Bear Market, oh my!
See, just like I promised, Bear Markets can happen!
Almost, anyway.
As I type this, the S&P500 is down not quite 10%. Hardly enough to get excited about, at least if you are looking for a buying opportunity. Unless, of course, you are the financial media; in which case you are in full melt-down mode and shortly we will all be dead of the Coronavirus.
My prediction? A year from now we’ll have trouble remembering what the Coronavirus was.
Quick now, can you tell me when and what was happening in Greece a short while back and why it was sure to end the world economic systems? Without asking Uncle Google?
Still, this might be a good time to again offer my Guided Meditation for when the Market is Dropping should you wish for some soothing during these troubled times.
If that is not enough, at the end of that post you’ll find links to several others I’ve written during past market drops. My views on this one are no different.
Podcasts
It has been awhile since I’ve put up a new post, even longer for one on investing. But I haven’t gone completely dark. There have been several new podcast interviews released, if you want to hear me pontificating:
Over on Journey to Launch, I had a great time with Jamila recording:
The Simple Path to Wealth and all you need to know about Index Investing
She even got me to reveal how I learned I’m not a special snowflake after all.
Over in England, on Meaningful Money, Pete calls this his favorite interview in the 10 years he has been doing them:
In What’s Up Next, Doc G usually hosts a panel discussion, but in this one we go one-on-one:
He also asks me the one question I’ve ever refused to answer. And then, irritatingly, he asked it again.
Curious to hear Mrs. Collins? Here we are together, also on What’s Up Next, along with Doug Nordman of The Military Guide:
How to Raise Financially Responsible Children
Want still more? Check out…
A good book
Speaking of podcasts, one of the greats is ChooseFI. (full disclosure, they’ve interviewed me a couple of times – see link above – and I am in the book)
While it came out last fall, I have just now gotten around to reading:
Why I should be in 100% Stocks
When I first started this blog in 2011, I was retired and we were living off the portfolio. We were in the Wealth Preservation Stage as described in this post, and accordingly we had added bonds to the portfolio. Our allocation is today and has been for a while ~75/25 – VTSAX/VBTLX. We were using the 4% “rule” as I describe here and here to meet our spending needs. We even bumped it up to ~5% while our daughter was in college and the market winds were at our back. As you’ll read in those two old posts, the 4% “Rule” is better thought of as the 4% “Guideline”.
However, in 2016, two remarkable and completely unexpected things happened: This blog started making money and my newly published book started earning royalties.
As my pal Brett reminds me each time he shows up at Chautauqua, this means I again have earned income and that puts me back in the Wealth Building Stage. And in that stage, according to JL Collins, I should be 100% stocks. So, you might join Brett in asking, why haven’t I?
Mostly because these new income streams don’t feel “real,” or, more accurately, they feel temporary. Blog income can, and sometimes, does disappear overnight and book sales taper off over time.
But that hasn’t actually happened. The blog income has remained solid and new sources have come on. Book sales, three years out, have steadily risen thanks to all of you who have passed it on and recommended it to your friends. Interestingly, it has even spawned an imitation trying to lure the unsuspecting: The Simplest Path to Wealth. Two letters off my title. Sigh. Should I be angry or flattered?
So should I rush into 100% stocks? Well, maybe if this market gives me an offer I can’t refuse. But it will have to go further down than where it is now for that.
I just checked again. It is at 3027 as I type this now. Heck, I could have bought at those levels last October.
The moral is, just like the 4% Rule, these are guidelines. Worth paying attention to, not worth obsessing over.
Stay tuned, Brett!
A word on the comments here
Time was I responded to almost every comment here on the blog. But at this point in my life, that just isn’t going to happen. I do read them all and try to respond to those on current posts like this one and those that are unique. But most asking for investment advice can be answered on your own using the “Search…” button at the top of the right-hand column. That’s what I use myself to find stuff I’ve written but can’t quite remember where.
Please do continue to comment whenever the spirit moves you, I always enjoy them. And if you are one of the more seasoned readers around here, feel free to answer some yourself.
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Enjoy the Bear and stay the course!
(that’s from a Victorian Christmas Card)
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Addendum Friday Feb 28th:
With the market down ~15% today from its high, I decided to move some VBTLX into VTSAX in my IRA.
Like buying anything on sale, you never know if you got a good price. Wait and it might be still lower tomorrow. Or the opportunity might be gone.
If prices go lower, I’ll move more.
Of course, since these are mutual funds, I won’t know where my price lands until the dust settles at market close today. Hope it keeps falling! 🙂
