Happy Holidays! and a bit on Mr. Market

From my family to you and yours, wishing you a…
Wonderful Holiday Season


Meanwhile, Mr. Market…

…seems not to be in the holiday spirit this year. Unless it is ghosts of corrections past.

From a high of ~2941, the S&P 500 is down 474 points (as I write) for a 16% decline. Solidly in correction territory and pushing toward a full Bear Market, defined as a 20%+ decline. Will we get there? Nobody knows. Not even, and maybe especially, those on TV claiming they do.

Could be we’ll blow past -20% into something really nasty. Could be we bounce back to new highs. Could be we meander along around these levels for sometime.

The important thing to keep in mind is that this is all perfectly normal. The market is, and always will be volatile. Enduring this volatility is the price we pay for the market’s wealth building power over time.

Here’s what you should NOT do:

Sell, try to time the market bottom and then get back in. Great in theory and extraordinarily powerful if you could make it work. You can’t. No one can. How do I know? As I’ve said before, anyone who could time the market in this fashion would be far richer and more lionized than Warren Buffett. Yeah, I haven’t heard of that person either.

Here’s what you should do if you are in the Wealth Building Stage:

Stay the course and keep buying shares.

Here’s what you should do if you are in the Wealth Preservation Stage:

Consider adjusting your asset allocation, moving a bit from your bonds to your stocks and keeping your target percentages in line. This is how we “buy low and sell high.”

This volatile and correcting market is also a great chance for a “gut check.” Does it make you:

  1. Yawn, roll over and go back to sleep?
  2. Rub your hands in gleeful greedy anticipation of buying more shares more cheaply?
  3. Chew your nails down to the quick?
  4. Check your fund price daily?
  5. Watch hours of investment gurus?*
  6. Toss and turn, waking up in a cold sweat?

*How to be a stock market guru

If the first two are you, you’re good to go. If the last four are more what you are feeling, that is important to know.

This is a great test to see how you really feel about stock market declines. It is all too easy to say they won’t bother you when the market is going up. Far tougher when it is falling. And it can, and at some point will, get much uglier than this. If you panic and sell when it happens, my advice here on the blog and in my book will leave you bleeding by the side of the road.

Perhaps it is time to consider…

 Why you should NOT be in the stock market

Know thyself, as the philosophers say. And if in doing so, you decide the volatility of the market is not for you there are alternatives. It’s not for my pal Mr. Moose. Here’s how he stays WARM:

Sleeping soundly thru a market crash

Enough. Be of good cheer. Learn what this market has to teach you and remember, this too shall pass.

OK, back to your figgy pudding…

and here’s to…
A Healthy, Happy and Prosperous New Year!


Chart posted by “Jack Damn” on StockTwits…


All is changing, rapidly

And mostly for the better


New Podcast

Doug Nordman of The Military Guide, Jane and myself had a blast being interviewed for this episode of the What’s Up Next podcast:

How to Raise Financially Responsible Children

Some fun outtakes at the end, too.


Old Post

Nightmare on Wall Street


Here’s an absolutely awesome holiday idea:


Think you have free will? Think you see the world as it really is? Think again.




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Important Resources

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  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.
  • Vanguard.com


  1. Dave says

    Sir –

    Since many (most?) readers will be in category 1 or 2 (yawn and buy) – how about comments/tips/suggestions on how else to cope & thrive in a Full Bear / Recession


    • wendy says

      If you are still in the wealth accumulation stage, you might want to consider an approach where you commit a tolerable amount to the market each month. Say you put in $1000 per month. This will allow you to take advantage of dollar cost averaging, forcing you to buy more shares when the market is down, since your investment is fixed in dollar terms. But what if you wanted to be “greedy when others are fearful” as old Uncle Warren advises? Well you could modify your plan as follows:

      The first month you buy $1000 VTSAX, but suppose the market continues to tank, and by month two, when it is time for the next contribution, you notice your initial $1000 investment is now worth $800. Instead of buying another $1000 for the second month, now you buy $1200. Not only do you gain from dollar cost averaging, but you force yourself to buy even more shares when they are on sale. Call it dollar cost averaging on steroids. The key is to pick an initial monthly contribution that you can flex. It does you no good if the market drops 80% and your second contribution needs to be $1800 instead of $1000, but you don’t have enough money to throw in.

      For those in the Wealth Preservation stage, you can still do the same by transferring money from bonds to stocks, but you need to be more careful since if the market drops a lot, you may not be able to follow the formula. Keep it conservative, but enough to be meaningful.

      Now, before everybody jumps on me, and tells me this is just a form of market timing, and that you should only rebalance infrequently, I have found this method allows me to take advantage of a declining market, yet still sleep at night. At the end of a long correction or bear market, it is easy to look back, and wish you invested when things were bouncing along the bottom, and this method allows you to be a participant, rather than cowering on the sidelines, too fearful to commit any money to stocks.

      Studies have shown that going “all in” initially with a balanced portfolio of VTSAX and a bond fund produces the best returns over the long term, I find it difficult to do when my portfolio is already down seven figures, and I am looking at adding additional money in a very fearful market. Your mind can play tricks on you as you think of what toys you could have bought if you were not down that much, but in the long run, I know Uncle Jim is correct, and you should ignore Mr. Market in the short term.

      Happy investing.

      • randomax says

        what you are suggesting is closer to “Value Averaging” – instead of investing a fixed dollar amount periodically, you invest a fixed “value”. Michael Edleson has a great book about this.
        The biggest downside of it all — it’s no longer a “Simple Path” to wealth 🙂

        it’s me Bilbo! I have been religiously following dumping into VTSAX so far and will continue to do so. But like you warned, Mr. Market Orcs are indeed vicious, nasty and ugly!


    • David Wendelken says


      Before you end up in a full blown recession, where jobs become at risk, reconnect with your professional and social network. Get in touch with the folks you’ve been meaning to get in touch with but never find the time to do so. Find the time now.

      Reason #1: Because staying in touch with people you like or admire is good in and of itself.

      Reason #2: If you get laid off, you’ll be glad your network is fine tuned and up-to-date. They can help you find and/or get a good job when you need one.

      Also, cut back on optional spending. See if you can reduce spending on things you need to buy. Set money aside in case you need it.

      And keep yawning about those low stock prices. 🙂

  2. Adam says

    To be fair, I almost always check my fund price daily! But it’s out of habit and hobby more than any particular worry. All of this has happened before and will happen again, to quote a TV show all my friends think I should have watched ten years ago.

  3. Tim says

    Kudos to you for writing this Jim. I follow the blogs of several FIRE bloggers and they are all mysteriously silent when the market soils the bed, I wonder why. You are the only one that offers perspective on the current volatility going on with the markets and your insight as always is refreshing and right on point. I hope you and your family have a great holiday, and let’s hope things go better for investors in 2019.

    • jlcollinsnh says

      I can’t speak for other bloggers, but I can say that market volatility like this is such a non-issue for me I have to remind myself that my readers ARE interested. 🙂

      • Michael Crosby says

        It’s nice to read what you have to say Jim. Keeps everything in perspective.

        Merry Christmas, thanks for all your writings, and look forward to another wonderful year.

  4. Theresia Canniff says

    Thanks for this post…after reading your book I invested for the first time ever! Of course I bought in the VTSAX. So basically I’m just not going to look at it for a few months…let me know when the coast is clear! You are my guide.

  5. Michael sedigh says

    I have been buying around $10,000.00 of Vanguard Total Market, etf, VTI, for the past couple of months, every time the market has dropped by around 2% or so.
    Hope it will payoff in future….It does not look too pretty right now….

  6. Dennis says

    I have my Vanguard 401k configured to match VTSAX and have taxable and Roth at vanguard in VTSAX itself… it is really hard to not get a little stressed out about seeing it drop almost daily… this will definitely be a test of patience and perseverance…

  7. PFI says

    I made the comment the other day that it feels strange to be almost happy when seeing the market dip. But, I know that in 2019 I’ll be putting more money than ever into the market and the lower prices are great. So, I guess I fit #2 right now.

    I give you a good portion of the credit for that, with the stock series and wealth accumulation phase concept. Happy New Year to you too!

  8. Ben Willems says

    Good advice as always. As you pointed out, it’s much easier to think you can stay the course when markets are going up. Not so easy to watch your net worth take a dive, especially for those who’ve only been investing for the last ten years. It will be interesting to see how things play out if the market continues to decline. It’s good to see you offering advice for those who may now be realizing they shouldn’t be in the market.

  9. Anna says

    Hey Jim – your agent here! We still have our set-it-and-forget-it monthly investment set up, but what would you say to folks who have an extra chunk of money lying around in savings? Should they hold out for the “cataclysmic event” predicted for 2019, and invest when the market takes a big hit? We’re skittish about investing it right now.

    • jlcollinsnh says

      Hey Anna…

      Nice to see you commenting!

      Assuming you are investing for decades to come, the only way you should invest, “time in the market is (far) more valuable than trying to time the market.”

      I’m an all-in kinda boy and I don’t like DCAing for reasons outlined here: https://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/

      To “hold out for the “cataclysmic event” predicted for 2019” is market timing. What event? Who’s to say this prediction will come true? What about the prediction I heard today that the market will be up 32% in 2019? Into the trash with both these, and all the rest! Nobody can predict the market.

      There will always be reasons to be skittish about investing. It’s been setting new highs! It’s been falling! It’s been locked in a trading range and not going anywhere!

      I wrote a book about this stuff. You should check it out. 😉 🙂

  10. Neil says


    Happy Holidays to you and yours as well. As for me, I am greedily rubbing my hands together, hoping that Mueller brings me a (belated) Christmas present.

    Have you commented on Bogle’s worries about index funds becoming too big? Is this a real problem, a problem in theory only, or a problem that will have no meaningful affect on the average investor.

    Thanks and all the best in the New Year.

    • jlcollinsnh says

      I have, several times in various comment sections here.

      So far it is a theory only. We have a ways to go before indexing is dominate enough for these negative effects and even then no one can say for sure what they will be.

      Most importantly, there is so much money to be made seducing people into believing they can outperform the market and so many willing to be seduced, indexing will find a natural ceiling.

      Finally, if this is a real problem, what to do? You go first and start actively investing to bring things back into balance. I’ll continue indexing and outperforming. 😉

      This, BTW, is why I never try to convince people who want to argue against the indexing advantage. You think I’m wrong? You think you can outperform with active investing? God bless! Go for it! 🙂

  11. Vinay says

    Not in a panic state, but definitely learning. I have the majority of my investments in VTSAX. I started buying VFORX a couple of months ago, and see that it’s holding its value much better in this market.

    Hmmm …

    • Sree says

      Thanks Mr Collins for all the work . I am reading a lot on this blog and my mind so much clear now . Guess what I tried to find your book in library and am the 5th person in line that has a hold on the book . So I will have to buy my own 🙂

  12. FIRECracker says

    Ooh Kabanda winter wonderland! Hope you guys are all drinking lots of hot chocolate while staring at the snow outside!

    And yes, Mr. Market is definitely not in the holiday spirit this year–but hey, thanks to Mr. Yield Shield, Mr. Cush Cushion, we are can sleep warm and snug in our beds, with visions of Thai palm trees swaying in our heads 🙂

    See you next year, Godfather! Hugs to Jane and Jessica!

  13. Bill and Craig says

    As ususal, great advice Mr. Collins! I can’t wait for my EOY distributions so I can buy at these bargain basement prices.

    Merry Christmas.

  14. Lisa says

    Is it bad that I didn’t even realize the market was dropping until I started seeing posts about it in my FIRE Facebook groups? That was the point when I finally checked my investments. I figure I’m just going to go back to not caring, letting my automatic contributions continue on schedule, and hopefully be pleasantly surprised sometime in a couple of months when I get around to checking my accounts again. I owe a lot of this serenity to your extensive articles and book, I think!

    I hope you and your family have a happy holiday season!

  15. Brandon says

    Jim, you’ve taught me to be apathetic. I feel nothing because I have no idea what’s going to happen next. And because of that, the only thing that scares me is the thought of selling.

  16. naidr says

    On the flip side, this looks like a holiday sale to me. With January 1 just around the corner, 401k and Roth-IRA contribution amounts (among others) reset to $0. If it stays low, or even goes lower by the 1st, it’s the perfect time to max those out for 2019.
    Then again, wealth accumulation phase does influence my view a bit.

    Happy Holidays and thanks for all that you do and have done for this community.

  17. Daniel Dugan says

    Thanks for the sanity check Jim. I am a yawn and go back to bed retiree. I look forward to seeing how we all fare when the bear comes out of hibernation. I would point out that when the economy turns south, people are more often shopping for bargains, so the market for used stuff can actually improve. If you are an entrepreneurial type like the folks in your Case #15, a bear market can be a win.


    Best wishes, Daniel

  18. LK says

    Your blog was one of the first FI blogs I found about 2 years ago that got me thinking about FIRE. Thank you for sharing your wealth of knowledge!

    I’ll be leaving my work in June next year when I turn 49. I’m sort of between the wealth accumulation and the wealth preservation stages since I’ll be out of the workforce in 6 months. Currently I have about 90% investments in equity index funds and I am a bit anxious seeing the drops. I do have about 4 years of expenses saved up in cash. I plan to max out on my 401k next year before I leave work and use 80% equity/20% bonds allocation. Does that make sense or should I be more conservative?

    Thank you! Happy Holidays!

  19. Dr. Remoulak says

    Hey Jim – not surprising, but always nice to hear a calming, rational voice amid the hysteria. I’m also reminded of a poem the great ‘Uncle Warren’ shared in his 2017 annual letter to shareholders:

    If you can keep your head when all about you are losing theirs …
    If you can wait and not be tired by waiting …
    If you can think – and not make thoughts your aim …
    If you can trust yourself when all men doubt you …
    Yours is the Earth and everything that’s in it.

    Merry Christmas and Happy New Year!

  20. Nate says

    I don’t get worried at all. Selling is not an option for me.

    I don’t care when the market goes down and I invest whenever I have the money. I think the market is always a bargain given my time horizon.

    Thanks again for your stock series. It made me a great apathetic investor

      • Simon Kenton says

        Uncharacteristically incomplete, Mr. Collins. You neglected to mention two other keys to investment success:
        – dementia. With auto-investing and re-investing set up, you can dement with aplomb and it continues working for your gabbling self.
        – death. When Fidelity checked, the account class that had done the best was owned by the dead, since they are impassive in the face of market gyrations.

          • Simon Kenton says

            A gas molecule, Mr. Collins, batting about in Brownian Motion, when once it strikes the wall of the containment vessel, thinks gratefully, “Ah! At Last. Thank Boyle. It wasn’t all pareidolia. It was true after all. There really is a grand design, and in my tiny way, I am a part of it.”

  21. Mark says

    Jim, when you suggest reallocating at 20% change, do you do that based on some change in stock market value (Dow, S&P 500) or relative to your own asset’s value? And is it relative the value at the time you last reallocated, as opposed to relative to some market high?

    • jlcollinsnh says

      I’m not all that precise on it, Mark.

      Just when/if I notice a 20%+ move I look at my allocation percentages and bring them into line.

      Short of major moves, we do it once a year.

        • jlcollinsnh says

          Ah, got it.

          On the way down, off whatever the recent high had been.

          On the way up, when my allocation gets out of balance.

  22. Donna says

    Read your book recently Jim. Thanks for writing it. Needed to open my eyes wider. Been increaseing shares in VTSAX since then and continue to buy in this market. However I signed up with Vanguard PA a year ago and the shares in the International and Emerging Markets are looking sick. Would like to self manage and move the funds to VTSAX but I’ll take a real hit.
    Any suggestions? By the way I’m in my mid sixties with still plenty of years to properly invest.

    • jlcollinsnh says

      Glad you liked the book, Donna.

      For reasons I describe in the book and this post: https://jlcollinsnh.com/2012/09/26/stocks-part-xi-international-funds-2/

      …I don’t feel the need for international.

      However, I’m also not greatly opposed to them. At some point, as the US market becomes an ever smaller part of the world economy, I might well add them myself. But that is a ways off for me.

      It is important to note that most people disagree and advocate for international. Including Vanguard, as you’ve learned. Although, not Jack Bogle.

      Should you sell yours? Maybe, but not because they have underperformed. This is in fact a reason that you’d want them: They perform counter to the US market.

      Base your decision on whether you want international diversification or not. Keep or drop them accordingly. But once you decide, stick to the plan.

  23. Mr. Refined says

    Did anyone else read this with Jim’s calming, comforting, fatherly voice in their head?

    While the market crushed my year end net $ goal, since I am in the buy phase of my life, this will actually help my decade goal. And since I won’t withdraw until then, it is a short term scare for a long term blessing. My favorite things to buy are now on sale.
    Merry Christmas.

  24. Marc says

    Anyone else tempted to up their asset allocation from 80% stocks to 100%? I’m in the accumulation phase, and I know it can drop more, but a 14% (or whatever it is now) disconnect is so tempting!

    Any advice here? Anyone else thinking of switching to 100% or up’in their stock allocation?

  25. PJ says

    I recently retired and will confess that I have been guilty of checking my fund prices more often than I usually do.

    I am not afflicted by the other baddies on the list but I currently find all this stuff too interesting to simply yawn and roll over. I am not losing any sleep (yet!)

    The interesting one for me is investment. I have no earned income coming in but I do have a fairly large chunk of cash just sitting there. This was part cash cushion, part splurge money and part market pessimism when I retired in the summer. Tempting to invest some of that chunk at the lower prices.

  26. Miks says

    Know thy self. Yes.

    I think this is a blessing is disguise because it allows us to actually learn about our real self, and not the self we think we are. (Us that have recently started investing).

    I for one have some of the symptoms you mention:

    1) I bite nails (but I do it since I was a child, it has absolutely nothing to do with this market)
    2) I check not so much my fund, but do a google search on S&P 500 if not daily then once or twice a week.
    3) I do watch a quick recap of what happened in the market in the previous day, but in all honesty I was doing that since I started investing.
    4) No problems sleeping or anything of the sort.

    I decided recently that 100% stock is a bit too much for me, so now I’m targeting 90/10 (and keeping an eye on maybe 80/20 in the future), but not by selling anything, but by changing the mix of new money that is coming in until I hit that goal. So this could say that I am too affected by the market to an extent.

    But on the flip side, I am aggressively buying. I have set up my 2019 contributions to be loading up my 401k as soon as possible (to get the early match), I will be putting my whole January paycheck and yearly bonus towards my 401k/After-tax to try to emulate a lump sum investment as much as I can.

    If this decline helps me find my perfect portfolio allocation it truly will be a blessing.

  27. Dawn says

    This is what’s going to keep us on track. Good ,sensible , reasoning. Lord help us if we only had the news to off. But now we can get good ,clearheaded suggestions from a man with what money cannot buy. Years and years of experience investing in the stock market. Invaluable. We are lucky to have Mr Collins with the click of a mouse, anywhere in the world.

  28. Syed says

    This really is the first potential bear market of my investing lifetime (In 2008 I was still in optometry school). While I’m holding strong and trying to find ways to get more money into VTSAX, many of my colleagues are already selling or deciding to “buy on the dips”. Could be a big dip!! It will be an interesting time for the Millennialls.

  29. wendy says

    Stocks are on Sale!
    Just had that conversation today with folks at lunch…
    Wishing you all the best for the holidays!

  30. Mr VT says

    My strategy is that I try to keep my portfolio value the same each week if it’s going down. I just add funds to get it back to what it was last week. Of course it’s easier to do with less of a net worth. If you have a million and it drops to 850k it’s probably harder to come up with 150k then if you have less to start with.

  31. Rock says

    Hi Jim,

    I’m new to stock investing.

    I maxed out my VTSAX through an IRA account, and I really want to take advantage of this discount right now! I would need to open a general brokerage account, but what would you recommend I buy? VTFIAX perhaps? It probably wouldn’t make sense to get another VTSAX, would it? I only have that VTSAX right now. Thank you in advance!

    Please feel free to chime in everyone,


    • jlcollinsnh says

      Hi Rock…

      We hold VTSAX in my IRA, my Roth, my wife’s IRA, my wife’s Roth and in our joint taxable account.

      As to why and what else, there is my book and the Stock Series here on the blog. 🙂

      • Rock says

        Thanks, Jim!

        I’ve read your Stock Series! Very helpful! Much easier to understand than most of the “stocks” blogs out there!

        Let me know if you ever make it out to Portland! I’ll even buy you Voodoo Donuts! 🙂

        By the way, I recommended you sign-up for a LinkedIn account. I think that would be good for your book and Stock Series.


        • Luis says

          In my experience of having a LinkedIn account since the early 2000s, it’s over rated. Again my experience. Therefore, I’m slowly winding down my account since I attained FIRE.

  32. Trisha says

    Love the view from your hacienda! How incredibly beautiful bitter cold can be!

    Thanks for the timely post – I’ve already sent it to several friends who were wondering if THIS is the exception to Jim’s rule.

    Enjoy your holidays – I’ll have another look at those numbers on Groundhog’s Day, perhaps.

  33. David Wendelken says

    At the end of last year I owned a bunch of stock worth a big pile of money.

    It’s down about 10% since then.

    I still own a bunch of stock worth a big pile of money.

    Life is good.

  34. Greg says

    At first I was rubbing my hands together thinking about the buying opportunity.

    Then I started to worry if I should have delayed my extra Vanguard purchase from the beginning of this month.

    Then I remembered that I am front-loading my 401k, so I will resume contributing a big part of my paycheck in two weeks anyway.

    Finally, I realized I was being dumb and should stop worrying about all this so much; a big part of the reason I set up most of my retirement saving on autopilot was so I could devote my head space to more interesting things.

    Like they say on MST3K, “Repeat to yourself, ‘It’s just [the stock market], I should really just relax.”

  35. Dave says

    David Wendelken — your networking response, though not precisely applicable to me*, was the sort of thing I was after.
    Most of the jlcollimsnh readers are yawning at the market decline.
    I was thinking more along the lines of Daniel Dugan’s comment about the market for used things. Is it a relatively good time to put things on eBay?
    Is a recession a good time to buy a car or other durable good?
    It may be a buying opportunity for things other than investments (and yes, though some of my friends might scoff, there are things other than VTSAX)

    and yes, life is good.

    (*I’m already retired, emergency fund over funded, expenses very low)

  36. Freedom says

    All in this sentence;

    “The important thing to keep in mind is that this is all perfectly normal. The market is, and always will be volatile. Enduring this volatility is the price we pay for the market’s wealth building power over time.”

    Merry Xmas…

    • HeadedWest says

      Yes. The volatility is the whole reason the market makes us rich. If the returns were safe, predictable and not scary, the price of stocks would get bid up right to the point where the returns matched the return on bonds. And that would suck.

  37. Taylor Brooks says

    I am not flustered by the drops at all. If anything, I’m more excited about buying.

    I’ve got a solo 401k that only holds VTSAX. Should I contribute evenly each month like I did in 2018? Or make a max out my 401k in one lump sum in early January?

  38. Evan P says

    I had $110,000 in student loan debt about 3 years ago… And, just paid it off this year:) I am debt free! I decided to work 1099 and form my own S-Corp to pay off the rest of my debt and use the leftover to invest in VTI. It was challenging forming my own business and coming up with an investment strategy for my future. I ended up contributing $50,000 between my business profit sharing and individual contributions. I just bought 400 shares of VTI roughly at $135 a share two weeks ago, and now when I logged in Christmas eve I noted that VTI went down to $119 a share… I wish I would of waited another two weeks for it to get lower on Christmas eve to buy more shares.. I guess this is the challenging mental game for me to understand…. It does make sense so I am going to stick with my plan. Any advice or words of encouragement I appreciate it. Thanks for your time.

    • jlcollinsnh says

      Congrats on being debt free, Evan…

      …well played!

      As for missing a lower level when you bought, get used to it. Nobody even buys on the lows or sells on the highs. If you are investing for the decades, it doesn’t matter.

      Be of good cheer!

  39. Armand says

    Hi Jim,

    I really like your blog, but something about this economy just hasn’t been sitting right with me for the last few months. Do you have any thoughts on the Federal Reserve? The S&P 500 return since 2009 is perfectly correlated with the flooding of the globe with liquidity from the BOJ, ECB, Fed, and BOE printing presses. The Central Banks have significantly tapered off the spigot this year, which, I think, is the cause of the bear market. I plan to jump in once the government announces the next round of quantitative easing (which can likely lead to hyperinflation). Until then, staying in cash while this debt-driven bubble economy bursts. The last decade of prosperity has been built on a house of cards of 250 trillion in global debt that needs a reckoning at some point.

    • jlcollinsnh says

      Hi Armand…

      There are always things in the economy that don’t sit right with investors.

      What you have outlined has been the most popular bear case since the 2009 bottom.

      After ten years of predicting these factors would lead to a decline, are the Bears finally right? Could be. Could be, as others are saying, different or additional factors.

      All these things are well known to investors. Yet you think you will be able to use them to time the market.

      Good luck with that.

  40. Tim Cullum says

    Thanks Jim, after reading you for over 5 years, I’m well up and fine with a bear market. I have enough in 3% guaranteed interest to ride it out for years if needed. You taught me “The market always goes up!”

    • jlcollinsnh says

      Hi Monique…

      Thanks for the link.

      It has been discussed in the comments around here. If you are curious the Search function can help you find those discussions.

  41. Mac says

    I’m in a transitional situation and not sure what to do.
    I hit my FIRE number a few years ago but still continue to work because of work subsidizing medical care for my SO. She will finish chemo 2nd quarter, and hopefully will be cancer free and we can exit stage left.
    I sold my house in a very high cost of living area, with plans to move to a very low cost of living area overseas, and use that money to help fund our retirement. Until last year, I had been accumulating 100% stock at high savings rate. When I got the equity from the sale of the house in the bank, I talked to Vanguard CFP. They recommended 50/50 allocation, and advised selling the stock in my tax deferred account and buying a mix of international and us bond funds in the tax deferred account. Then using the money in the bank from the house sale to buy a mix of vtsax and international stocks in a vanguard taxable account.
    The problem is, when I finally got all this worked out in October, the stock market started taking a dive. I didn’t want to sell the stock to buy bonds with the market down. So, now I need to move the cash from the bank into the stocks as it goes down, and hold onto the stock I have in tax deferred, and rebalance out of that into bonds, hopefully when we recover. I know that is market timing, and its a bad idea based on all I learned from you, but I will be way out of my allocation if I keep the stock in taxable, and use all the equity to buy stock in non-taxable. Not sure what to do, will appreciate any advice. On a side note, with the market taking a dive, I have had lots of chatter in my ears about now being the time for Bitcoin, Gold and Real Estate. I don’t really want any of it, but people are banging that drum. It would have been interesting to see you comment on that too at this point, I’m sure you’ve seen that too.
    Anyway, I wish you all a happy prosperous new year!

    • jlcollinsnh says

      My advice would be to stop listening to the noise about the market, Bitcoin, gold and real estate and execute your plan.

      Once your plan is in place it will be even more important to tune out the noise.

  42. Ratnakar Mittal says

    Question for Mr. Money, with the surge of technology based money like cryptocurrency/bitcoin etc. What impact would they have on stock exchanges and other related ventures?

  43. Jonathon says

    Wonderful post, Mr. Collins! Thank you for all you do! It is always reassuring to read your articles especially in such times as of now. Hope you are doing great in 2019 so far!

    Just a quick question:
    What are your thoughts on FZROX versus VTSAX? They seem very similar, the difference only being that FZROX has zero ER. Thoughts? I currently own both, but this may be wrong?

    Thanks again for everything you have done. I am a much better investor than I was a year ago due to your amazing stock series and insights such as this article.

    Looking forward to a lot of great insight in 2019 as well 🙂

    Could it be the year of the bear?

      • Jonathon Winkler says

        Thank you for the quick and thorough response! Amateur move on my part; I will be using the Search button from now to find answers prior to posting questions here and ensure I research it thoroughly. Thank you for the tip.

        Thank you again for everything and looking forward to a great investing year regardless of bull/bear market! Can’t wait until your next post!

        Happy New Year to you and yours,

  44. MD says

    Thank you for the advice about the recent market action. I have been chewing my nails down, tossing and turning and waking up in a cold sweat so I had no choice but to sell at a loss to a sleeping level. I tried to hold it for a year but it was just too painful to watch my account go down so much. Better taking a smaller loss now than taking a huge hit later. I think most people here are still rosy for the now, I wonder what happens when the market goes down another 25%. Please give us an update when you yourself start to get nervous about the market. I guess that will be a great time to buy.

  45. Justin says

    Mr. Collins,

    Hello from a New Hampshire native! I currently reside in PA but plan to make my way back to NH for retirement when the time comes. Being taxed less is something I miss dearly! I hope you may have a small piece of advice for me on my scenario as I like to research an get differing opinions on things from people in the know. So here goes:

    I am 36 yrs old. Just discovered your blog as well as Choose FI an I am hooked and as most people wish I would have started earlier. 2019 I made the year to get things rolling. This year I will have 6 months of my monthly bills in an acct for my emergency fund. That goal will be checked off. I have Vanguard for my 401k options at work. The company matches up to 4% so I am going to do the 4%. And low and behold i found out they offer VTSAX and VBTLX as options!! I had planned to take my bonus and some tax return funds and get a Roth IRA started in those two funds since Vanguard just reduced the initial buy in from 10k to 3k. But since figuring out I can start my 401k with that I am puzzled as to what I should do with the 3k I planned to set aside? I thought about doing the Roth but am not sure what to put the Roth in. As per my reading and research I believe as you state all anyone will need is VTSAX and VBTLX and let it ride. I would like to get a few buckets set up this year just to get started an accomplish my goals to set new ones and continue working forward. Any thoughts on what I should do with that 3k? Any advice would be greatly appreciated. I hope your loving my home state of NH. There is so much to enjoy about it

    Thanks again for all you do and for sharing your knowledge.


      • Justin says

        Mr. Collins,

        Thank you for the response. So the direction I should be looking is another VTSAX in an IRA form? Sad to hear you left New Hampshire but I am sure it was for all the right reasons. Thanks again for your insight as I begin this FI journey.


  46. Dugan says

    Mr. Collins,

    Could you do an article on tax loss harvesting? I just learned about this recently, and given the current downturn in the stock market, and the fact that taxes will soon be on everyone’s mind I thought it might be especially relevant.

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