Why Graham Stephan Says You Should 'Never Bet Against Stocks'

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  • Investing in stocks has been proven to be the best way to build wealth over time.
  • Graham Stephan says to never bet against stocks.
  • Stephan provided a chart showing that stocks have provided a better ROI than other investments.

Should you listen to Graham Stephan and invest in stocks?

The stock market has been very volatile in recent months and is down considerably from last year. In fact, we're officially considered to be in a bear market because stocks are down 20% compared with recent record highs.

But while you may be concerned about the performance of your portfolio this year, you should heed the wise words of Graham Stephan who warned on Twitter that you should, "Never bet against stocks long-term!"

Here's why Graham Stephan believes you shouldn't bet against stocks

Stephan is a well-known YouTube personality who is famous for investing in real estate and other wealth-building assets. On Aug. 4, 2022, Stephan tweeted out his comment about never betting on stocks.

Accompanying his comment was a chart that provided a very clear explanation of why he believes you should be putting your money into the stock market. The chart showed the real returns of different financial indexes from January 1802 to December 2013. As the chart showed, stocks had the highest real return over any asset -- and it was not even close. A real return is the return on investment after taking taxes and inflation into account.

Stephan's chart showed that stocks had returned 6.7%, while bonds had a real return of 3.5%, Treasury bills had a real return of 2.7% and gold had a real return of 0.6%. The U.S. dollar performed the worst with a real return of 1.4%.

While Stephan's chart stated that past performance isn't predictive of what will happen in the future, the reality is that $1 invested in the stock market in 1802 would have turned into a whopping $930,550 by 2011.

And there is every reason to believe the stock market will continue to provide the highest real returns of any asset you could put your money into -- especially given the performance of stocks relative to other asset classes over more than a century.

How to listen to Stephan and start investing in stocks

If you want to listen to Stephan and bet on stocks as a way to help you build wealth, you're going to need a brokerage account to start investing. You should research the available accounts out there as there are many that charge no commissions to buy stocks and that allow you to get started investing with very little money upfront. This will give you more flexibility to start slowly with investing until you are confident.

Once you've opened your brokerage account, you will need to decide if you want to purchase shares of individual companies or if you want to choose an easier approach such as exchange-traded funds that track stock market indexes like the S&P 500. If you have the time and knowledge, you may be able to earn even better returns by investing in individual companies. But if you just want to mimic the performance of the "market," choosing an S&P 500 index fund that gives you exposure to around 500 of the largest U.S. businesses is likely the way to go.

Whatever approach you take, the best way to build wealth and enjoy the types of consistent positive returns Stephan has talked about is to buy and hold your assets over the long term. If you do that, and you've picked solid investments, you should end up much wealthier over time if you bet on stocks as Stephan urges you to do.

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