 Good day, fellow investors. Welcome to the stock market news with a long-term fundamental twist. And today, we're going to answer the question whether there is a stock market crash coming. Is there a stock market crash ahead of us? And what should we do about it? Last week's decline, it was a 5% decline at the moment, put a lot of fear with many investors. You had a lot of headlines, how the Dow is down so many points, etc. about what might be ahead of us. Is there a crash, a recession, a downturn or things might look different? Let's see my stock market predictions for the next year and also decade. There are many YouTube channels that make their living by predicting doom and gloom. In the meantime, the S&P 500 continues to go up. It is up 50% over the last five years. That's an excellent return. The key is that the situation five years ago wasn't much different than now, when it comes to valuations, debt levels, irrational markets, etc. Actually, interest rates were much lower five years ago, federal funds rate. And despite the higher interest rates that should push stocks lower, stocks kept marching higher. So higher interest rates, similar higher debt levels all seems to be in the negative, but things go well. We have lower taxes. And if we look at the Fed's projections ahead, we see that those are still very, very good and very, very strong. 1.9% real GDP growth expected over the long term for the United States 2.1 for 2019, 2% for 2020, inflation at 2% longer run, also 2% unemployment rate, still very, very low, a little bit higher over the longer run, but all excellent numbers. So we might not even have a recession over the next three, five years. The key is that nobody can predict recessions. If you listen to Buffett, he says he does whatever he does, not trying to time the market or predict recessions, but just look at valuations. Guys that try to predict recessions like Ray Dalio miss all the time. A few years ago, Ray Dalio was saying strongly how there is a 70% chance for a US recession by 2020. Well, it didn't happen. So he wasn't wrong. There was always the 30% chance. His thought process was correct, but it didn't happen. So now he says diversify with gold as a hedge to what might happen in the next three, five, 10 years, 10 years. It will probably happen in 10 years, but might not happen next year. So therefore, it is very, very interesting how those predictions usually fail. And when it comes to predictions, all of them fail. The key is that we have to be ready as investor for whatever can happen. Let's see about the chances of a crash over the next year. So when it comes to forecasting, usually what people do is look at what happened last times and then estimate that it will happen again. 2000s, SAP 500 down 49%, 2008-9 down 52%. And many expect another similar crash and then another boom like we have seen back then. However, the key is that already police station central bankers and others have declared that they will do whatever it takes to preserve the relative economies and avoid painful 2009 like recessions. This means that there will be a big chance that we don't see decline similar to 2002 or 2009 anymore as there will be intervention. Just look at the ECB. There is constant intervention. European central bank is holding rates close to zero. It continues to do that. So they are simply still stimulating the economy. It might not go into a recession and if it gets close to a recession, they will stimulate even more. The Bank of Japan just continues to put money into the system but by buying ETFs, bonds and whatever. Look at the balance sheet of the Bank of Japan. It just keeps getting bigger and bigger. So when it comes to practical investing, it is likely that there might be a quick dip of 20-30% like we have seen in December 2018, but a big crash of 50% and then stocks staying there, it's unlikely because everybody will intervene to keep financial assets high because financial assets, unfortunately, are the backbone of the global economy. More money, more money printing, it's a financial engineering environment. So that's how it is. It might be crazy, it might be stupid, it might be irrational, but that's how it is and we have to deal with it as investors. We have to approach it and try to take advantage of it. One of my predictions for the stock market returns over the next decade is that I agree those will probably be at zero, but the key here is to understand the importance and the difference between real returns and nominal returns. If the SAP 500 goes to 5,000 points in 2030, 5,000 points, that would be just a 5.2% yearly return. If inflation is 5.2%, then the real returns is 0%. Now, you would say, Sven, inflation of 5% is too high. Well, we have seen decades with much higher inflation just 40-40 years ago. So that's one. Secondly, the key is what are you buying with those financial assets? Most people buy a home. So if home prices go up 5% over the next 10 years, then if your stocks go up 5%, you didn't do much. So that's something to keep in mind when it comes to real and nominal returns. So the SAP 500 might be at 5,000 points over the next 10 years. Recession includes depression, stock inflation, whatever, and most investors would not be happy about it. There is always a chance for the crash. It's so tempting. Okay, stocks are going to crash 50%. I'm going to buy. A, you are unlikely to buy in because you didn't buy a few months ago. You didn't buy a few years ago. So then with all the negative sentiment that pushes stocks down 50%, few are going to buy because everybody is selling. So it's a very tricky game to play on mentality to time the market. You have to look at fundamentals. What is the business return when those stock crash long term, with intervention, without intervention, with more money printing, and then find a balance at how much you are invested. On Sunday, we'll discuss why Buffett has 122 billion in cash and how he's balancing his risk reward portfolio, his patience. So please subscribe to this channel, click that notification bell so that you get a notification whenever a new video is coming out. Because I really think that these videos over the long term will provide you the key thing when it comes to reaching long term investing returns that drive you to reach your financial goals. What is definitely there over the next 10 years is volatility. The last 10 years have been simply too stable. Unfortunately, over the last year, 2018, December, the crash of the last quarter of 2018, we have seen some volatility. But I would expect volatility in the coming years because valuations are very, very stretched and high. And it is hard to justify higher stock prices based on valuation. If we look at the cyclically adjusted price earnings ratio that takes into account 10 year average earnings, so it's adjusts for cycles. Okay, 2009 will soon come out of there. But still, it is a good measure. You can see that long term valuations go up and down. The best time to buy is when the valuations, the cyclical, the K-Pratio, the Schiller ratio is low and not high. You see that in history, there have been periods with high K-Pratios then were followed by declines. It depends here whether those decline will be real or nominal. But given that valuations are already high, you can expect volatility and then intervention, which is something likely. If there is a crash, I'm also ready. If the stocks fall 50, 60, 70% will be redeploying the dividends, will be deploying the cash. So one very important thing here is that one is just the SAP 500. And another thing is to talk about investing opportunities. The SAP 500 has been stable over the past decade. But if you just look at China, it has been a roller coaster ride. So there are plenty of other investing opportunities. We are looking into them. There are stocks that are down 80% at this moment. So you have plenty of crashes if you want to buy. The key is to look at fundamentals. You will be able to buy individual stocks because those are even more volatile than the SAP 500. So if you find businesses that you like, the returns that you like, you can wait for them to come to hit the sweet spot, your required return for the relative risk. Just look at Apple, which is one of the biggest companies in the world, largest market capitalization. Just look at how volatile it was over the past year. It has been down 42%, up 40%, down 20 something percent, up 28%. And now it's going down again. It's crazy that such a big company can have such fluctuations in stock prices. So you just have to sit down, wait and take advantage, especially of the individual situations. The stock market has its own movement when we look at the SAP 500. But individually, you can create amazing portfolios by taking advantage of the market's volatility on individual stocks. So to conclude, a crash might be always around the corner. You never know, you can't predict it, it can happen, it can't happen. The key is that you have to be ready. You have to have always some cash and we'll discuss that more in Sunday's videos with Buffett. And then you have to take advantage of the volatility. You have to look at fundamentals because timing the market, it's practically impossible. Those that have tried over the last 10 years have really, really missed out. So when it comes to investing, focus on the fundamentals, have some cash, take advantage of the opportunities that are always there because the market and especially individual stocks are always volatile. Will there be a market crash or not? I don't know, I'm ready. That's it, and you should be ready too.