Taking advantage of Mr. Bear



Updated June 15, 2023

Today (March 9, 2020) I decided it was time to cuddle up to Mr. Bear and let him help me avoid some capital gains taxes.

As regular readers here know, for the past few years we have been homeless and nomadic. It is a lifestyle that agrees with us and one we’d like to keep doing for sometime. However, at some point age will force us to settle down. The trick is deciding when exactly that is.

Act too soon and we miss out on extra wandering. Wait too long and I might not have the energy left to easily make the transition. But sometime in the next five years there is a better than even chance we will be buying a “final years” house.

To that end, we’ve had money growing in a taxable account invested in, of course, VTSAX. As I tracked this against the eventual sale to fund the house, I realized that we’d be on the hook for a 20% capital gain tax. Until, at least, this new market sell off.

Suddenly that capital gain was disappearing. Indeed, with an ~8% drop today, it would be completely gone. So with the market down ~6.34%, figuring that would be close enough, I put in the sell order and moved from VTSAX to our Money Market fund. Conveniently, by the market’s close, it was down 7.6%. Almost exactly what I needed. Good luck, that.

So with this sale, I now have the capital freely available and will owe little or no capital gains tax.

At the same time, I then sold an equivalent amount of VBTLX (bonds) and bought VTSAX (stocks) in an IRA. Because this was done in the IRA, there is no tax consequence. 

The net effect is that I have moved bonds from the IRA and stocks into it, again while freeing up money for the future purchase with no capital gains tax to be paid.

At the end of the day, our asset allocation remains the same. This is not a bet that the market has bottomed.


Wouldn’t you have been better off if the market had continued to rise, even if you had to pay the capital gains tax?

Of course, but as I learned playing poker, you play the cards you are dealt not the ones you wish you had. If I had a crystal ball, I would have sold before the drop and happily paid the tax. But I don’t.

This market decline simply offered an opportunity and I took it. I’d prefer the market never went down and I always could sell at a gain. The market doesn’t care about my preferences.

Why not wait to see if the market drops further? That way you not only avoid the capital gain but get to harvest a capital loss.

I want to preserve as much capital as possible for the future purchase. Selling at break even is the sweet spot for this gambit.

Doesn’t this run afoul of the IRS ‘wash sale’ rules? (my thanks to the several reader who raised this question and especially to JohnR who suggested I add it here. This is my reply to James, the first who raised the question:

Wash sales apply to selling at a loss. To quote from the article you linked to:

“Loss from wash sales of stock or securities. This ruling provides that if an individual sells stock or securities for a loss and causes his or her IRA or Roth IRA to purchase substantially identical stock or securities within a specified period, the loss on the sale of the stock or securities is disallowed under section 1091 of the Code, and the individual’s basis in the IRA or Roth IRA is not increased by virtue of section 1091(d).”

In my case, the objective was to sell at break even with neither a loss or a gain. Because life isn’t perfect, there will likely be a small gain or loss when the dust settles. But it will be too small to worry about. (see my conversation with James in the comments below for more)

Why did you move into a money market fund rather than bonds with VBTLX?

Mostly because it was easier and I wanted to get the order in before the market closed. I might move it to bonds later.

Wait, but aren’t bonds best held in an IRA?

Ordinarily, yes. But remember, this was done to free up capital from stocks for potential future spending. Money you intend to spend in the next five years or so is best held in cash, which is what a money market fund is, or bonds.

Planning any further moves?

As noted in the Addendum to my last post, when the market was down ~15% on Feb 28th, I moved some VBTLX to VTSAX. If the market continues to drop, I’ll do more of that. Taking advantage of drops like this are what bonds are for. 🙂

Isn’t this scary?

No. This is scary:



But this time is different, right!!??


Every market drop feels like “This time is different.”

Someday, if it truly is, nothing will matter least of all how you are invested.


1963. Brink of nuclear war between the USSR & the USA, a truly civilization ending possibility.

Great time to buy. No war, market goes back up. War, market doesn’t matter.

Still nervous?….

A Guided Meditation for When the Stock Market Is Dropping


Lessons from Japan’s Lost Decade


Credit Cards…

…are like chainsaws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards. That link will give you my full take.



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Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • 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


    • Jim M. says

      Thanks Mr Collins. I’m very lucky to have discovered this blog and the FIRE community in the last 18 months, mentally preparing me all the while for what has arrived. I can only imagine the panic driven mistakes I might otherwise be making now. So thanks for the continued education and perspective!

      Jim Murray

  1. Mark says

    I did similar the other day. Was able to cancel some winners and losers and move everything to VTI. Simple path from here on out 🤙

  2. Joseph says

    Could you explain the math involved here in a little more detail? I don’t understand how you can come out ahead by selling after a market crash just because you are saving a 20% tax on your gains. Don’t you lose a lot more by selling low than you would lose by a 20% tax on gains?

  3. John G says

    Hi Jim, you must like gambling, which I guess is why you dropped the poker reference. You are definitely more than a risk taker than I. I wouldn’t have been comfortable being 100% in equities if I needed the money in five years for a significant purchase.

    • jlcollinsnh says

      Actually, I hate gambling John.

      Poker is a game of skill and when I played routinely for money back in the ’70s, my skill level was greater than most of the other players in that game. So I routinely made money doing it.

      I wouldn’t have played (couldn’t have afforded that game for that matter) were that not the case.

      As for being in equities with money you are going to need in five years, you are spot on.

      It is only recently I’ve begun thinking that a house might be in our future, and that’s why I took advantage of this opportunity. 🙂

      • Tina says

        Hi Jim,
        How come you decided to buy a house and not continue renting? What would your final home look like (e.g. what features) and how do you plan on buying the home using your investments (e.g. taking out a mortgage, paying cash, etc.)?

        • jlcollinsnh says

          Hi Tina…

          We haven’t decided for sure yet, but if and when the time comes it will be the house for our final years as we age. Owning it rather than renting is simpler and we can easily afford it. A lifestyle choice.

          Ideally, it will be on one floor, 2B/2B, ~1500 sq. ft.

          Probably cash, but it depends on what mortgage deals are available at the time.

    • jlcollinsnh says

      Hi James…

      Wash sales apply to selling at a loss. To quote from the article you linked to:

      “Loss from wash sales of stock or securities. This ruling provides that if an individual sells stock or securities for a loss and causes his or her IRA or Roth IRA to purchase substantially identical stock or securities within a specified period, the loss on the sale of the stock or securities is disallowed under section 1091 of the Code, and the individual’s basis in the IRA or Roth IRA is not increased by virtue of section 1091(d).”

      In my case, the objective was to sell at break even with neither a loss or a gain. Becasue life isn’t perfect, there will likely be a small gain or loss when the dust settles. But it will be too small to worry about.

      All that said, good point to bring up. Thanks!

      • James Wald says

        Ahh, I see. The capital gain naturally disappeared as prices came down to your cost basis and you shifted stock exposure into the IRA at a neutral gain/loss. Nice move!

      • JohnR says

        This would be great addition to the response to the question:

        “Why not wait to see if the market drops further? That way you not only avoid the capital gain but get to harvest a capital loss.”

        Wash sale would actually reduce the benefit and destroy the loss… anything below break even is working against you with the wash sale rules between taxable / tax deferred accounts.

          • Scott says

            I’ve been a big fan of JL Collins for a while now and have recommended his book and blog to many many friends. But now I must admit I did truly realize my level of risk tolerance today and I believe I failed royally.

            I had been sitting on a bunch of cash in NON RETIREMENT accounts for a while now, although I was also pretty HEAVILY invested in VTI and some BND, VXUS and APPL in these accounts as well. I had been buying VTI in small increments on a regular basis but was still was holding a lot of cash.

            During the last two weeks I got way too trigger happy and started dumping this cash (WAY TO QUICK) into VTI as I saw it going down, thinking I was getting a deal!

            I kept buying as it was plummeting and as long as I still had overall gains in my entire portfolio I wasn’t sweating but i started piling in way too soon and way too fast. After yesterdays big drop I was reaching the point of almost being even on my overall portfolio.

            Thats when I realized I had reached as much as I could take. yes I am a failure. I had been telling everyone, just hold and keep buying… but as soon as my overall gains (averaging out all gains and losses) were approaching breaking even I realized I couldn’t handle losing my principle/initial money put in.

            Today I probably made an extremely stupid move as I was riddled with fear. I liquidated out about 1/3 of my investments to cash and did so in a way to break even. I sold gains in apple to cover losses in VTI from recent buys.

            But I sold at the all time low.

            I calculated the amount of VTI i was comfortable leaving on the table and liquidated the rest.

            At the same time I continued to BUY VTI in my i401k account. I am not worried about that money with its 25year time horizon.

            The one good move I did was to sell all my bonds which were close to the all time high.

            Otherwise I am a complete failure as an investor and really realized my comfort level today.

            I’m back to square 1 with zero gains to show for it and sitting on cash again as I watch the market bounce back.

            I hope I can learn from this mistake.

            Tell me to breath JL. I hope I can forgive myself

      • Joseph Knapp says

        Am I understanding the IRS code quoted above to mean that in case of a wash sale the amount contributed to a regular IRA would not be deductible from Ordinary Income when filing your taxes or would be taxed when withdrawn from your Roth IRA ?


  4. vorlic says

    You rascal, you had me thinking you’d sold the lot, you really did.

    And I did rather have the mental image that Kibanda was already your “final years” place.

    Coincidentally, within the last fifteen minutes, I opened my first account with Vanguard Investor UK – their Life Strategy 100% “Accumulation”. Not buying the dip, honest. I couldn’t care less 😉

    Stay well, just wash your hands.

    Best, Vorlic

    • jlcollinsnh says

      Kibanda is an investment/vacation house.

      Winters there are too brutal to grow old there. At least for me. 😉

  5. Matt says

    I rolled over into VTSAX with my entire retirement between this last December and January. After today I’m down a healthy amount but feeling good because I’m at the beginning of my wealth building and I love that the market is doing this in a year when I plan to save and throw money into the market like I never have before (thanks to the advice I’ve received on this amazing site).

    My question is, would it make sense to sell to harvest loses after having only owned the fund for a couple months? Or is this something to think about after I’ve owned for at least a year. I live in California.

    • jlcollinsnh says

      If you hold the investments in a taxable account, harvesting losses is a fine idea.

      Just be careful the the “wash sale” rules. (see my conversation with James above)

      • Matt says

        Thanks Jim.

        My first comment on your blog and I have a total brain-fart moment and completely forget that this only applies to taxable accounts *eye roll*.

        I am 75% VTSAX in my brokerage account and will definitely take your advice.

        Thank you for your kind and helpful reply.

      • vorlic says


        It was always there. But they looked for it, found it, and have given it a very fancy name.

        Now, how keenly the authorities show us how seriously they can “manage the threat” by spending your Protection Money… unless you’re clever, like what that Mr Collins chap is 😉

        Now I’m getting too political again… retreating to my fortress!

  6. Paul B. says


    I’m a big fan and love your writing. I have a concern with this particular article. By selling VTSAX in your taxable brokerage and buying it back in your IRA you’ll be subject to IRS wash sale rules. It’s not likely the IRS will detect this, but there is always the risk. You might consider selling out of VTSAX in your IRA and putting the money in the Vanguard 500 Index fund. They are substantially different enough to avoid the wash sale problem.

    Best Regards,


  7. Life Outside The Maze says

    Interesting sort of twist on tax loss harvesting to buy tour place JL. If real estate follows this correction maybe you buy that “final years” place in my neck of the woods 😉 My question for you is how you feel about the etf versions of the vanguard funds? For example any concern at all about me being in VTI rather than VTSAX (I don’t have a Vanguard account, long story about taking advantage of brokerage account sign up bonuses). Lastly let me just say for your sake that I am glad that you don’t have “a cystal ball” haha

    • jlcollinsnh says

      Where is your neck of the woods?

      VTI and VTSAX hold exactly the same portfolio, so both are fine.

      In fact, VTI has a slightly lower expense ratio and is the slightly better choice.

      Mmm. Maybe I should switch one of these days…

      “a cystal ball”? Whatever do you mean? 🙂

      • Life Outside The Maze says

        You might remember me better as that guy who you hung out with in Golden Colorado but online I go by this nifty alias handle haha (not sure I talked much about my blog). As far as the cystal ball, it was a bad attempt at a joke since you left the r out of crystal ball in your post. Oh well at least I make myself laugh. Yeah that VTI expense ratio of 0.03% is pretty great.

      • jlcollinsnh says

        Didn’t make the connection as to who you are, but I did get the cystal ball reference. And I fixed it in the post, so I was making my own little joke. 😉

        We are headed back to Denver later this month and look forward to seeing you guys in Golden!

  8. Nicole Marshall says

    Hi Mr. Collins!
    I just finished reading your book. It was amazing! Immediately after I finished, I moved everything to Vanguard in VTSAX.
    I do have a question though. Today is the 9th, and as you said here, it went down 7.something % today… Where are you finding this information? I want to take advantage and dump more money in, but all the numbers that I keep seeing are from March 6th. Do you know why that might be? If I put in a request now, I’m not sure what price I’ll be buying into.

      • Paul W. says

        Hi Jim,
        So I clicked on the Yahoo link you posted just for fun and “Lions and Tigers and BEARS!!” the world is falling apart over there.

        Thanks for all of your advice and perspective. It’s always been my belief that set it and forget it should work and now I understand how to do just that and sharing it with my son and daughter.

        • jlcollinsnh says

          Yeah, I should have added a warning label about going to that site. It is fine for the raw data, best avoided for the panic opinion pieces 🙂

  9. Tim brinker says

    What do you think about employer 401k rollover into another institutions individual 401k during this market down?I’ve recently resigned from my job and was wondering about the rollover. My understanding is that is takes 5-10 days for the transaction to complete.

    • jlcollinsnh says

      If you are rolling from like fund to like fund, it shouldn’t make any difference.

      But I would roll an old 401k into my IRA rather than a new 401k. More control, more options.

      • timothy brinker says

        The new 401k would be an individual 401k, so I would have control over investment choices. I was just worried about the 5-10 days out of the market if the market started rising.

      • jlcollinsnh says

        That 5-10 day lag is an issue, especially in these very volatile times.

        You might want to wait until things are calmer and then make the move.

        Good luck!

        • Timothy Brinker says

          The only reason I wasn’t thinking of rolling over my 401k into an IRA, was that I normally do a annual backdoor Roth. Any suggestions…

  10. Nick says

    Aren’t your two transactions the very definition of a wash sale? You sold VTSAX at a loss and the same day (well within the 30-day limit!) bought the identical fund in a different account. If it’s a wash sale, you can’t declare the loss.

    If you had sold VTSAX and bought, say, VFIAX (S&P 500) you would have a fund that’s very closely correlated with VTSAX – but it would not be a wash sale and you could take the loss.

    Granted the purchase in the IRA will not be reported to the feds – but it’s still a wash sale.

    This is from IRS Pub 550 (note the last bullet):

    Wash Sales
    You cannot deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities.

    A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

    – Buy substantially identical stock or securities,
    – Acquire substantially identical stock or securities in a fully taxable trade,
    – Acquire a contract or option to buy substantially identical stock or securities, or
    – Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.

  11. Jordan Burnett says

    On another plus side, how awesome is owning the index? Not only do we beat actively manageD funds, we have a circuit breaker that kicks in if our underlying index drops too far!

  12. JSC says

    Hi Jim, I’ve been on a journey to learn about investing for the past few months starting with learning a lot about Warren Buffet and also his bet, Jack Bogel, others, and now you. I’ve listened to the 3 interviews of you on ChooseFI, and been working through the Stock Series and have learned a lot. Thank you so much!

    My wife and I are totally convinced (after all of the research) that index funds are the most effective way to invest, and consequently, that we do not need a financial advisor after all.

    At the moment, we are in the process of funding our first retirement contributions at age 50 & 58 for 2019. I know, we’re getting a terribly late start! We do have 50% equity in our home. Significant health issues has made it hard to get ahead, despite living a conservative lifestyle.

    Thankfully, business has been good last year, and we are making maximum contributions (based on our wages) into SEP-IRA’s that we just established with Vanguard. We are hoping that funding will occur over the next couple of days so that we will be advantaged from this dip in the market. We’re buying 100% VTSAX. While I’m risk adverse, we think the aggressive position is necessary given the late start.

    Newbie questions:

    1. I’m curious as to why is INDEXSP: .INX is down 7.60% and VFIAX is down 8.01%, I thought these were supposed to aligned?

    2. Why is the index per share $2,746.56 and VFIAX is only $253.19?

    Nice move in the market for you. Good luck with the house hunting.


  13. dylan says


    I dusted off The Simple Path to Wealth this afternoon to re-read part II and the Big Ugly Event chapter… and came across my prior highlighting-underlining-starring of your beer and foam analogy, love that one. “We’re in it for the beer” (opens beer and toast to you).

  14. Dawn from UK says

    Big thanks for sharing your decisions and invaluable experience. I completely get what you did.
    Guys like you,and there arnt many, keep me sane and grounded in a world presently in chaos.
    Almost my second Dad!

  15. Katie Camel says

    Smart moves! Thank you for sharing your choices and thought process. It’s great to see the decision making during retirement for those of still accumulating wealth.

  16. Jeff says

    Haha! Love the photo. Seriously though, great points on how to embrace the bear. We are staying a bit more liquid to take advantage of the dips. We will invest all the way through it and probably average out our gains and losses, it won’t matter in the long run, lots of bear to go around. Def not panic buying!

    Just got my Simple Path book back from my friend who borrowed it. He has seen the light and has been talking my ear off about index investing….here goes day two. I’m eating it up though haha. Thanks for making the world a better place!

  17. gofi says

    Every time I’m iffy about the mkt (I’ve actually been surprisingly calm the last few weeks), I watch Jack Bogle’s interviews on YouTube. And this one has the same relieving effect – thanks Jim.

  18. Physician on FIRE says

    I was confused for a minute until I read the comments. James made an excellent point about wash sales, but I see that your intent was not to harvest a loss, but to free up cash without altering your asset allocation. With that goal in mind, the transactions are a win.

    I also made some trades yesterday, locking in some $40,000 in paper losses while remaining invested. Tax loss harvesting is a powerful tool for reducing ordinary income and offsetting future capital gains.


    • jlcollinsnh says

      Yeah, I could have been more clear on that.

      In fact, at JohnR’s suggestion, I have added my response to James in the Q&A section of the post.

  19. John says

    For married filing joint, the capital gains tax rate is zero up to $104,800 ($80,000 + $24,800 standard deduction). So this article makes sense to me if you already had $104,800 in capital gains this year.

      • John says

        No I was specifically focusing on long-term capital gains tax. In fairness to your article you did say that you were trying to avoid the 20% capital gains tax which indicates that you have income and capital gains that puts you in the 20% capital gains tax bracket. I was simply trying to point out that someone who is married filing jointly and is purely living off of long-term capital gains and qualified dividends can have $104,800 of income from those two sources and pay zero federal income tax. So what you suggest in your article would be unnecessary for those individuals until they exceed $104,800 of income from those two sources.

  20. Mike says

    You’ve always got a smart play up your sleeve, Jim! Here in the UK, the stock market dip might just fortuitously line up with the new tax year in April and allow some similar effective moves from taxable accounts into tax-advantaged accounts with annual allowances.

    Also, take care with this virus out there and stay healthy.

  21. Geno says

    I have $17,000.00 in Fidelity Total Market Index.

    My cost basis is $20,000.00.

    If I sold this index fund, to harvest the loss, here are my questions.
    1. How long do I have to wait, to buy a similar fund? How many days must pass to avoid the wash sale rule. Is it 31 days? So on day 32 I can purchase it and avoid the wash sale rule?
    2. And would a qualifying fund be an S&P 500 Index fund


  22. KDP says

    Hello Jim,

    I have seen your Google Talks show and Youtube videos. I like your advise.

    Kindly guide keeping in mind the current situation in the stock market as of 10 March 2020. I would like to invest in index ETFs such as Total Stock Market Index (VTI), S&P 500 Index (SPY) and Nasdaq Index (QQQ).

    Please suggest a method with which I can invest gradually in parts rather than invest all the money at once. There seems to be more down-side slide in stock market remaining. So should I invest a fix amount each week or should I invest a fix amount on every x% reduction in price?


    • Carlos says

      Hi Jim,

      What would you do if you had 100k in cash right now and wouldn’t need to withdraw anything from it for the next five years?

      • jlcollinsnh says

        Hi Carlos…

        That would depend on what I planned to use it for in five years and how willing I’d be to delay that use.

        For instance, as the post above described, I just moved a large sum to cash because we might buy a house sometime in the next five years.

        With the market down ~35% (March 23rd) I might begin to sell some bonds and increase our stock allocation. But I am not yet willing to deploy that cash and risk not having it for the house.

        If the market drops, say, 50%+ I’ll be sorely tempted. 🙂

        • Carlos says

          Dear Jim,

          My idea would be to start withdrawing dividends after five years. I need 6k dollars per year to cover my expenses, I live in Argentina and already own a house.

          • Dawn from UK says

            Oooo tricky one some thoughts for you to ponder.
            How long has this money to last you? Is it for the rest of your life. What’s your age?
            It will be interesting to see what Jim says.
            You could split it 50/50 half equities half bonds. Really to be safe 4% would be your maximum withdrawal rate so not to run out of money .so that still leaves you $2000 short of your required income. This market drop is certainly in your favour to go more into equities so 75/25 split. In 5 years would you still be in a position to earn money if needed the market hadn’t recovered and you capital was down to 70k?

          • jlcollinsnh says

            Hi Carlos…

            First, you should be familiar with the 4% guideline for safe withdrawals. If not, there are two posts on it in my Stock Series you should read. This is different from just dividends.

            We are also assuming that you are investing in broad based index funds like a total stock market fund or an S&P500 fund, both of which are US-centric. I have no idea what is available to you in Argentina.

            But using those type funds and a 4% withdrawal, you’d need 150k to pull $6000 a year. While it is certainly very possible your 100k could grow to that level in five years, there are no guarantees.

            If you really plan to only pull dividends, with the current drop, dividends on these type funds are ~2.5%

            To generate that in dividends you need 240K.

            Could your 100k grow to that level in five years? Possibly, but it would take an almost 20% annual rate of return which is not very likely:

  23. Jill says

    Two weeks ago I bought CA tax free bonds… just seeing your note “that’s what bonds are for” in relation to a dip… what if your bonds are tax free? Decisions!

    Congrats on the settling down option!

  24. Bryan says

    Just here to say I read your book each January to stay refreshed (I take it out at the library..$orry.) “The Gambler” FU Money video is gold and I listened to the Guided Meditation Video on Monday when apparently the Corona Virus was going to destroy the planet (I don’t watch TV or read the News but the fluctuations in VTSAX is a good barometer of the human species irrational behavior.) Thank you!

  25. Jae says

    Can you start a podcast Mr. JL so we can listen while at work? Oddly they look down on me reading early retirement and financial blogs all day in the office.

  26. George says

    How were you able to specify exactly which shares would be sold in order to break even?
    Which cost basis method should be used?
    I see that the options for Vanguard are:
    -Average cost (AvgCost)
    -First in, first out (FIFO)
    -Specific identification (SpecID)

    • jlcollinsnh says

      Since I liquidated virtually the whole thing (kept a few shares in just to keep the account open for future investments), I didn’t have to worry about the method.

      I knew what my total cost basis was as Vanguard shows this on the account. From there it was simple math to calculate what share price breakeven represented.

      • George says

        Makes sense.
        I understanding that setting a cost basis method is a one time thing for Vanguard brokerage accounts and can’t be changed later.
        I haven’t set one and also have not sold anything yet.
        Is there a recommendation for which method should be set?

  27. sam says

    I started investing for the first time back in the end of December. Most of my savings. 85% SWTSX (Schwab equivalent of VTSAX), 10% bonds, 5% speculative stuff. Needless to say it was horrible timing. I’m just waiting it out and buying more, right? Reassure me? Also, when would you recommend rebalancing, after a set amount of time, or when the percentage gets really off (like if i have 15% bonds instead of 10%)?

    • AJ says

      I did the same thing. Relax. There is no such thing as horrible timing when you are in the market for more than one decade (markets will recover – promise). Just keep averaging down till market hits rock bottom – nobody knows when this will be.

    • nadir says

      That is addressed here: https://jlcollinsnh.com/2014/06/10/stocks-part-xxiii-selecting-your-asset-allocation/

      “That said, if you are willing to do a bit more work, you could slightly smooth out the wild ride and possibly outperform over time by adding 10-25% bonds. If you do, about once a year you will want to rebalance your funds to maintain your chosen allocation. You might also want to rebalance anytime the market makes a major move (20%+) up or down. This means you will sell shares in whichever asset class has performed better and buy shares in the one that has lagged.”

    • jlcollinsnh says

      There is no better gift for the investor at the beginning of their wealth accumulation phase than a nice big Bear. 🙂

    • Livewell says

      You might consider selling the VTSAX and same day buying an equivalent, like the S&P index. This will capture the capital loss, which you can write off in $3k chunks on your taxes (or larger against capital gains).

      It’s not ideal to be in that situation, think of it as a silver lining.

    • Samantha says

      We’re on the same page, Greg! I just contributed $6K for 2019 in my Roth and bought VTSAX with half of it. I’ll see how things go and buy some more VTSAX with the rest if the price drops more. I’m even considering contributing my 2020 max and going all in if things keep going at this rate!

      JL – I can’t thank you enough for teaching me The Simple Path to Wealth. I only wish I would’ve had the interest in this 20 years ago. Better late than never, right? 🙂

  28. Kevin says

    I’m 36, I just started a great job about a year ago. It pays well and lots of OT. I’ve been investing in the total stock market index fund as you suggested. I have IRAs and then just an investment account that I will have to pay capital gains taxes on since my company doesn’t have a 401k.

    Anyways my question is, with the market dropping and I expect it to continue to drop for the next two years. I wonder should I just leave my money in the total stock market index fund?

    I plan on using it as a retirement account so I don’t need the money. Assuming my job continues. I do tech work so I should be able to assist people working from home if needed.

    I have read about your bond percentages As concerning investment. I’m just wanting to make sure that I’m doing my investing properly. I have 90% of my money invested in the total stock market index funds. It’s dropping. It will continue to drop. So I just leave it in there and then in like ten years it will go back up?

    Do you think I should transfer some of it over to bonds for the next two years? Or just leave it in the total market index fund?


    • Frugal Steve says

      Hi Kevin,
      I understand where you are coming from. I’m the same age and 98% invested in total market index funds. I started my first post college job (with a 401k) in June of 2009. So pretty much all of my investing life has been sunshine and butterflies. It has been a true test of my resolve to not panic and pull most of my money out this past month. One thing that I’ve been thinking about to help me stay the course is from a book about index funds I read 5-10 yrs ago. (It was a pretty well known book, but I can’t remember the name). It stated a lot of the statistics around historical market performance. One of the things I remember was that if you go back through the past 100+ yrs of the stock market and pull out the biggest single year losses, those are almost always immediately followed by a huge gain the next year. If you try to time the market, I think it’s more likely that you get back in too late and miss some of those huge gains. Especially considering that it’s human nature to not pull your hand away from the hot surface until after it’s burned you (i.e. the market drops, then you move money after it’s already burned you). Then you are really tentative about touching the surface again until you receive some evidence that it’s not hot anymore (i.e. You don’t get your money back in until you’ve already missed some of the big gains).

      We are young and have at least a couple decades before we need to touch that money. I say let it ride and keep adding to it.

      • Dawn says

        Definitely you are so correct. You’ve git time on your side too cos your young. You may go through these drops a few times yet. Use this one as a learning and risk tolerance exercise but dont sell anything! Remember selling is NOT an option in a crash.

  29. Miranda says

    Hello JL,
    First, thank you for your blog and sharing all your knowledge. I keep coming to learn, but still a bit lost 🤗
    If I had 20k to invest now, what would be the way to go? VTSAX all the way in? I just want to make sure I’m taking the right path.

  30. Ed says

    Hi Jim,
    Just read your book — your simple path approach is exactly what I’ve been looking for. As soon as I finished, I started the process of moving my Roth over to Vanguard…ready to switch from the ETFs Merrill Edge’s Guided Investing had me in (I had long sensed I was doing this all wrong) and buy into VTSAX. I finally had a plan!

    Of course, now as I await the transfer to be complete, the market has dropped significantly. Does it make more sense to let my previous investments ride it out and just buy separately into VTSAX? Or go with my initial plan to sell everything to buy into VTSAX despite the losses?

    Thanks for all the info and apologies if this has outed me as an inexperienced “n00b”.

  31. Scott says

    JL I need your advice here… I am in a position to liquidate my entire TAXABLE Investments and BREAK EVEN on my principle.

    I know you shouldn’t sell low but what is more important? Preserving the principle no? I’m confused. I don’t see how the market (and world situation) is going to get any better BEFORE it gets worse?

    Is my best move not to get out now and keep all my principle and then re-assess over the coming weeks/months?

    I AM NOT TALKING about my i401K. I’m not worried about that – there are 25 years I can’t touch it.

    I’m talking about my taxable savings/investments. My “cash”

    I work in an industry that has been wiped out – involving events with large groups of people. So now my income for this year will be ZERO. I have enough savings in Cash to last a while for sure but should i be risking my principle anymore at this time?

    Should I liquidate and break even? Or is this the suckers move?

    Didn’t you just do the same?

    Please note I am currently buying VTI in my i401K at the same time.

    Please help clarify. Yes you can use me as an example.

  32. Dusty T says

    Mr. Collins,
    Most of my retirement funds are in IRAs and therefore only taxed when have distributions. What is my strategy at this time as i have my IRAs in index funds.

    Do i hold on and try to enjoy the ride?

  33. Anne says

    After learning about markets through the stock series a few years back a source of entertainment for myself starting involving surfing to different major news media websites and voting on who has the most dramatic coverage of big market movement.

    Let me tell you they did not disappoint this time.

    Then I come here and see a woman and bear in a delicate embrace. What a perfect contrast to the manufactured panic I’ve seen elsewhere.

    Thanks for the article! I always learn something new here.

  34. Adam says

    Thanks for posting your recent thoughts on this Bear! I literally just started reading your book a couple of weeks ago (I read just little at a time when savouring a good read).

    This is so true and exactly the feeling I’m trying to ignore:

    “Even though Every market drop feels like “This time is different.” ”

    I will just say, whether it is or not, it feels different this time because we can all see this is going to be bad for months maybe longer. By looking at countries affected we can almost see what we all face in the next 2-8 weeks as coronavirus COVID-19 cases explode. For example, I’m in the UK and we are just 2 weeks behind Italy, as are other huge European economies as well is the US.

    So it’s comforting to have the reminder you gave (because it’s effectively a war against the virus).

    “Great time to buy. No war, market goes back up. War, market doesn’t matter.”

    “Someday, if it truly is, nothing will matter least of all how you are invested.”

    From your other recent post, I truly hope in a year from now we can’t remember why there was a big dip this at this time. Stay healthy all 🙂

  35. The Frugal Humanist says

    Ironically on Feb 19th very close to VTSAX/VTI’s 52 week high, I logged into my account in order to rebalance. I was still a smidge under the 5% out of balance trigger as per my IPS (70/25/5 target for stocks, bonds cash). My stocks were at 74.X%. According to Vanguard’s portfolio watch tool still “close enough” to my target AA.
    I realized rebalancing would have to be done mostly in my taxable account and would trigger capital gains…..so I decided to do nothing….and think about it for a few days….now this “problem” has resolved itself.
    Now with the market going the other way I may have to rebalance in the tax deferred accounts, which should be less of a mental hurdle.
    Before this post, I wouldn’t even have thought of strategically picking “break even” lots to work with, will definitely give this some thoughts…..once I dare to look at my account again that is.
    Considering I only have the investments to live off of and am 3.5 years into early retirement, I am still suprisingly calm. If/when that changes, I’ll go find your guided meditation again and listen to it, your voice sure is calming!

    I can’t help but wonder though if this analysis paralysis thing is helpful or not….you know like they say people who don’t touch anything usually fare best….

  36. Tim says

    Thanks for sharing Jim.
    Long time follower of your website here. I’m also looking into freeing up cash for my permanent home in the US.

    You mentioned in your post the reason of your sale is to “have the capital freely available and will owe little or no capital gains tax”. I understand you might have personal reason to want liquid capital in the next few years, but would you say this sale is similar to timing the market? As the passive investment crowd generally advice against market timing, I wanted to understand what your thinking is behind selling when you did, versus another time (months/years later, before home purchase, etc) or dollar cost averaging.


    • jlcollinsnh says

      Hi Tim…

      I am very much against market timing or, more actually, very aware that doing it with any effectiveness is not possible. This is a major theme throughout my Stock Series and book.

      This post was simply about taking advantage of an opportunity the declining market happened to put in front of me.

      • Tim says

        Sorry if I’m confusing the two or not seeing clearly.

        From my understanding, market timing is when you act on your investment based on the condition of the market. If you move money out of the market because of the declining market, is that different from market timing?

      • jlcollinsnh says

        Timing the market is guessing where it is going to go and making investment moves accordingly.

        What I did was to observe where the market was and take advantage of it.

  37. Dawn from UK says

    Hello Tim
    My personal understanding of Jim’s sale of some equities is no, he is not trying to time the market. This part of his portfolio that’s sits in a taxable account, so big gains will be hit by tax , holds equities index funds which he intends to use this money to buy a home within the next 5 years. With the sudden stock market volatility, hes wisely got his money out and only lost what he would of had to pay tax anyway. As the market was on a a bull run he left his money to ride the wave but suddenly eveything changed, under normal conditions ,retirement fund or investments for 10 years plus he’d have left it alone. But he knows he will need this money within the next 5 years so took it out to protect capital. Ideally money needed within the next 5 years shouldn’t be in equities. But the bull run was surging ahead so he left it in. Hes not sold out anything else. I can see where he’s coming from. Hope this helps.

  38. Joe says

    Hi Mr Collins,

    I’m in a similar situation as you (wanting cash for down payment but all my assets are in the market), though with a few differences so I’m curious how I can determine whether this is a good move for me to make as well? “Sell low” goes against my very fiber of being but if you ran the numbers and decided it was a good move, I’ll do likewise.

    Thank you!

  39. Drew says

    While I agree the market is overall not yet a concern via covid-19 following your advice, the comment about 1963 being closer to the brink of ending civilization than current times disagrees with the experts on nuclear and climate catastrophe.

    The bulletin of Atomic Scientists put the Doomsday Clock to the lowest it has ever been: 100 seconds to midnight. In 1963, we were 12 minutes to midnight.


    We may be closer to market collapse than we think.

    Remember to vote, people.

  40. Mark says

    Messaging from rural Yorkshire, UK .

    I am down on my investments, having only invested 8 months ago.

    I was an idiot and held my surplus funds as cash for 5 years. I then took the plunge in June 2019 as I knew the cash could not just sit there.

    VTSAX (uk version – 0.1% product fee plus 0.15% portfolio fee).

    I have a couple of shares. Not because I think I’ll beat the market, but because I take an interest.

    I have always said that I could ride any storm. But secretly knowing that I really couldn’t.

    Anyway, having read your book, I can honestly say I am so laid back about the markets right now. I never thought that I could ever be in this mental state. I am simply entertained my the markets. There is not an ounce of worry.

    There is no other place my money should be. It’s where it should be. If I want the financial freedom I am on target for, then it’s the only place my money can be.

    (I don’t want to retire early. I want the OPTION to retire early).

    So, thank you. You have educated me and moulded my mental state for the better. For that I will be forever greatful

  41. Dawn from UK says

    Hi mark
    Similar position to you and from lancashire UK
    I agree with your sentence. “There is no other place my money should be. Its where it should be.” You spoke the words of my heart.
    I feel exactly the same. I’m surprisingly calm even though I had a quick peep of part of my investments tonight and thought ok, quite a drop, but I’m ok.again, alot in part is thanks to jim collins.

    • Mark says

      Out of interest Dawn. In terms of geographic, how are your investments broken down?

      If you didn’t know, you can see this from the ‘Investments – insights tab’ on your Vangurd account

      I am;
      32% North America
      52% UK
      3% Asia-Pacific
      3% Europe
      3% Japan
      (7% – cash) – I Know, I shouldnt!

      I definitely have home bias in terms of the UK. Ive been spurred into this by the value in the UK. Of my UK investments they are split 50/50 between the FTSE All-Share and FTSE 250. The 250 is a more UK focused index when compared to the 100. But historically the returns have been far better than the All-share and 100.

      I have friends who are invested in Lindsell Train Global equity and tell me I should follow suit. The fund has had excellent performance over the past 9 years and I would have been better there. But who has actually been in there for 9 years…? And will the out performance continue when considering the size of the fund? The Fund managers there are clearly very smart and also humble. But speaking with history in mind, outperformance cannot. So my friends may have had 4, 5, 6 years of outperformance but will be paying 1% per annum for 40+ years…

  42. BrianG says

    Hi JL,

    I have lots of CASH that I need to deploy.

    I’m talking like over 50% of portfolio.

    Do you have any guidelines on how to execute VTI purchases? It doesn’t feel right to buy all at once. thoughts?

    Thank you sir.

    • Vik says

      Hello Brian, Mr. Collins, everyone willing to help !

      This is my first post. Please help.

      Brian – I am in the same boat. I think you need to read the book or at least the link https://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/ that explains what to do.

      However (now this is for all the Samaritans) – this is a special situation. Now, the article above is accurate when times **are** not bad. At **that** time, the right thing to do is to believe the stats and take the call. So if you time travel back a month **(Feb, 2020)** – it is the perfect strategy.

      However now, we have a variable in the equation – a possible recession. This changes everything, right? This is a completely different situation. Now we “know” the probability of going down is more than going up. It is still imperfect information (for all poker fans) , but different from the information that is assumed for the article above?

      I think – what we all need is another chapter – What to do, when you have/get lots of cash and there is a recession happening at the exact time. I think it could be a jackpot if you play it right?

      Or am I still missing the point :-(.

      Help ! O Mr Collins and all the saviors.

      Seeking FIRE,

  43. James says

    So here it is. Read your book a few weeks ago and have been reading the stock series though not all the way through. After finishing the book and doing more reading I was ready to reallocate the holdings in our 401k accounts in to VTSAX and similar funds. However, this week happened and now I’m a bit well, shocked to say the least. My question is, do we reallocate now while VTSAX is down or wait of course never knowing when it’s at the bottom? Not trying to time it just trying to determine the best I can.

    A newbie question and sorry if it’s out there already. Thank you.

  44. Zenibe says

    I am in 100% agreement with you, JL Collins also, please consider the following “What happened to stock markets during previous pandemics (and epidemics)” put forth by Fidelity International:


    Yes, the S&P 500 will return all of the losses incurred during the past few weeks as a result of this present international health crisis, history dictates this as inevitable however; for how long do we have to endure these losses?

    Ah….Market timing….Of course no one can say exactly when confidence will return to international manufacturing, consumer spending hence, the stock markets.

    Everyone’s savings situation is different and our ages vary. I’m already retired and was reaping substantial gains in the market place (100% S&P 500 Index Fund) for years however; up until yesterday (Friday) I placed an order to sell all of it, to take effect at the close of trading.

    Fortunately the index fund I “was” invested in bounced back returning 9.31% this past Friday which reduced my total losses sustained over the last 2.5 weeks to “only” 12.5%.

    I moved everything over into a money market fund as I cannot afford to take any additional hits to my golden egg. As humanity travels more and has access to information (facts, opinions, nonsense, error) and manufactures/imports-exports perhaps now more than ever before in history therefore, I’m not sure we can predict when (how) the U.S. stock market will bounce back by utilizing previous histories (incl. the link I’ve posted).

    I’ve confidence the S&P 500 Index will return all of it’s losses incurred and post respectable gains in time. Perhaps if one has reliable, steady income, are some years (maybe 4-10) from retiring and it’s properly allocated to take advantage of these reasonable/low prices to acquire more and more of the S&P 500 Mutual Index Fund of their choosing then perhaps they’ll elect to do so…or not.

    With all of that said, I do have one question related these very unusual times we are presently in and that has to do the portion of “Quit Like a Millionaire” which speaks to traveling the world. No one could have predicted the timing of this pandemic but its effect on ones mobility in terms of international travel in and out of certain “low-cost”, stable nations that are still “safe” and accepting foreign travelers appears a bit limited unless you are prepared to (and permitted by that gov’t) stay in that nation for months if need be until the markets return gains lost and/or other bargain nations open up to travelers in the mean time, otherwise, what are the travel options at present?

    Honestly, this part of that book always seemed a bit volatile to me (the only portion though).

  45. Gino says

    So many questions from various people with a somewhat consistent theme.

    Do I buy, do I sell ? I’m panicking help me!

    JL answers these questions in the Simple Path to Wealth. Or on his blog, The Stock Series.

    If you’ve read the book or the Stock Series then you should know his answer.

    JL doesn’t have a crystal ball!

    In summary, if you need to be in equities, buy VTSAX.

    If you need to be in bonds buy VBTLX.

    If you need both, buy both according to your percentage allocation in each.

    When should you buy? When you have the money, period! Buy each and every time you have money that needs to be invested. For the long term. According to your asset allocation.

    And I’m not talking about money that you need in the short term to pay bills, buy a car or buy a house.

    Do not wait until the markets open to see what’s going on, not when you think they’ll find a vaccine, not when Jim Cramer says to do so, not when the DOW futures are looking positive, INVEST WHEN THE MONEY IS AVAILABLE AND RESIST YOUR URGE TO THINK YOU CAN TIME YOUR PURCHASES.

    You can’t! And don’t confuse your luck with skill!!

    Continue to invest regardless of the mass hysteria. This too shall pass! Like JL has said numerous times, the market trend over the long term is up and to the right!

    For those of you like “Scott” that had money in the market that was needed for more short term goals or in the event he lost his job, that was a huge mistake. And now he’d like to know what to do.

    Tough question for anybody to answer. You sell now and lock in your losses or wait in hopes that the market recovers. Nobody knows!

    Perhaps consider figuring out how else you could earn money so that you don’t have to sell your investments.

    If you happen to have an unstable job or source of income, then you could consider keeping a larger emergency fund to cover a year or two of living expenses. IF YOUR JOB IS THAT UNSTABLE OR SUSCEPTIBLE TO AN ECONOMIC DOWNTURN.

    And if that’s case. DO NOT keep that money in VTSAX. It belongs in a money market or bond fund.

    And for those that are just panic stricken, this most likely means your not as risk tolerant as you thought.

    Everybody says they have a high risk tolerance until a correction or bear comes along and makes these grown ups act like children. KNOW YOURSELF.

    And if you’ve just found out how risk averse you truly are, now is also the worse time to sell.

    And if you’re wondering, should I sell now, or should I wait till the market recovers, nobody knows when it will recover, but it will!

    Stop the hysteria and foolishness. Turn off the news if you need to. Stop looking at your portfolios.

    Remember, this is part of investing in the stock market. We earn higher rates of return by investing in stocks due to the higher risk we take.

    We’re compensated with higher rates of return in stocks because of ugly times like this.

    Now is when you need the intestinal fortitude to not panic! Ignore the noise! This too shall pass!

    I’ve “lost” about $500,000.00 and my only angst is that I can’t get more money to invest!

    Keep your cool. And enjoy the fire sale.

    What other alternatives do we have for growth, than VTSAX, where I can own a piece of almost every corporation for a stingy .04 basis points and have everyone from the CEO to the janitor working for me, like JL says.

    Stop panicking, buckle up and enjoy the roller coaster.

  46. Dawn from UK says

    Amen, Amen and Amen to that.
    Wow Gino, I love you!
    Talk about common sense.
    What an in valuable response that is.
    Talk about hitting the nail on the head.👌

  47. Gino says

    “And, I confess, it is hard to remain patient with those who want the gains, have been told it is a wild and rocky ride to get them, and then panic when it comes.“

    I agree with your feelings up above!

    You laid out a simple path to wealth. A course of action that’s easy to understand and implement.

    Simple concepts. What to do and what not to do.

    But now that the feces hit the rotating oscillator, folks are asking you questions as if you wrote “The Psychic Path to Wealth”. That’s what triggered my response.

    The path couldn’t be simpler to follow. And easy to understand.

    The Simple Path to Wealth, DID NOT lead us down a blind path. You gave us easy to follow and understand directions to become wealthy.

    And now that folks have deviated, they’re looking for another path or the right time to get back “in”.

    The Simple Path To Wealth is a recipe for success with basic ingredients!

    A Total Stock Index and a Total Bond Index. And easy to follow instructions.

    If you’ve strayed off the path, get back on as soon as possible and implement the advice in Jim’s book. Period.

    But before you do, I would urge you to re-read JL’s book and LET THE ADVICE IN HIS BOOK REALLY SINK IN!

    Because the advice is the same whether it’s a pandemic, an act of terrorism or a recession! It doesn’t matter. STAY ON THE PATH.

    If that means getting back in VTSAX after you already sold out in fear, then lick your wounds and get back in.

    PROVIDED that the money NEEDS to be in VTSAX. And you UNDERSTAND selling is NOT AN OPTION, and KNOW your risk tolerance.

    If you don’t get back on the path but instead keep seeking “expert opinions” on what you should do, that’s a red flag!

    Because you’re seeking an answer that agrees with your emotions. And you’re just looking for validation for the actions that took you off the path.

    And I would strongly caution you against investing in VTSAX until you can leave your emotions out of your decision making process.

    LONG TERM means LONG TERM. REGARDLESS OF whatever is happening around the globe or at home!


    Remember this time is not different!

    IT’S NOT!

    The markets are SUPPOSE to go up and down. VTSAX is an incredible wealth building machine over the LONG TERM IF YOU ALLOW IT TO AND STAY OUT OF IT’S WAY.

    Your job is one. And it’s simple. Just keep adding to VTSAX. THAT’S IT.

    Every time you purchase VTSAX think of it like you’re planting a tree.

    After you’ve planted it, it grows SLOWLY over time. Do you uproot the tree every so often to see how it’s doing? Of course not.

    You allow it to grow undisturbed.

    And during the winter, the leaves fall off but the tree doesn’t die!

    You don’t uproot the tree and bring it in the house to protect it from the harsh winter events. You leave it alone.

    Come spring, the leaves come back, the tree grows and it looks healthy again. It flourishes and grows a few more feet.

    This goes on for decades. Until that tree becomes massive.

    And eventually the tree provides you with enough shade to provide you and your family comfort.


    Every time you sell, your pulling the tree up by the roots and killing it, just like your portfolio.

    • Gino says

      Like you said, you can’t please everybody!

      It’s like the saying, “you can lead a horse to water, but you can’t force him to drink”.

      Regarding Andy’s comment, the timing is perfect. Why?

      Because my story, flies in the face of everything Andy said a person like me couldn’t achieve.

      My wife and I, didn’t start with significant wealth, no trust fund, we weren’t born with a silver spoon in our mouth, or started off earning a significant amount of money.

      We came from lower middle class families, I immigrated from Europe. And I don’t have a four year degree, but my wife does.

      I don’t work in Silicon Valley and I don’t have M.D. or CPA after my name.

      But what I do have is a portfolio that some with higher incomes fail to achieve.

      And our portfolio was built on the simple fundamentals from JL’s book!

      No stock broker, no complicated strategies, no market timing newsletters and most importantly TIME IN THE MARKET!

      And a strong DESIRE TO BE WEALTHY, combined with the habits of what it takes to become wealthy.

      A high savings rate that was invested in VTSAX, with minimal to no debt.

      I very recently gave an interview of our story on ESI’s financial blog (Earn Save Invest). I am featured as Millionaire interview 177. And I’ll link it below.

      Our financial accomplishments were a result of taking the “Simple Path to Wealth”.

      We we’re on this path even before I read the book, and when I did read it, JL solidified that we we’re on the right path all along.

      Lastly, before “Andy”and the sort chime in with “but you have a pension”, I’d like to state, that if I did not have a pension or if you do not have a pension, ALL THE MORE REASON TO INVEST IN VTSAX FOR THE LONG TERM GROWTH !!!

      The growth which will allow you a safe withdrawal rate without worrying about running out of money.

      VTSAX OVER THE LONG TERM provides that growth.

      Like I mentioned in the comments of my interview, I STILL INVESTED AS IF WE WEREN’T GOING TO RECEIVE PENSIONS!!!

      I don’t want to rely on anybody or the state to provide for our retirement.

      And that mentality has served us well.

      I hope our story can inspire others to do the same.



      Once you’ve done what JL outlines in his book, contribute as much as you can.


      Stop fretting over daily, weekly, monthly and even yearly gyrations when you won’t need the money for decades!

      As I mentioned before, short term money shouldn’t be in VTSAX anyways.

      It’s simple. Now stop worrying and go spend time doing whatever it is that you enjoy!


  48. Chris (UK) says

    Hey Jim,

    I have an idea for your second book.

    Title – The impossible path to wealth

    Page 1
    Step 1 – When things look great buy as much VTSAX as you can.

    Step 2 – When things look terrible sell all of your stocks and buy every bit of toilet paper you can find.

    Follow these two simple steps and you will get nowhere in no time at all.

    THE END.

    What do you think? Could be a big seller!

    But seriously thank you for all of your content, I’m invested and still buying stocks. I’m not panicking about the future of the stock market and that is because of your advice as well as the similar advice of Mr Money Mustache, Tony Robbins, Peter Mallouk, Jack Bogle and Warren Buffett.

    It seems to me that if a lot of very intelligent and wealthy people give you the same advice you’d be a fool to ignore them, and I don’t plan on being a fool 🙂

    Thanks again and keep up the great work! It seems people will need your advice and reassurance now more than ever.

  49. Clifford says

    When I retired 3 years ago I was 100% stock funds. After much reading on the blogs I decided to go to an AA 50/50 with 20% of stocks funds in international. One year ago I found this blog and liked the idea of one simple stock fund and a fixed fund. So in January I placed all of my stock fund money into the total stock market either in Swhab or Vanguard. For my fixed money I use my deferred comp. stable value fund. so no more international funds for me. I also have decided no more re-balancing. My 50/50 AA was me saying “I won so why keep playing”. But I am also a government retire with a high risk pension. So, with the market taking a crash, it feels good that I have that fixed portion for any emergencies that may come up. Thanks for the simple idea. I can even say one found for the rest of my life. I also have my adult children in one fund in there Roth IRA. Thank You,

    • jlcollinsnh says

      Kudos, Clifford…

      …you are a great example of deciding on your tolerance for volatility and setting your allocation accordingly before the hurricane, when the waters are calm. 🙂

  50. scott says

    I think this time is different. I really do hope I am wrong.

    I’m the Scott that was mentioned in an earlier reply. I guess I want to throw my two cents in here and help clarify some things.

    I think it is wrong to say NEVER SELL when the market is “low.” It really depends on your situation. JL himself started this thread basically admitting that he was selling while it was Low. But it made sense for him in his circumstance. From what I understand, he realized that the money he had invested he might actually need it sooner than later after all and sold – he did not sell just out of panic BUT he DID SELL.

    I think it’s really important to clarify and explain this logic to everyone vs just saying it is always wrong to sell.

    I have always been overly cautious: I have a decent chunk of “emergency” money in cash – probably enough to cover 5 years worth of living expenses if not more. I also have the equivalent amount invested in a TAXABLE market account as VTI as well as a similar amount invested in my i401k. Essentially I split my assets in 1/3s.

    Now this all being said. We are in a SERIOUS life altering situation now where the industry I am in may never recover, and if it does maybe not any time soon, also the city I am in may not be a good place to live etc etc and having a LARGER sum of cash on hand may be beneficial. If its gets really bad I realize money wont matter and we are now in a Cormac McCarthy Novel.

    What I am getting to, is that even though I have been extremely cautious in my planning, there are life altering events that mean sometimes selling when it is low or just getting it out MAKES SENSE.

    JL just did this. I know everyone is patting themselves on the back to feel brave but remember that.

    Did I sell? I sold out 1/3 of my TAXABLE investments last week and thank GOD I did. The market has dropped considerably since then. I am on the fence as to what t do with the rest. I think I have reached a point of comfort and acceptance that I will prob let the rest play out.

    I AM buying however in my i401K until I am 100% invested. if we dont recover within 25 years its over anyways.

    I just think it’s important to emphasize and clarify that it isn’t always wrong or bad to sell. I think this should be discussed more.

    I’m A HUGE fan of JL and his teachings btw.

    – Scott

    • jlcollinsnh says

      Hi Scott…

      Certainly there are times to sell, but it is best to avoid doing so in the midst of a hurricane and certainly not with the idea that you are able to predict where the market is going and then buy back in lower. That’s market timing.

      Your situation is unique and if it put you in the unfortunate position of having to sell now, so be it. But please don’t conflate what you are doing with my moves as described in the post.

      You are taking your chips off the table, I am simply repositioning mine. In fact, as I described in the Q&A portion of the post above, I also recently sold some VBTLX to buy more VTSAX, adding more chips. I am a net buyer.

      Clearly I was too early in that move, but then I don’t have a crystal ball. 😉

      • scott says

        Hi JL,

        Thanks for the reply, and just want to say I am a fan of your work and book and everything else.

        I am just saying it’s important for people to realize that Selling sometimes might be the best move, as it was in your case, as that capital can be better used somewhere else based on your current circumstances.

        I may be wrong but I believe based on the current uncertainty and likely hood of a downward trend you believed it was better to preserve your capital then risk it over the next five years as you re-evaluated your plans and decided you’d like to buy a house. A I wrong?

        I just want to understand for myself and for others.

        Of course investing your emergency fund is never wise but It sound like you also had more than just the emergency fund invested no?

        Not arguing at all, just trying to clarify everything here so I can fully understand the logic as can others. I believe I am in a similar situation to you in regards to taking capital off the table but am just curious to discuss and clarify – since, I mean, what else do we have to do now.

        Once again, A big fan.

        – Scott

        • Dawn from UK says

          Having taken some time to read through all YOUR comments on here, you appear very erratic, emotional and all over the place. I think every investor needs to experience a stock market crash to know their tolerance level. This is my first one and im very calm because I listen to folk with experience and learn from them .
          Use this market crash to really sit down with yourself and ask if stocks are for you. How about a buy to let property , or a basement let, are you good at diy? doing places up?

          • scott says


            I sold VTI at $139 and maintained my principle/capital

            VTI now at $111.

            I gave my self the option to watch the market, OR NOT, with cash on hand as it was very clear which direction the market was going. I also had cash invested that I was looking to grow but also contemplating taking out as cash as well at some point -Same thing JL did. No it’s not different and I can explain in detail why if you want me to.

            I can now use that cash which is 15% or more valuable than VTI and I can use it for whatever I want. I can feed money back into the market if I want. Or I can buy a house If I want. But i’m not STUCK indefinitely waiting for it to go back up just to get my money back.

            But I guess i’m wrong and everyone else is right.

            Yes timing the market is extremely difficult if not impossible. But that doesn’t mean you don’t use any common sense or judgement around your investments.

    • Gino says

      Excellent substitute for VTSAX.

      What’s not to like about ZERO fees.

      Just don’t invest in there more expensive funds. This is a loss leader for Fidelity.

  51. Gino says


    JL stated he sold for personal reasons. He wasn’t selling because he was panicked.

    He saw an opportunity which would result in little to no capital gains. His transaction just happened to happen as a result of world events, which made it an opportune time to sell.

    He didn’t sell just for the sake of selling because he was panicked or thought “this time it is different”.

    Your actions are different. You stated you believe “this time it’s different”. And therein lies the problem.

    You’re selling based on the above emotion and fear.

    Sure, there are reasons to sell. Such as when your NEED, ABILITY OR WILLINGNESS to take risk changes.

    But that SHOULD NOT occur during a bear market. Or in the “middle of the storm” as JL eluded to.

    You sold for the reasons you mentioned. The bear market made you reassess your NEED, ABILITY OR WILLINGNESS to take risk.

    And unfortunately this should’ve been done when the waters were calm not during the storm.

    You panicked and got out because you really believe this time will be different. And THAT IS selling based on emotion and fear to what might or could happen to your income stream.

    Valid reasons. But reasons that should’ve been considered while you were deciding how to allocate your money.

    Actions that should’ve been taken into consideration BEFORE the bottom began to fall out.

    Because, actions you take afterwards based on fear IS market timing. No matter how you justify those actions.

    You just learned an expensive lesson.

    Consider it tuition from the University of Hard Knocks and depending on how much you lost, you graduate with Honors.

    When the market DOES go back up, don’t repeat the same mistake.

    Once you set your asset allocation, rebalance accordingly. If your percentages stray significantly from their set points.

    Jeremy Siegel said “Fear has a greater grasp on human actions than does the impressive weight of historical evidence”

    There will always be “events” that cause people to think “this time will be different”.

    Your betting against the historical evidence, capitalism, and human ingenuity.

    The world is not coming to an end!

  52. Abbey says

    I have been very stressed with the market but still holding (not panic selling) as I’ve read and learned is the best strategy. But I have friends who sold all their equities at Dow 28000 – 29000 and put it all into cash. I don’t understand how they aren’t in a better position than those of us who did not sell and will have to wait (perhaps years) for a recovery. Those who sold now have the opportunity to take their gains and buy low. Help me understand please so I can perhaps feel better about the decision to stay the course.

    • Gerald says

      You’re absolutely right that those who sold at Dow 29000 and are now in cash are in a “better” position now than you. Assuming (and it’s a big assumption) that they actually do buy back in lower, they will profit in the short-term from this crisis.

      However, this is an example of an irrational and dangerous process leading to one good outcome. Almost no one (or perhaps literally no one) can actually predict where the market is going in the next minute, hour, day, week, month, or year. Selling a week ago and getting back in today is like winning at roulette. It’s statistically going to happen for some people, but the process you build by indulging fantasies of being able to “time the market” will ultimately be a loser in the long run.

      In sum, if you have a friend (or friends) that actually are beating the market in the long run by forecasting and acting on future market moves, you know some absolutely extraordinary individuals who are on their way to becoming billionaires.

      Hope this helps!

  53. Andy says

    Still holding tight. Thank you Jack, Mr. Collins and Bogleheads. Holding tight on this roller coaster. My high in January was $833,000 and am now at $655,000. The market is currently down 10% so my new balance will be around $590,000.

    Staying the course!

    Hope to be rewarded for this later.


    • Dawn from UK says

      Your doing the right thing. Nearly All experienced investors made the mistakè of selling out in a bear only to post later after the market rose again, that they made a terrible and costly mistake. You havnt.! Gino said he’s down $500,000
      listen to those with skin in the game.

  54. Gino says

    Exactly Dawn!

    I’m down even more today and I’m undeterred.

    People who are panicking simply overestimated their risk tolerance.

    And now is not the time to sell, unless you want to lock in losses.

    Because if you do sell, you’ll most likely end up sitting on the sidelines thinking you’ll invest when the market stops declining.

    And here’s how the scenario will most likely unfold.

    You go to cash and wait for market to stop dropping. The problem is you don’t know when that will be so you continue to sit in cash. Waiting for the time to strike.

    You might feel confident at some point and buy. Then right after you buy it drops again

    Discouraged, you vow not to repeat that mistake again. Why? Because “you think” you know better.

    After all you’re smart. And you’re listening to all the prognostications on your favorite business channel.

    And they surely can’t be wrong. These are some of the smartest people, and they may help influence when you think you should buy or wait to.

    You CONTINUE sit in cash, and at some point the market begins it climb. And before you know it, you’re now saying, I’ll wait for another dip.

    Why? Because you’re mentally anchored to the price you could’ve paid however many days or weeks ago.

    And before you know it ,the market continues to trend higher and that price point you’re mentally anchored to never materializes!

    Now you can’t justify buying back in because now you think the market is overvalued! Considering you could’ve bought at your mentally anchored price, however many days or weeks ago.

    And that’s the thought process that leads a person down the “Simple Path to Holding Cash and Destroying Wealth”.

    If you made the mistake of taking more risk than you should’ve, now is not the time to sell.

    The fundamentals of JL’s book NEVER change because money you invest in VTSAX must remain invested in both good and bad times, for the long term

    And when we have a bull run again, the same people that are now panicking, will without a doubt in my mind, still take more risk than they should because they’ll have the “fear of missing out”

    The same folks that most likely will sell at a loss now and buy back higher later for fear of missing out.

    Continue to allow your emotions to dictate your investing decisions and be prepared to either work longer or make do with less.

    The choice is yours. The market isn’t risky in the long term, it’s human behavior that makes it so.

    • Andy says

      Dawn and Gino,

      Thanks for this. I’m now down to $582,000 from the high of $833,000. I’m doing OK because I have hope because of past recoveries. The only thing I am frustrated about is that it will take a bit longer to reach FIRE. Oh well, I’ll just need more patience. 🙂

      I will not sell, I promise. Just adding more shares whenever I have cash available that is above my emergency fund.


  55. ET says

    Hey JL,
    I’m a 29F with 80% of my wealth in the stock market and this is my first real bear market. I heard your interview on MadFientist and just wanted to pop in and say that reading your blog has allowed me to have a very calm approach to this market. I’m not worried at all. I know it will come back and I know I can wait until it does in 1/5/10 years. I don’t know that it would be possible without the blog, so thanks!

  56. Dave says

    Another nice post Jim. I had loaned your most excellent book to a friend a while back and it was returned about three weeks ago. I re-read it again just for fun and because I liked it so much. For those that don’t have it yet, read the stock series posts here until your book arrives in the mailbox.
    I have also made a couple of moves to improve my cost basis, kind of similar to what you just did. Probably will soon do a Roth conversion to tack advantage of these low prices.
    Also, Very nice interview with the Mad Fientist today, you can sense the fear in some voices and written words these days. Your effect should be calming.

  57. Dawn from UK says

    Yes, that’s good you point out how it plays out if you sell.

    I recently read somewhere,

    You’ve sold, you bailed out ,now what? your whole financial future hangs on a few clicks of the mouse .😳

    Frightening isn’t

    This is my first bear market. I reached my FI number and I was thinking only a few weeks ago how fabulous my portfolio looked. Im working partime atm
    As it suits me. Ready to live off my portfolio anytime. Although deep down, I was a little concerned as I’d never experienced a bear . I’d been reading AND reading for the past 6 years how to handle a bear ,lots of friends warning me, “what your in the stock market!. Oh no! I lost loads of money doing that, too risky”, they’d warn me.
    But I keep reading Jim collins, MMM ,monevator , and other like minded investors with all their experience, read how they all bailed out in the midst of a bear and lived to regret it. (Didnt read any women bailing out🤔)They were full of remorse and vowed never to do that again and it cost them a ton of money. I thought ,I’m listening and learning from them, ,preparing my self. And here it is and I’m doing just fine. I dont keep looking at my portfolio either. In fact I plan on buying more equities, rebalancing. You really dont know how you feel until it happens. . Someone gloomily warned…. The market giveth and then the market taketh away. But they didnt add, And then the market giveth back again ,EVEN MORE.! I view the market as a bush that grows really big and bushy ,eventually you trim it right back ,cutting off all the green, almost looks dead and barely there. THEN, it grows back, BIGGER and BETTER and more MAGNIFICENT than before. In fact the more you cut it back the better it comes back. Thick ,lush and green . That goes on for a while , then it needs cutting back again for further healthy growth. It’s a cycle. Like the market.
    Nothing, NOTHING, in life is permanent. This virus will come to pass, the world keeps on turning no matter what gets thrown at it.
    Turning and grinding higher.😀
    Stay the course.

    • Gino says


      You’re an INVESTOR and acting like one. 👍

      This mentality will serve you well. You realize you can’t predict the markets next move nor are you interested in trying to do so.

      Thus you know selling isn’t even an option. You hunker down and ride out the storm!

      This liberates you from panicking and the stress of trying to guess when to sell and when to buy back in.

      An exercise in futility, and an almost guaranteed way to sell low and buy high.

      Unfortunately, many will panic and NEED to experience a loss in order to learn from it.

      I suspect a lot of our good advice will fall on deaf ears and that’s human psychology for you.

      We want to sell when we shouldn’t and buy when things look rosy again 🤦‍♂️

      Nobody is perfect and immune to making mistakes. But it’s critical we learn from history and our mistakes, otherwise we’re bound to repeat them again.

    • Samantha says

      I love your analogy, Dawn. It has been really helpful with visualization and allowed me to stay calm amidst all of this chaos. I have just paid down the majority of my student loan debt. At this point, I am not paying more than 3% interest and have a few thousand left. I decided to take advantage of the bear market by maxing out my 2019 & 2020 IRA contributions and invest the funds in VTSAX before paying off the rest of my debt. Did I get the best price per share? Nope! Did I get a fat discount? YES! Big thanks to you and Gino for being the voices of reason here! 🙂

      • Dawn from UK says

        Hi samantha. Glad I’ve been of some help.
        You sound a very sensible woman and I get this feeling your gonna set yourself up very nicely in life financially.
        As a woman I think that particularly important. Freedom and options.
        Women of yesteryear did not have that luxury.

    • Gino says

      The only thing that IS different this time, is the reason for the bear market.

      After this bear goes into hibernation, they’ll eventually be another one! But the REASON will be different.

      And this is the difference between an INVESTOR and a SPECULATOR.

      An investor knows bear markets are part of the risk when you invest in equities, and should be expected!

      They concede they don’t know when the bear will come out of hibernation.

      And when it does arrive, an investor isn’t spooked into selling because they believe “this time IS different”. They are PREPARED to stay the course.

      The speculator believes they can guess the direction of the market and they use emotions to guide their buy and sell decisions.

      An investor CONTROLS the things that are within his control. The EXPENSES on his investments and his SAVINGS RATE.

      Investors have a millionaire mindset.

      In these ugly times they are looking for opportunities not assurance on whether they ought to sell or buy.

      A millionaire invests for the long term.

      They don’t look at what an asset can potentially generate in the short term but what will it be worth 10, 12 or 15 years from now, through appreciation in value and income it can produce.

      Millionaires realize this is an opportunity. This is a good time to put money to work as long as you can keep it invested LONG TERM. Or forever if possible.

      Try to maintain a millionaire mindset during bear and bull markets and CONTINUE to buy assets like VTSAX And not liabilities.

      It will serve you well!

  58. Rick says

    Another way to take advantage of the bear but not timing the market. It’s a good opportunity to do a Roth conversation. You can move more VTSAX shares from your traditional IRA to your Roth IRA for the same tax bite.

  59. Timothy Brinker says

    I didn’t want to rollover my 401k into an IRA due to the fact that I usually do a backdoor Roth conversion every year.

  60. Scott says

    Thanks Gino,

    I’m not worried about money at all anymore. I have enough money (if money will even matter) and I’ve always had a mindset to plan ahead and prepare and be responsible with my money. This is a very different situation and money might not mean anything anymore. And yes. I am very happy I made the right choice and pulled out some of my investments to preserve my capital as times are changing. Just like JL did. Don’t think it’s any different. I wish I’d pulled it all out while I could and avoid losses. But I don’t care anymore because honestly it might not matter anyways.

    We are talking about a global health crisis not the stock market anymore.

    We have a leader who thinks this is an economical crisis 1st and a medical crisis 2nd.


    Couldn’t care less about the stock market anymore. I’m worried about how we are going to live in this situation and how we will live.

  61. Howard lim says

    Sell a mutual or security when taking a lost in a regular account and buy it back on retirement account within 31 days is disallow by IRS wash sale rule.

  62. Arielle says

    Please help me

    I am 29 years old and I don’t have anybody in my life investing or who can help me with investing! Hence I bought your book!

    I have a 401k with Fidelity through a previous employer and I just requested to have a 403b rolled into the account. It is still managed by my previous employer.

    From reading your book, sounds like I should roll everything into an IRA with vanguard and invest in stocks.

    Do I pick a Roth IRA or a traditional IRA?

    I am currently working making about 75k a year and no debt. However I am thinking about making a career change where my income may decrease.

    If you have any time for guidance, I would greatly appreciate it!

  63. Dawn from UK says

    Read Jim’s book and all the articles on this site. You’ll find out eveything you need to know to set you up finacially for life. Wish I at your age had found all thus info then. But internet wasn’t about and personal finance was shrouded in secrecy where only people called financial advisers were your only go to.

  64. L says

    Hi Jim,
    What advice would you give to someone like me who has a bunch of cash sitting in a money market account and want to take advantage of this bear market. I have 2 old 401ks (one at fidelity and one at vanguard) that I never rolled over, 1 old ESOP and 1 brokerage account (tiny) at ETrade no IRAs, emergency fund in cash and extra cash in money market. No debt. Should I convert my old 401k into IRAs and buy VTSAX there? Is the timing ok to do this now? Should I fund my brokerage account with more cash and buy VTSAX there? Any other advice? Thanks!!

  65. Carlos says


    I’m 33 and waiting for my first (and probably only) child to born in July.

    My idea would be to continue earning money all my life (I like working) but I’d like not needing to or to reduce my dedication thus earning less money.

    Another problem I have is that I live in Argentina, in less than six months I was earning something like 3k dollars per month, now I earn half of that thanks to rising inflation and currency devaluation against dollar.

  66. Spencer says

    Mr. Collins, can you please tell me what you think about Vanguard Tax-Managed Capital Appreciation Fund Admiral Shares (VTCLX). Was told it performs like VTSAX and the managers do TLH so I wouldn’t have to (I don’t want to). Any input would be great! Thanks!

  67. LORIE says

    Mr. Collins – We just read your book and we’re ready to move money from our current provider to Vanguard. Now with the market volatility we are wondering if that would be wise to do now? or wait until the market stabilizes? I am afraid that if we transfer the money and it takes a while, we might miss out on some gains. Do you have an opinion for me?

    • jlcollinsnh says

      If you are moving from another investment company to Vanguard, while it maight take the transfer time to happen, when it does there should be little or no delay between getting the money from one fund to the other. So the timing shouldn’t matter.

      But check with Vanguard to be sure.

  68. Gerald Copeland says


    Thanks for sharing your financial expertise I am preparing to retire in 2-4 years I am age 61 and went from 55s 45b after this market setback I am 65s/35b index on both as an attempt to take advantage and recoup. Your thoughts?


  69. Sherrie Rose says

    Hi Jim,

    Just wondering if you have any reservations regarding the government seizing all of our 401(k)s, IRAs, Roth IRAs. It appears that the current political trend is towards socialism and the government taking care of everyone. Especially with the economic stimulus package and other things that are happening around the country due to the pandemic, I am concerned about how things will pan out coming out of this. I personally am in the Wealth Preservation stage and desire to keep my freedom and money. I am wondering if you have any thoughts on this.

    • jlcollinsnh says

      Hi Sherrie…

      While I do share your concerns in general, I don’t expect it to get to the point of the government outright seizing 401k and IRA accounts. And, if it did, they’d likely be seizing your taxable investment accounts as well.

      The only way to protect yourself from this concern would be to hold investments outside the country and to have a second passport/citizenship to another country.

      What is more likely is a continuing tinkering with the plans. For instance, the SECURE act passed in December. https://www.usa.gov/tax-reform

      Note that page highlights pushing back the age for RMDs from 70.5 to 72, giving us an 18 month reprieve:

      “The Further Consolidated Appropriations Act, 2020, was signed into law on December 20, 2019. It includes provisions from two acts:

      “Setting Every Community Up for Retirement Enhancement (SECURE) Act
      This act makes important changes to retirement savings plans. For example, it changes the age at which you must start taking distributions from 70 ½ to 72. ”

      What they don’t highlight is that this law also now requires people inheriting an IRA to withdraw all the money within 10 years rather than over the course of their lifetime.

      The first is a very minor change to our benefit. The second is a major change that will cost our heirs far more in taxes far sooner.

      Seizing assets outright would risk a political firestorm. The bigger and more likely risk is a series of these small grabs they slip into law unnoticed.

      • Sherrie Rose says

        Hi Jim,

        Thank you for your quick response and reassuring words. I was aware of the Secure Act changes that allow me another 18 months before requiring RMDs. I was also aware that inherited IRAs would need to be distributed in 10 years. However, my understanding is that inherited Roth IRAs would not need to be distributed in 10 years. Therefore, I am converting my traditional IRA into Roth as quickly as feasible.

        One item of concern, is the general political landscape of the younger generation. It appears to me that they are becoming more and more socialist. Which I fear will translate into more and more government programs that will, while sounding humane, just, and fair, effectively take away some of our liberties.

        We already see that the very wealthy people are being touted as selfish and greedy. Many politicians are suggesting bills that effectively will redistribute the wealth from the rich to the poor. While these suggestions have not gone far as yet, it seems to me that the general sentiment of the public is in agreement with this idea. Our market society is based on capitalism which rewards people for their efforts and ideas. Those that work, get paid. Lately, those that don’t work get paid. It currently seems that those that cry the loudest, get heard.

        You are an advocate for the capitalistic market. Assuming everything continues as it was prior to the pandemic, we will be fine. However, some things have dramatically changed. It seems we live in unprecedented times. Never before have I seen a time when a landlord could not evict a tenant for non-payment of rent. Never before have I witnessed a time when utility companies were forced to continue service when there is non-payment.

        As stated above, I appreciate your comforting words. I certainly hope that everything continues in incremental changes as you say and Mr. Market stays healthy,

        Again thank you for your reply.

          • Sherrie Rose says

            Of course, you are correct.

            Thanks again! Love your book by the way! I have gifted it to many of my friends and family!

  70. Dawn from UK says

    Hi Sheri rose
    I’m from the UK
    Has your government done this? Seizing your 401 is IRA and Roth IRAs?
    Or are you summizing?
    Surely what your gov is doing as the same as the gov in the UK is doing. Temporary supporting people as they carnt work until the crisis is over.
    Yes, we will all have to pay this money back through taxes I would imagine.
    But once the pandemic is over, businesss open up again and capitalism can restart again. There might be a recession, some businesses will go under but new ones will emerge eventually. Life will go on as before . Why do you think different? This situation is temporary, they will get a vaccine and this virus will be gone forever.

  71. Captain Greg says

    Maybe I’m missing something, but I don’t understand why you’d have to pay 20% long term capital gains tax to begin with. Do you have yearly income of over $400k+? I thought you only had to pay 20% long term capital gains if you made more than that amount. I must be missing something.

  72. Nicholas says

    I have a question about tax loss harvesting. If I sold VTSAX at a loss in my taxable account and used the proceeds to invest in VFIAX in a Roth IRA, Would that trigger a wash sale? Would be a great strategy to use if you haven’t fully funded an IRA this year and didn’t want to cash flow the IRA from income or savings. Thanks!

  73. priya says

    Hi Jim, This is a great time to buy stocks, but should you invest proportionally more in the stocks that fell the most or be cautious since many of those may never recover? I have 30 years to retire, so won’t need the money for a while and was thinking of investing in VIMAX and VSMAX. I already invest in VTSAX based on your advice. So was thinking of the following proportion: VTSAX 50: VIMAX30 : VSMAX20. Thank you!

  74. Patrick says

    First, a great thank you to you and your work. I was able to capitalize on timing the market this winter and thereafter ruined my summer (psychologically) by dancing in and out of it. I am much happier now.

    I do have a tremendous amount of trouble with this post. I recognize the reasoning and I do appreciate it for what it provided you.

    1. It is market timing, and you would seem to be guilty of the very thing you take issue with others doing. While I won’t characterize it as bragging, you would not have posted this topic if it didn’t break your way- or in other words, if you “didn’t get lucky.” Lets say it swung 8% the other way, would your post have been “Taking advantage of an upswing to buy our future home.” So we are left to read about getting lucky by engaging in market timing.
    2. I also have a problem with the sale to avoid paying capital gains, but I fear my reasoning may be too “emotionally based.” And I see it as cutting off your nose to spite your face. I say “emotionally based” because our culture has come to lionize individuals who can avoid taxes while still prospering in a country with depends upon taxes to function. It would seem that you are an extremely generous with both your money and your time, and for that I am appreciative. But to come off of a decade long bull market which thrives in a stable democracy and forgo profit to deprive “the tax man” does not seem appropriate. But I understand it.

    Again, thank you for all of your insights and work. I wish you the best.

  75. khz says

    Thanks for your blog. I have been reading it with great interest and learning a lot.

    I am wondering why you prefer to have VTBLX in a Roth IRA?

    I am trying to decide between this choice or using my Roth as a bucket for tax free growth investments.

    • khz says

      I have just finished re-reading the Stock Series for the second time and some self-correction is in order. I believe NO WHERE does it say to have VTBLX in a Roth IRA.
      Apologies for putting words in your mouth in my previous comment.

      And my sincere thanks for the series. The thought and care that went into it are awe inspiring.

      You have shown me a path forward in an overwhelming time involving an inheritance and first experience with a taxable brokerage account and provided a heads up about RMDs and converting traditional IRAs to Roth to name just a few things.

      And here I always thought the wealth accumulation phase was the hard part.

      My on-going thanks.

  76. Chris says

    Hi Jim,
    I’m following up from our Twitter conversation about possibly
    having you as a guest for our Bogleheads chapter meeting.
    Looking forward to having you on!

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