 Good day fellow investors. My name is Sven Karlin and today I'm going to share something with you that no financial advisor, investment banker or whomever sells you stocks, index funds or ETFs is allowed to tell you. And I'm going to do that by using the same data they are using when they are selling your investment products. Currently everybody is telling everybody invest in index funds, invest in the stock market, invest in ETFs. The stock market has returned 8% to 10% in history. And that's it. And based on that, people see, okay, the stock market returns 8% to 10%, that's the best return I can get. Let's invest and everybody invests like crazy. However, if we take a look at historical inflation adjusted returns from the SAP 500, from 1881 till now, the picture looks completely different. Here I have marked three things with the red line. From 1905 till 1982, the stock market went exactly nowhere. yearly average returns on stocks were zero. So for 78 years returns were zero. From 1967 till somewhere 1997, so for 30 years, again, stock market returns adjusted for inflation were zero. From 2000 till 2012, 12 years stock market returns per year were zero. So in the last century, there have been periods of 78 years or 30 years and lately of 12 years. And there have been many those of 12 years, 10, 20 years, where stocks returned exactly zero per year. So the first thing you have to think about is, why are they telling me that stocks return 8% to 10% percent? They are telling you that because that's the only way how they can sell something to you. If I would sell something to you and tell you there is a chance your return in 78 years will be exactly zero and there is also a chance that in three years your portfolio will be 50% of what you invest. How much investment products would I sell? Exactly zero. So that's why you have to take what's in history, take what's the best for you as a seller and then sell it. And that's it. That's the rule of Wall Street. Never reject a sale. Sale, sale, sale. Because Wall Street leaves off commission fees. Whenever they sell you something, they get a commission. And if you own an index fund or whatever, they get a cut on your wealth, on your assets. They get a fixed percentage of on your wealth. They don't care if it goes up or down. They just care about that fixed percentage that they get from whatever happens. And you are happy to pay that. Now, yes, in the last 40 years stocks have averaged 10%. And yes, from 1928 stocks have averaged 6.87%, 8% depending how you measure it. However, there have been long periods of time where stocks have averaged zero. So the first thing you have to ask yourself is, how would my financial life, how would my well-being, how would my health, how would my quality of life look like if from today, in the next 40 years, stock returns would be zero. That's the first and most important question everybody should ask themselves now. Going back to the chart, if you look at the stock market like this from 1881, you can see that the bulk of stock market's returns happened from 1982 till now. In the last 45 years, the stock market went up 25 times. So how come that there have been long periods where the returns were zero and then in the last 45 years, stock market explodes? And most of the returns from the stock market that they put in those averaged 8%, 10% that they used to sell you something has come from the last 45 years. The reason behind the great performance of stocks are lower and lower interest rates. Here is a chart from the US Federal Reserve Bank and you can see in red 10 year treasury interest rates from the US government have been constantly declining since 1982. On the other side, I took housing prices here, house prices, asset prices, stock prices have been going only up. This is because if the riskless returns from government treasuries goes down, people look for other ways to increase their return and they look for more riskier assets like housing, real estate and stocks. If the treasury rate is 2% 10 years like it is now, you are happy with stocks giving you 4% and that's why the valuations of stocks and stock prices continue to go up, up and up. However, if ever the interest rate returns to higher levels, stocks will go down, down, down and down. Second question, how would your quality of life be if stocks fall 50, 70% in the next 3 years? Nobody asks you that, nobody cares, they care about the commission and the fee. Before going to how much the stock market can fall, let me show you average global returns from 1912 to 2014. You can see that the US returned 6.3%, not 10%, this is adjusted for inflation. And then if you look at Europe and other global markets, 6% is more an exception. Global portfolios returned almost 7%, but most of those countries didn't even have a stock market before the 1990s, so don't take that as a number. However, Italy 100 year return 1.7%, France 2.7%, Spain 3.2%, Belgium 3%. Germany just 3.3%, Netherlands a bit better 5.2%. So the 10% from the stock market that everybody uses comes from just one geographical market and that's the US, because only there we have 100 years of data and that's the best performing market. So keep that in mind, not every market, and it's not guaranteed that because the US market returned 10% over the last 45 years or increased 25 fold over the last 45 years, this means that the probability that it will do the same in the next 45 years is close to zero. Be aware of that when you invest, especially if you invest in index stock market funds. Now let me show you something else that I believe everybody who is invested in the stock market has to be aware of, but nobody is telling you. This is the worst that can happen from investing at the wrong time in history. One year returns on average have been 60% downside from investing in the last 100 years at the wrong time, at the worst time. Three year investments 70%, 80%, 90% down. 10 year returns worst case scenario for the US market 30% down. 20 year returns worst case and they say that in 20 years stock always give positive returns have been positive only in Canada, US and Australia. For the rest people have been waiting for more than 20 years to achieve positive returns. 30 years things get a little bit better, 40 years a little bit better, 50 year returns are positive, the most positive is Australia, US, Canada, but the other stock markets have not been that positive and you can see that the bulk of countries has seen 50 year negative returns. Be aware of that when you invest in stocks and think about how could this affect your financial health. So I have used the same data that everybody uses to sell stock market investments, to sell index funds ETFs and so on. I have just showed you something that nobody dares to show to investors because then you wouldn't make a sale and you would be fired. When that happens the only thing you can do is write books or start a youtube channel. Apart from the jokes the question is now what to do about this? What to do about this what I just shared? The first thing you have to ask yourself is how would my financial life be affected? There is no guarantee that stocks will return 5, 8, 10% in the next 40 years. The best estimate for the SAP 500 in the next 30 years is 4%. So that's the best estimate. The worst estimate they can be minus 50% as you have seen in the chart with the worst outcomes. So how would that affect your financial life? That's the first question. Secondly if you're not happy how would that affect your financial life you have to start taking responsibility for your finances. I am baffled by how many people spend 15 years of education and then hundreds of thousands on a university degree to get a job to work their assets off for 40 years and make a few millions in paycheck. And then they spend just a few minutes a year half an hour to drink a coffee with their investment banker to invest that money. And if you just take some time to learn about investing 15 half an hour a day this YouTube channel is a great way to start. If you just take that time then you can really take responsibility. Don't let yourself your financial life be taken advantage by those who are just interested in their fees at Wall Street and you can increase your returns and lower your risk. However you have to spend time on it. The same as you did when you went to school to learn how to do this current job you're doing now. Let me show you how important is that of a difference. If we invest 1000 per month in any kind of investment account IRA or something over 35 years at a return of 4% that's now expected from stocks you will have 900 000 which is not bad as the total investment is 420 000. So that's a positive return and everybody's happy with a positive return. But let me show you the opportunity cost. The opportunity cost. If you can invest at 10% over 35 years the same 1000 per month over 35 years amount to 3.4 million. So the difference between 4 and 10% is 2.4 million. Take responsibility for your life and don't let Wall Street cross you over for some miserable fees. So that was the message for today. Please share this with anybody who you know that owns stocks or something related. It's important that people know what they are going into it. Not everything will be like it was in the last 10 years or 35 years and it's important to see how your life fits into the picture of stocks risk and reward. Share it to do a favor to your friends. Thank you for watching keep watching the channel. We constantly discuss low risk high return investments and how you can improve your financial life. I'll see you in the next video.