How important is luck in determining your investing returns? More than you'd probably like, says Morgan Housel in this week's episode of Out On a Limb. Housel tells host Matt Trogdon that even the most disciplined and long-term investors put returns at risk when they limit themselves to a set holding period.

"Even if you say, 'I want to be an investor for the next 20 or 30 years -- specifically, at the end of 20 years, that's when I'm going to stop investing,' there's a lot of luck that you're counting on in that," Housel said.

Housel points out that if you invested from 1932 to 1962, you would have done much better than if had you invested from 1962 to 1982, "even if you invested the exact same way."

To limit the luck factor in your portfolio returns, Housel underscores the importance of diversifying and being flexible with your time horizon. Watch the video below to learn more.