 Good day, fellow investors. We are entering 2018 and I want to discuss stock market volatility, the VIX index and your investment behavior. The SAP 500 has gone up 20% in the last year without even minor corrections. This means that everybody is complacent, everybody looks at stocks, stocks will continue to go up and up, nothing bad can happen. There is practically no risk because the volatility is low. However, I want to give you some food for thought by saying that you have to have a strategy, a plan of what you will do if volatility increases because volatility can always increase extremely fast and in the past if we look at the chart, volatility has always jumped up extremely fast. We can see here in the long-term chart from 2007-2009 we had really spike in volatility, 2012 another huge spike, end of 2015 huge spike, it goes extremely, extremely fast. In the past also, gradual increases in volatility have been very, very rare. However, gradual declines in volatility are very, very common. You can see that volatility slowly, slowly usually declines because investors become complacent. But as risks come without a warning, volatility really spikes up in no time. So my message is that you have to have a strategy, what will you do when volatility happens? Because usually higher volatility leads to negative returns. If we look at this chart that shows how a change in volatility affects SAP 500 returns, you can see that lower volatility leads to higher SAP 500 returns. What you have been joined in 2017 with the SAP 500 20% higher. However, higher changes in volatility, growth in volatility really leads to negative returns for the SAP 500. This means that the SAP 500 will be negative. And then depending on where the shock will come from, if it is emerging markets, if it is commodities, if it is oil or who knows what, you will see higher volatility in those sectors. So you have to really see what sectors you are exposed to and how are you going to tackle that volatility in that sector. Emerging markets, all those sectors that are perceived as riskier from the stock market will have even higher volatility than the SAP 500, even if their businesses and the fundamentals are much more stable than the SAP 500. Nevertheless, you have to see how are you going to tackle a potential increase in SAP 500 or global financial market volatility. My preparation is I have a lot of cash. I'm now at 40% of my portfolio in cash. Everything that I own is pretty much uncorrelated to what the market does. Therefore, I severely underperformed the SAP 500 in 2017. But that's the strategy I have accepted all along. I hope really as I did in the past to really outperform the market in the long term. Nevertheless, I have cash. I have uncorrelated assets, and I plan to invest really, really when I only find a bargain, which means that I look forward to volatility to give me bargains. If not, I'm happy to underperform the SAP 500 for another year, two years, three years, as long as it takes. I'm looking forward to your comments, to your preparation on potential higher volatility, or even how to take advantage of that. Thank you for watching. Click like, subscribe if you haven't to the channel. It would mean a lot for channel support and to motivate me to do even better videos. I'll see you in the next video.