 Good day fellow investors. One of the most attractive things in investing is trying to time the market. We all see the SAP 500 with huge long-term swings and the best thing to do would be sell at the top and buy again back at the bottom. However, that's something practically impossible to do because if you would be a market timer you would have sold out in 2010, 2011 because you thought this will come back crashing down. And then you would have missed out on a huge upside that happened in the last five years. This figure shows exactly how a market timer thinks. First, the market is rising. Let's see if I should come in. Then when the market is close to the top then they buy in. Then buy more at the correction. The market starts dropping sell. Thank God I sold it. Then only after the market recovers they buy back in and so on and so on. And they miss on the bulk of the positive things that happen. Now you might think, okay, the SAP is clearly overvalued now. I should sell. Yes, but the SAP was overvalued in 2015. It was overvalued in 2013. It wasn't overvalued in 2011. So really if you would have sold in 2014 you would have missed on huge, huge gains from the stock market. Therefore, market timing is attractive, but only in hindsight. When you look at when to sell, when to buy, it's extremely, extremely difficult. And I think impossible. I can't do it. Buffett can't do it. Ray Dalio can't do it. In this video I want to show you three things that we can do. But before I want to show you the top SAP 500 gains and losses per day. The top gains were in October 2008, when the SAP grew the 14th, 11.58%, the 28th of October, 10%. And then in 1987, the 21st of October, the SAP 500 grew 9%. On the negative side, in 1987, the SAP 500 fell 20% on the famous 19th of October. And other are again, 2008, 15th of October. So the worst, the best day of the SAP 500 was the 14th of October, 2008. And the worst day was the 15th of October. So if you want to time the market, you really have to do it on a day-to-day basis, because the best days are on Monday, let's say, and then the worst day is on Tuesday or the other way around. So really to try to catch such moves, such volatile moves, I think it's practically impossible. The problem is that if you miss out on the best 10 days in the market, your returns are practically zero after a long time period, because those best days are what drive long-term returns. And missing out on the 10 best days on a year, your returns are negative practically. So therefore, market timing, yes, looks attractive, but it is extremely risky and leads to negative returns in the long term. You might get it right once, twice, but over the long term, it's impossible to predict what the market will do. If we go back and look at the SAP 500, you can see how the huge 1987 crash just looks like a minor blip on this chart. Perhaps in the next 20 years, the 2002 crash and the 2009 crash will also look like minor blips on the stock market chart. So three things to do apart from market timing are a, the only thing we can do is stay invested, stocks offer, protection from inflation, a positive yield. So investing in stocks is a positive sum game because in the long term stocks offer dividends, takeover targets, add premiums. So there is a lot of positive, the economy is growing, revenues will grow, everything usually grows in the long term in the stock market. So if you are not invested, you definitely lose on the bulk of returns. And timing in the market is what gives long-term positive returns. They will be volatile, but you have to accept volatility if you invest in stocks. Number two, constantly add to your portfolio, especially if something is cheap. So you can rebalance your portfolio by selling the expensive things, looking at fundamentals and buying the cheapest things. And so you constantly rebalance around sectors, international exposures, currencies, and you add a few percentage points to your returns. Let's say a portfolio 100,000 after 20 years at 5% gets to 260,000. At 10%, the return is around 600,000. So three times more, the 5% return. So if you can get those 5 percentage points in a year, additional returns with the same risk, which is possible to do over the long term, I think it's no problem, your portfolio triples over 20 years. And that's what you want to go for, not for not trying to time the market or trying to catch the bottom or highs. That's practically impossible. The third thing to do is, of course, invest in stocks that offer you the wished rate of return at no risk. Let's say you don't invest if the expected earnings return is lower than 10% or 15%. I like to invest in stocks that offer 20% per year at least for me at no risk. Now, you mean such high return with no risk? How is that possible? That depends how you look at risk. You look at risk as volatility. I don't care what the stock price will do in the next three, six months, because if it goes down, I'll simply buy more. What I care about is the risk of permanent loss. That's the only risk that exists for long-term investors. And if you listen to Charlie Munger, you will see that he doesn't define risk as volatility, like academics do. He defines risks as the potential that I lose my money. And if you buy stocks with a margin of safety, with high book values, with business modes, then there isn't such great probability that you lose money in the long term. In the short term, volatility is even a bonus because you can buy more of the same thing that you think it's valuable. And so in the long term, you add a few percentage points and that's what makes the difference, a few percentage points. I know it sounds boring. It's not exciting. Let's buy this stock that will be a 10-bagger. No, a few percentage points will make the difference between negative returns and you being rich after 10, 20, 30 years. The beautiful thing is that you need one, two investments per year that are good and that satisfy your returns. Not more. If you start chasing 2050 investments per year, you're a speculator, you would chase the hottest stock and your returns will probably be negative or very, very low. Keep watching as we constantly discuss ways to increase your returns and lower your risks in order to create satisfying long-term investing returns from strong portfolios. Thank you for watching. Looking forward to the comments and I'll see you in the next video.