the GDP remains negative for two straight quarters, that by book.
It's called a recession.
This recession.
Yes.
So we'll wait and see what happens.
If that really happens, then you know, we'll wait and watch what that does.
Now, the question that you asked about the the interest rates going down.
Interest rates, yes.
So we have to discuss that.
So we should turn our attention to feds, because that is a big question.
Will they start cutting interest rates this year?
We know that an, an FOMC meeting was just held last week, and they
decided not to cut interest rates.
Why did they decide not to cut interest rates?
Because they thought everything was still under control.
The inflation hasn't gone up drastically, which means things haven't become
expensive because if things become expensive, they become expensive because
of demand, and the demand is too high.
They have to raise interest rates to bring the demand low.
Why?
Because the flow of money is gonna go, they want the flow of money to reduce.
Yeah, so they didn't do that.
They thought, everything is okay right now.
We don't need to be that worried.
But what is what is the forecast of the FOMC?
So here's a, here's something that I get.
This is these are target rate cuts and this is information as
available freely in CME group.com.
You can just go and download, and I like to look at these very regularly.
So what this shows is, what is the possibility of interest
rate cuts in different.
Times this year.
So the very first one I have here is June.
So currently, as the interest rate is between 4.25 and 4.5%.
Or no, actually, sorry, it's between 404.25%.
This is the current one?
Yeah.
So it's expected that in June the interest rate will remain the same,
but in September it's expected that the interest rates will be cut down
by 25 basis points two, 3.75 and 4%.
And what is the probability of that?
42.8%. Again, these are probabilities.
These can change.
But as of the way things currently stand, this is expectation.
And then in December, again, there is an expectation of a rate cut to 3.5
to 3.75, again, by 25 basis points.
Okay.
So here are the four reasons why I think the feds might cut interest
rates if the falling happen, right?
So number one, GDP stays weak.
So if the economy continues to slow down, and especially if the quarter
two GDP goes negative, the US will technically be in a recession, as I just
mentioned a little while ago, right?
That's when the feds are gonna step in and they're gonna say, okay, let's cut the
interest rates to jumpstart the economy.
And let companies start taking money and start doing investments.
Second if the unemployment jumps, which means if people, more people get laid off.
So right now, most job losses are in tech and government sectors, and I have
a slide that will discuss that as well.
But if the layoff spread across other sectors and the unemployment rises
sharply, then the feds are going to come in the act and, save the labor market.
Next, if the inflation cools down.
So if the inflation continues to ease on its own because of weak demand.
Remember, inflation goes up because their demand is too high.
Higher inflation goes down because there's not enough demand.
Then the feds will have to come in and give some breathing room to the
economy by cutting interest rates, but the inflation stays sticky.
Then they'll hold off.
Now, why did they hold off?
Because inflation fears are there, so they're thinking it's sticky right now.
They're like, okay, we're not gonna raise it, but we're gonna
keep it unchanged at this time.
That's why they didn't change it this time.
Next financial market instability.
So if there's a certain market crash or a surge in panic we've seen before.
So similar to think back, what happened in 2019 with the trade war.
So the feds at that time can step in and.
Cut the sta, cut the interest rates and stabilize economy.
But if, just for your knowledge, for those of you who may have forgotten,
2019 was Mr. Whit when President Donald Trump also had a trade war with the, with
China, and there was a dip in the market.
So they had come in to help out that time too.
So as I mentioned, the first rate cut is expected in June 2nd in September.
And potentially a third one in December, and we'll see what happens.
But if the data keeps pointing towards weakness and inflation keeps falling,
rate cuts would probably come sooner.
Sooner.
Vinney: Yeah.
Amit: But if inflation again proves sticky, or if the growth rebounds,
then these cuts may be delayed.
So we all have to wait and watch what really happens.
Again, nobody has a crystal ball.
This is all, these are all decision based in a very dynamic market movement.
Okay, so now let's talk what actually happens when the feds
start cutting interest rates and there's some good news for a person
like you who's in real estate.
Yes, I'll talk about that.
I love
Vinney: it for sure.
I can't wait.
Can't wait for the market to turn because it's been pretty tough
Amit: last three years, as that's right.
That's, I knew you'd have you'd love what I'm about to say soon.
So here's what, when interest rates get cut this is what
actually starts happening.
So number one.
Stock market tends to rise.
So why?
Yeah, because lower interest rate makes borrowing cheaper.
So now of course not gonna happen in the big giant companies.
They're very resilient essentially.
But of course their stocks are also gonna go up.
But real effect happens in smaller companies.
So the companies that are in Russell 2000, for example, so small to mid-size
companies that depend heavily on debt.
Two run their programs to do our research and development to hire people.
They suddenly get access to money and they start taking that money and restart the
programs that they had paused for a while.
Suddenly there is an uptick there.
So when they start spending, then the expectation is that their profits are
gonna increase and the profit increases.
That increases the fair market value of that stock.
And when that happens, the stock price jumps.
So then that causes a ripple effect in throughout the stock market.
So that's a number one thing that's gonna happen.
Number two, borrow is gonna go up.
So as interest rates fall.
Loans become cheaper.
So consumers start buying more homes, more cars.
And yes, they're also gonna start swiping their credit cards a little more.
And businesses also start boring, as I mentioned earlier,
to invest higher and expand.
And this is all designed to jumpstart the economy.
But there's also a downside when the interest rate is brought down,
the US dollar starts to weaken.
And why?
Because when the interest rate goes down.
That means the yields on the US Treasury also go down, and when the yields go
down, that means this US currency becomes less attractive to foreigners because
they spent, they will invest less, they'll take money out of treasuries, or
they'll invest less in the treasuries.
So when that happens, the demand for US dollar also goes
down and with a US dollar.
Demand goes down, that weakens a US dollar.
But guess what?
That's actually not all bad because a weaker dollar makes us exports
cheaper for international buyers.
Yes.
So that boosts their sales.
And here's a correlation with the stock market, the multinational
companies that sell in other countries.
What happens to them is when they convert their earnings from the foreign currency
into US dollar, they get higher U dollars.
US dollars.
Yeah.
When they get higher US dollars, that means their revenue goes up.
Yeah.
And when their revenue goes up, again, the fair market value of their stock
goes up and their stock prices go up.
So there is a corelation, which means, it's all it's all things
will work out essentially.
But in some, the other thing is that the, that when the interest rate goes down.
Then the mortgage rates also go down, which is good for a person like you, and
therefore those buyers who are looking to buy homes or who are looking to refinance
they also are able to take out that money.
Vinney: Multifamily hotel, senior living, whatever.
That's right.
They want to buy and consequently.
Sorry, go ahead.
Go.
This is very interesting.
No, now I was gonna say the lower the interest rate, like I have
some loans I got at 3.73%, 10 year fixed and 3.89 and 4.2%.
It's a investors' dream to have those kind of interest rates.
So the lower the interest rates, the better it is.
You could buy much part larger commercial assets.
Amit: A hundred percent and like you're a fund manager.
Similarly, REITs real estate investment trusts, which can be purchased just
like a stock in the stock market.
Because they invest in real estate and their cost of borrow and working goes
down because of lower interest rates.
Guess what?
The REITs start to do
Vinney: yeah.
Amit: This also has an effect on growth and tech stocks.
Yes, because these company companies rely on cheap capital to fund their
growth cheap debt, and when the rates drop, their future earnings
become more valuable in today's term, which boosts their stock price.
I. But what about some sectors that are not gonna do well?
'cause that's also gonna happen.
And what are these sectors?
The sectors that don't do well when the interest rate goes
down are energy and commodities.
Why?
Because a weaker dollar can push the oil and commodity prices up.
Because us has to import the money, import these commodities, which are not
necessarily being produced in the us.
So if they come from another country and the US dollar is weaker now
they suddenly have to spend more money to buy the same product.
And when they have to spend more money, then those utilities
or services become expenses.
Vinney: Yeah,
Amit: exactly.
And, but if rate cuts signal recession fear, then what happens is.
The demand for oil also will drop, bringing the prices back up.
So that's like a buffer that works in there.
So it's an equilibrium.
So if there is a rescission a fear of recession, then companies
that invest in more transportation or require more energy, they
will also start spending more.
So again, that's a balancing effect.
So ultimately what it is it's a mixed bag of what impact what kind
of impacts happen in the market based on reduction in interest rates.
That's why interest rate cuts don't just affect Wall Street.
They ripple across everything, which is housing, tech, export
dollar dollar prices, oil, you name it, and it gets affected.
Speaker 2: Hi friends, this is Vinny Chopra from here in Danville,
California, and you might be saying, Hey, Vinny, what are these over here?
You know, I wrote this book a few years back, Apartment Syndication
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I came from India with 7 in my pocket.
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Actually, you will see that happening two billion in this book.
Also, the other book I wrote, which has been a very big
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Always, always.
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And the beauty is to be positive.
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Became big, big seller.
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In Kindle, in audio, also the Spanish version of this.
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So let's crush it, guys.
I know you can be successful.
I know you can do the kind of things that you want to do in life and have
the streams of income and know how to really, you know, educate yourself so
that you could become a strong, strong force in this world in real estate.
I know you can.
So take that step.
Don't just be on the sideline.
Take charge of your life.
Take charge of your education.
Amit: Okay, here's another reason why.
If you notice right now, the stock market may have been impacted,
and this is called seasonality.
So what I have in front of me is the performance of s and p 500.
This is a seasonal pattern on s and p 500, and it's a 20 year timeframe.
Ending in 2024.
So that means it start 2004 to 2024.
These are averages of what happened in the stock market, and if you notice
so far the stock market kind of has performed very nicely based on this.
So the market was down in January, slightly picked up
and then went right down.
So we are somewhere in the middle of March.
We're somewhere here.
You remember from the early to now.
First it went down, the stock market went down.
Then it picked up.
So we are sitting somewhere around here, and that's behaved very
similar to seasonal patterns.
And again, these are averages.
This is not a guarantee.
That's why I'm saying these are
Vinney: Seasonality
Amit: patterns.
If the seasonality were to play, expectation would be that the stock market
would go up until, wow, sometime in May.
Then it would go sideways.
Then in towards the end of June, it'll go up again, then again goes
sideways and then it goes up again.
We'll have to wait and watch to see what happens right now is March.
So far it's played out well.
Whether it's gonna play out well, we have no clue.
But I'm just saying this could be another reason why we think the market may not
have may have attacked at this time.
Wow.
Vinney: So it's 20 year averages range.
It's predicting it, it's predict probability.
Amit: It's,
Vinney: is that
Amit: right?
Historical performance.
Ah, historical, yeah.
Yeah.
So if the history were to play out again, then the chances are the market would
pick up, but looks very rosy that in the long run the stock market does go up.
So s and p 500 historically s and p 500 has given an approximate
10% compounded annual growth rate.
Yes.
Okay.
This is an average.
This means sometimes the s and p 500 and some years goes
down in negative territory.
Sometimes it goes up in the positive territory.
Last year it was north of 20%.
The year before it was north of 40%.
This year we don't know what it's gonna be.
Vinney: Yeah.
Amit: But we know that if we were to play this game over and over again,
and if the history, the market behaves something similar to what, how they
have historically, then the chances are over the longer and we'll get 10%.
Nasdaq NASDAQ gives 14%, roughly CAGR.
Okay.
So again this is good to know.
I'm not saying people should make their investment decision based
on that, but I am going in the, my discussion today with you is try to
analyze why the market may have dipped.
I've already given some reasons, which is tariffs, did the
stock market know historically that tariffs are gonna happen?
No, but that I'm saying that could be one reason, seasonality
could be another reason.
And what else could be another reason?
Here it is.
The other reason could be the job market, right?
Because there has been another there have been some pullbacks recently.
So what happened is that earlier this year we saw a spike in unemployment
claims, and they raised from 22,000.
Two, 242,000, and this is the highest in three months, right?
22,000 to 242,000.
And that triggered fears that the businesses were starting to
cut back, and that also added to the growing recession concerns.
But here's the good news.
Since then, the unemployment claims have actually stabilized.
We're not seeing a surge in job losses across the entire
country, at least not yet.
So now let's look at where the layoffs were actually happening.
So the tech sector was the one that was hit the hardest since January over.
30,000 workers were laid off from over a hundred tech companies, and this includes
big names like Meta, Google, Salesforce.
And one of the reasons aren't necessarily signs of economic
collapse, they were being framed as a part of restructuring cost cutting
AI automation efforts, et cetera.
Yes.
They impact the sentiment, but they don't tell the whole story.
Even outside of the tech.
Even outside of the tech, we've seen some cut, cut some some cuts.
So this would be like hp for example.
They recently had a layoff of 2000 workers.
They were blaming them on tariff related costs and supply chain shifts.
But again, these aren't broad-based layoffs.
That can, that are impacting the economy at this time.
So what does all this mean?
This basically means that so far the labor market is still resilient.
But it's critical data point to watch.
I. Okay.
If the job loss claims continue to raise to, to rise again, and if
layoffs start spreading beyond the tech sector, into consumer services,
retail manufacturing, then those could be signs of early weakness.
And the feds are gonna come in to start doing something like rate cuts.
But for now, the message is the job.
The market isn't in a panic mode, but it's watching the job data very closely.
And who's it?
The market along with the feds are watching this.
So Viji, this is the performance of the s and p 500 in one year.
Vinney: Yes.
Amit: Sorry, not one year.
This is the performance of s and p 500 in the last one month, and I
took the screenshot just yesterday.
So it shows.
Again, the top 500 companies by their market cap, who are
in the s and p 500 index.
How were they performing?
Have a look.
You notice this whole graph is sanctioned or categorized based on different sectors.
So first is the technology sector.
Then we have consumer cyclical, consumer defensive, financial
services, communication services, so on and so forth.
So you notice, and the size in these, the block size that we have, this is
based on what share that a certain company has in the s and p 500.
So notice some of the big guys.
So Apple has a huge share.
I'm gonna change the color.
I.
So you notice Apple has a huge share.
Microsoft has a huge share.
Nvidia has a huge share.
Berkshire Hathaway, so on, so forth.
So in one month, Microsoft, as of yesterday, I. Had a negative
performance, so minus 7.34%.
Apple had a minus 12.39% performance, Amazon minus 12.15, Google minus 11.44.
There were also some positive ones like Berkshire Hathaway was
up by 8.52% and so on so forth.
Johnson and Johnson, ance.
So that downturn that we saw from from January till now,
which is a downturn, right?
So even though it started to stabilize, but if I look at a month long performance,
this is what the market is showing we're gonna have to wait and watch what happens.
I. People who want to invest in the index, they can do technical analysis.
If you watch, I just did a webinar a couple days ago on how to do technical
analysis so you can do technical analysis to start to get a better understanding
of how the market is behaving.
So people can learn how to take advantage of indexes or learn to calculate the
fair market value of stocks, and then figure out what's the fair market
value and what would be the right entry points based on technical analysis.
But once you know all that.
That
Vinney: was wonderful webinar, by the way.
I wanna just put a plug on that one.
It's on your channel on YouTube also.
Yes.
I would highly recommend everybody to watch that because it blew away.
The MACDs and all these, things a lot of people think that they cannot understand,
but how you, teach, and how you are able to give this free knowledge is amazing.
And it was wonderful.
People had so many great comments.
And I did too.
Thank you.
No, it was
Amit: very well attended a live webinar, which gave people an opportunity to yes.
Ask questions.
But where I'm trying to get at is, yes, that webinar is available recorded,
but what I'm getting at is that.
Market is down right now.
The contrarian thinking shows that be greedy when the market is fearful, right?
Yes, very fearful.
But the smart investors are coming in and purchasing, but you don't
just start investing in any stock that you can, somebody tells you,
remember, cheap junk is just junk.
Junk.
Vinney: Yeah.
Amit: So when the markets go down, poor performing companies actually do really
poorly or they lose, they run out of business or they go out of business.
So you gotta know the d, the how to use the concepts of diversification.
Dollar cost averaging, being able to calculate the fair market value
of a stock, do technical analysis.
When you combine all that knowledge, then yeah, there are people who are able
to take advantage wisely and in time.
Recognizing that the market goes up by 10% there will be many wise
investors who are gonna make money.
There is a saying in the world of investments that the money in the
markets flows from the pockets of eager and uninformed investors to the pockets
of educated and patient investors.
So true.
So very true.
You can't make, people like I wanna become rich tomorrow.
I don't know if you can rich, get rich tomorrow, but I know for sure that
you can lose all your money tomorrow.
Vinney: Yeah, so true.
Totally.
So patience
Amit: and knowledge is the game.
Vinney: Yeah.
Amit: And like I'm an engineer, if I can figure this out, other
people can figure this out.
Vinney: Okay
Amit: sir. Now here's a slide.
That I have, which shows that throughout history, the world has experienced crisis.
We're going through a crisis right now.
What is a crisis?
There are a few crisis.
Ukraine War.
There are problems in Asia, right?
Israel, middle East, Bangladesh there are bombings happening in Balo.
Stan, there are problems all over the world.
Ukraine is under war right now.
Trump is putting tariffs, but the question is.
Is it the first crisis the market in the world has seen?
The answer is no.
Here I have created this chart and I've put bubbles.
This is all I make this myself.
So I put bubbles on the s and p 500 where different kind of crisis had happened.
I. And have a look.
There's so many different crisis.
There was Iraq War, Syrian War Ukraine and Crimea war, US trade war with China.
Then there was a oil collapse, Brexit.
It goes on and on.
But look at the performance of the s and p 500, which is this candlestick chart.
Notice that, it's had a very nice, almost exponential trajectory.
Not a linear curve.
It's an exponential curve.
Vinney: Yeah, it is.
Amit: So what do we learn from the crisis for the informed investor?
Crisis opportunities.
For uninformed investor, this is the time where they start selling their
stocks and getting rid of portfolios.
And when they do that.
They're unable to take advantage of the hikes because what happens is
when somebody just, let's say this is the performance of certain stock,
and they suddenly, let's say, because of panic, they sell their stock here
at this point, and then some point in time it goes up and they're in
denial that the market is going up.
And they've lost.
If they had, sold the stock at, let's say $30 and it's at $35,
they'd be like, oh, I'll wait for the stock to come back to $30.
And you know what?
It may never come back and you lose out on all that growth that
happens over and over again.
Why?
That's why I say the money moves from the pockets of informed, sorry.
Money moves from the pockets of uninformed to the informed
investors, and that's my aim.
I'm trying to.
Just give a little off the knowledge that I can share because there's again,
for everybody there is, there's so many resources online, go ahead and
learn and yeah, it'll do wonders to your portfolio and to your wealth.
So true.
This time there was an almost 10% dip.
The s and p 500 touched the 10% and went right back up.
So what does all that mean?
So here's.
Here's some statistics.
Here's a chart, a table that shows that how frequently do we have a 5%
dip, 10% dip, 15% dip, and 20% dip.
So it gives you some kind of an idea because people may be like, oh my
goodness, the world is coming to an end.
No, the world is not coming to an end.
And this has happened many times before.
So lemme show you some statistics.
So when a market dips by 5% and by market here, this is typically s and p 500.
But you can assign that to Nasdaq as well.
So you can say s and p 500 had a 5% dip, or NASDAQ had a 5% dip.
But what does a 5% dip mean?
It means a pullback.
And how frequently do pullbacks happen?
Pullbacks happen roughly three times a year.
Vinney: Three times a year.
Three times
Amit: a year.
So if suddenly a 5% dip happens, don't panic.
It happens three times a year.
On average, it lasts for 43 days.
And last it happened was just now, then a 10% dip is called a correction.
Correction just happened.
So first it was a 5% dip, then it went to a 10% dip, and the
market went up after that.
So it's slightly above that right now around, let's say 8%
dip or so, since all time highs.
How frequently does that happen?
That happens one times a year.
It's already happened.
It just happened.
Now how long does it last for?
Average length is 110 days.
Is it gonna last for 110 days?
This time we don't know, but it's happened right now.
Previously it happened was in October, 2023, and then it happened in March, 2025.
We'll wait on what's happened.
Wait and see whether it goes further down or not.
But again, it's a point to show that there not, that this is not new.
Now then comes a 15% dip and a 15% dip is called a deep correction.
It happens one to three, one time a year.
Sorry.
It happens approximately one time every three years.
Three years.
One time every three years.
Last four, roughly 251 days.
And previously, when did it happen?
Between June and October and 2022?
It happened.
So once every three years.
Then there's something called the bear Market.
20% drop.
20% drop is a bear market.
It happens one time every six years.
Okay, these are historical.
I'm not saying like it absolutely happened really like that.
Yeah.
But the average historical that this is what the calculations have been done.
So happens approximately once every six years, lasts for three
70 days, and the previous time it happened was Jan and October, 2022.
So
based on history.
The recent dip that has happened, which is a correction, it just
touched 10%, it went right back up.
This is a normal correction.
It's not a bear market at this time.
Bear market is significant.
Dip.
When you watch my analysis on my video and technical analysis, I show
through indicators and the performance and behavior of the market compared
to, let's say the 200 moving day, 200 day simple moving average.
Yes.
What those really mean.
At this time, we're not in any of those territories.
These are really opportunities to deploy cash.
I personally have had an opportunity to nibble on some of the stocks that I was
watching to acquire them in my portfolio.
I still have a lot cap, a lot of cash setting because I don't like to
deploy all my capital in one time.
Otherwise I run outta bullets.
So this is called dollar cost averaging.
And again, these are certain things that you, people will learn as they start.
Following the knowledge that I share and take the course,
the free course that I have.
All right folks.
So based on those declines that I just mentioned, here is a chart that I have.
So this is current.
So market is currently sitting somewhere close to, like I think it's
about 8% dip since all time high.
I don't remember the exact number, so you can just calculate that.
But when I took the snapshot, I think a week ago, it was sitting at 6.8% now.
There was a 9.7% decline that happened a little before.
So these dips just continue to happen.
Here, 27% decline that happened.
Why did it happen?
Because there were inflationary inflation had gone up, remember it skyrocketed.
And then feds had to go in and increase interest rates.
So not that they had not never raised those interest rates.
They just raised the interest rates at their fastest pace in history,
which is what brought the stock market down and start to cool the inflation.
And now the inflation is sitting, little above 2% or somewhere between two and 3%.
And the feds want to bring it to 2%.
So the measures that they had taken are working.
Then during Covid, the market had hit bear market territory.
Now, not for too long, right?
It went down, it went right back up.
So at this time when I was watching using the A, the simple moving averages,
I was able to identify somewhere here the market had gone to bear territory.
So based on my knowledge, I was able to acquire stocks of a lot
of great quality companies here.
And then I've.
Been very fortunate to take advantage of the growth.
But again, these kinds of opportunities come, but you have to know how to deploy
your cash in the stock market because in the long run, the market always goes up,
Vinney: so true.
Okay.
Fabulous information.
Oh my gosh, this is so great.
Amit, for you to come on my show and really give so much knowledge and I
know we'll be doing it a lot more, and also promoting you in my channels
because it's the informed investor can really make, grow their money.
Safely.
Absolutely.
That's the word.
Absolutely.
Amit: And like people take advantage of diversification and yeah.
If you look at some of the most wealthiest people, what do they do?
They have diversification.
They have some money in real estate.
So true.
Some money in bonds, some money in stocks, some money in some business.
So that when the market starts to take a dip.
Some things go down, others go up.
So it's actually the diversification in that case that I'm talking about yes.
Is not necessarily only for growth, it's also for risk hedging.
Yes.
To manage volatility.
Volatility.
What is volatility is the sudden ups and downs of spikes.
Yeah.
It's to manage that volatility.
So to all your viewers, I thank you.
Now I have a free course available where I put a lot of energy.
To in, to genuinely share in useful information.
Which is foundational.
And I in my experience, lot of experienced investors don't even
have this foundational knowledge.
I begin the course with explaining what are equity markets and debt markets,
and then I go into explaining, where, how do equities work, how do debts work?
Where can people what can people do to diversify how they can take
advantage of freely available?
Investment vehicles like ETF exchange traded funds where there are very smart
people who are already managing them.
I discuss all kinds of interesting items there.
There I also go into economics, which I just use as a foundation
to, to deliver this lecture today.
But my website is www.informedandinvested.com free course.
Free Telegram community.
Join me and, I get encouragement by when people join and we communicate.
So awesome.
And you were also part of my community, so thank you for that.
Vinney: Oh, no, thank you.
Thank you so much, Amit, you, this has been a tremendous, I hope everybody
who has watched it, please share this episode with your loved ones, with
your family, with your colleagues, and.
Give five star reviews because our podcast came in 1.5% in the top, and
also I, my real estate podcast came at number 11 out of top 50 apartment
syndication, apartment investing in USA.
I'm very pleased about all the contents that my team is putting together.
My guests bring all that.
So thank you so much for your time.
Amichi.
I really appreciate that.
Thank you.
You're doing such a fantastic
Amit: job.
Keep spreading
Vinney: the light.
Amit: Thank
Vinney: you.
Thank you.
We should spread the knowledge because there is one place in every city,
in every town where there is so much knowledge that's buried under the ground.
And that's the cemetery.
That's the cemetery.
Oh my goodness.
In every village, in every town, in every part of the world.
And we need to really be.
Giving our knowledge out living the legacy.
Because so many great ideas die.
When we die.
So many great opportunities die and let's just make this world a brighter place.
And we have that.
I think it's, God has given us the strength to really impart of our knowledge
and I respect everybody who does that.
And please, if you'd like to be on my show on my four shows that
I do, please reach out to Vinney Chopra team and we, look into it.
Amit, thank you so much for your time and we'll do it again.
Thank you so much.
Have a good day.
Bye-bye