You Won't Believe What Happens Next in the Stock Market

So the stock markets are crashing, they are rattled. Tech stocks are crashing, they are falling. Well, at least that's what all financial news media say. And everyone is pointing their fingers at Trump's new tariffs, blaming them for the global instability. Well, they play the role, but let's be honest, stock valuations were already quite stretched. So this might just be the pin that popped the bubble I've been talking about for a while and now some people are asking, especially doctors and dentists, is this a buying opportunity? Should I be jumping in? Well, before you jump in and break a leg, let's break it down. Take Meta, the company behind Facebook and Instagram. Back in 2022 when many investors were dumping it due to some issues. I bought it at $152 because their numbers looked great. Fantastic free cash flow, almost zero debt, lots of potential for growth and great management. But then I couldn't buy enough of it because the numbers and valuations screamed it was undervalued. So I was very excited. Investors only dumped it out of fear. Well, it didn't take long to recover and hit an all time high of $736 in February. Recently, two days ago it dipped to a low of $498 from an all time high of $736. So is it cheap now? Should we be buying more? Not necessarily. Of course I know there has been some change in company earnings and all that, but here is an example that is more closer. If a 500, 000 pounds house drops to 400000 pounds, is it a bargain? You might think, oh great, that's fantastic. But what if other houses in the area, similar houses are selling for half the price or you're not getting good rent or it's not a great area to live in. So a price drop does not always mean a bargain. It's the same with stocks. You've got to check the fundamentals, check the numbers. And this is where the Buffett indicator comes in, is named after Warren Buffett, one of the greatest investors of all times. And yes, I'm a big fan and I've made the pilgrimage to Omaha for his annual shareholders meeting. Buffett indicator compares the total stock market value to the US economy. That's using the GDP above 100%, subjective evaluation. And right now we are well above that. So before you buy the deep, ask is it actually undervalued? Is it a deep. So if any of this sounds a bit complicated to you, or you're a busy professional like a doctor, dentist or pharmacist, you probably don't have time to analyze. That's why passive investing may still work better for you. In fact, going by past data, if you just bought average market indexes as a passive investor, you're going to outperform 99% of professional manager. So you can just stick to your plan to dollar cost average or pound cost average. Basically, you take a fixed amount, invest it in the market. If the markets go high, you buy a bit more or less, and if the markets go low, you buy a bit more. So obviously this is not professional financial advice. I'm Dr. Andy Gwim. I'm an investor for the past 20 plus years and the founder of moneywise.com which has helped up to 10,000 doctors and healthcare professionals make smart financial decisions. Now, before you start investing, there are seven steps I suggest you do first and one of them is obviously having your emergency fund. The second one is learning how to invest. Obviously financial education. Another thing like financial protection. There are seven of those steps. If you want to get those seven steps, I'm going to share them with you totally for free. The checklist comment seven steps right below this video and I'll send them to you for free. All right then. Stay calm, stay money wise and don't do anything rush. Cheers. Bye bye.