 Good day, fellow investors. Now I have received a lot of comments that I'm a buy-and-hold long-term investor. In this video, I want to clarify what is buy-and-hold long-term investing and how I'm definitely not a buy-and-hold long-term investor and how I wouldn't even advise anybody now to be a buy-and-hold long-term investor. Buy-and-hold investing implies that you buy something, buy stocks, because stocks over the last 90 years have been the best investment vehicle, better than real estate, better than bonds, better than cash, better than gold, and put your money there, forget about that money, wake up after 40-40 years, extremely rich. Now, those who did that in 1982 did well. However, don't expect the same thing that happened in the past that makes the strategy so popular now that it will replicate itself in the future. So that's very dangerous. My first concern with buy-and-hold or buy-and-forget for the long-term investment strategy is that it doesn't consider risks. And for me, investing is all about risks, all about risk management in relation to your financial goals and to what's going on in the market. So it's risk versus reward and where can I find the best balance for my portfolio? Risk-reward. Long-term buy-and-hold means, okay, this is my reward, there are no risks, because in the long-term stocks will always end up positive. Hmm, I wouldn't bet that. Usually when you see a long-term stock chart, it goes only up. However, look at this stock chart from 1851 till 1931. Over 80 years stocks have lost 25%. Yes, you heard me right. Over 80 years, the deflated return for stocks has been negative. Of course, dividends have been higher there and those have been the main contributor to stock returns, which is good. However, if you look at the dividend rate now, it is at historical lows, so it is 1.85%. So if there are any buy-and-hold investors who think, okay, I'll put my money in stocks now, I get a dividend of 1.85%. There is a high probability that after 30 years, the only return you would be getting is the dividend yield. And there is a high probability that your investment capital will be lower 30 years from now than it is now, because especially if you deduct inflation, dividend yield is 1.82%, inflation is 1.82%. So you are losing money just from the dividend. It's not enough. In the long-term, the price earnings ratio of the SAP 500 is 25, so you can expect 4% return from stocks. However, what's the long-term? When somebody says I am a long-term buy-and-hold investor, to really get to the 4%, you have to wait 40 years. And very few of us have a 40-year investment horizon or a 40-year investment target. Very, very few. So you have to really be careful if you're applying a long-term buy-and-hold strategy to the risks and to your financial goals. Are they really 40 years from now or are they a little bit shorter? Big difference, big difference into what is your strategy and how you should approach your portfolio. As I said, the biggest risk now from stocks is the price earnings ratio. It is at 25, which is much higher than the historical average and implies a return of 4%. There is always the probability of a stock market crash that would have a very negative impact on such portfolios that are invested in stocks, buy-and-hold for the long-term. So that's my main worry. No assessment of risk in such a strategy. So on one side, we have a very, very long-term return of 4%. On the other side, we have the probability that the investment will be half of what it is 10 years from now, 15, 20 years from now, or when you deflate it, when you deduct inflation from it, that if you invest 100,000 in the SAP 500 now, that the real value of it will be 75 or 50, 20 years from now. That's a really, really great possibility. So we have 50% potential loss for a potential 4% return. The risk is too big for the reward, for long-term buy-and-hold investors. So that's my message to long-term buy-and-hold investors. On top of everything, people think that buy-and-hold is a static investment strategy, not if you buy the SAP 500. If you buy the SAP 500, you are constantly trading according to how market capitalizations change. 10 years ago, Exxon, Microsoft, Google and Johnson's were part of the SAP 500 top 10. And those are the only companies that are still part of the SAP 500 top 10. General Electric that was second is now far, far below. So you buy something like that, you hold General Electric, you think you're doing good, but then you see it drop a lot. And you buy, so you practically buy high and sell low when you buy an index funds for the long-term. On top of everything, the world is changing at an extreme speed, disruptive inventions everywhere. So I would be very, very careful of investing buy-and-hold. How to invest buy-and-hold, if you find something that's low risk, high return, and you enjoy the return from it for the long-term, 20, 30, 40 years, then I would do a buy-and-hold strategy. But always please look first at the risk, and then compare it to the reward. That's essential. If you look at the most famous of buy-and-hold investors, Warren Buffett, we can see that he's not that of a buy-and-hold investor. He's, again, first look at risks, what is the reward in comparison to the risks, and then make investment decisions. The investments he held forever were bought at extremely low prices, and then it didn't pay to sell those investments to replace them with new investments, think American Express, think Coca-Cola. However, investments that he is able to dispose of when the risk-reward ratio is not more attractive are, for example, a few months ago, he sold the whole general electric position, even if there are people who are still waiting that general electric will rebound and so on. However, the biggest buy-and-hold investor sold general electric a while ago, and he's also trimming his IBM position. So be very careful when Warren Buffett says buy-and-hold is the best way, because he certainly doesn't follow it blindly. Thank you for watching, looking forward to your comments, and I'll see you in the next video.