Time to sell?

Story goes that back in 1929 Joseph Kennedy was getting his shoes shined and the shoeshine boy began offering him stock tips. Kennedy promptly returned to his office and sold all his shares. The market crashed and the cash he was sitting on suddenly became the most valuable thing you could own in the new deflationary age of cheap assets.

More recently…


 The Simple Path to Wealth was the winner of the 2021 March Madness Tournament for the Best Personal Finance Book.

While I am honored by the accolade the fourth runner-up, and a book I happened to be re-reading at the time, is more deserving of the win:

This short, 158 page book by George S. Clason first published in 1926 and then again several times during the depression, is easy to dismiss. The stories, parables really, in it are charming and quick to read. Indeed my only criticism is that too many breeze through it without the needed reflection to absorb its profound lessons.

For example…

The Five Laws of Gold

The First Law

Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.

I wonder how many read that and miss the “not less than” part. In later stories in the book, he more commonly tells of people who “put by” 30%. My own book has occasionally come under attack for suggesting 50%. Maybe Clason was just smarter than I and figured he’d scare off fewer people by easing them in with 10%.

The Second Law

Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

But it is up to you to find that employment for it.

The Third Law

Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.

This might sound like advice to run to a financial advisor. It is not. It means don’t be careless with your money and don’t invest on the tips of your friends. Or your shoeshine boy.

The Fourth Law

Gold slippeth away from the man who invests it in business or purposes with which he is not familiar or which are not approved by those skilled in its keep.

This is why you can find many people who have sworn off the stock market. They invested on a hot tip that seemed to be working for others and lost. They didn’t take the time to understand what the market really is and how it really works before sending their gold to work there.

The Fifth Law

Gold flees the man who would force it to impossible earnings or who followeth the advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investments.

This one seems pretty clear.

One very interesting thing, maybe because I get so many asking about buying gold as an investment, never once does the book suggest holding gold for its own sake.

Today’s FOMO investments

As you read through those five laws of gold, do all those recent “investments” that seem to be making everyone millionaires overnight come to mind? Me too.

And for all those racked with FOMO who have been asking my opinion of them, perhaps even looking for my blessing, I refer you now to these five laws.

But what, you may ask, about those who have become millionaires with these investments? Even if they are few, doesn’t that mean it is possible? Worth a shot?

Gold bars

A couple of years ago, I shared with you my sad tale of Mariah International.  It cost me a cool $50,000, at a time when that was real money.

It was a very tough loss, hard on my wealth and my ego. But it was not the worst possible outcome. In that post I also shared with you this:

“It could have worked. And if it had, I very likely would have myopically seen it as the result of my astute investing prowess and totally missed how much a role luck would have played.

“That last, of course, would have lured me into being even more confident and aggressive on the next one. And that hubris mostly leads to tears.”

Casinos typically pay out upwards of 90% of the bets placed in winnings. Ever wonder why? The obvious answers are…

  • If people walking in saw no one winning, they’d be less likely to play themselves.
  • The house wants people around the roulette wheel and crap table pumped and excited, and those slots showering out coins and flashing lights.
  • It creates excitement and dreams of possibilities. It encourages reckless behavior.
  • That seemingly small 10% or less take makes for huge and sustainable profits.

But the less obvious, and more insidious reason is this:

Those winners will return and, with rare exception, will eventually lose it all back. And then some.

Do these FOMO investments = Kennedy’s shoeshine boy’s tips?

So to answer all those who have asked me in recent months, is this time different? Is this the time to sell and wait it out? To try to time the market and “dance in and out” as Warren Buffett once said (meaning it was the road to losses)? In short:

As I have said from the beginning, the market is unpredictable. Timing it, even when – maybe especially when – what it must do next feels so obvious, is impossible.

I’m tempted to belabor this point, but if you have read this blog and/or The Simple Path to Wealth you’ve already heard it. If you haven’t, I invite you to do so now.

So what should you do?

Now is the time to be absolutely sure you are prepared to do…

Absolutely Nothing

As always dealing with market volatility lies not in timing, but in your Asset Allocation and cash flow. Those depend on whether you are in the Wealth Accumulation or Wealth Preservation stage of your journey.

If you are in the Accumulation Stage and are aggressively adding to your stock investments from the cash flow of your earned income, a market crash is a blessing. Your dollars buy more shares at lower prices.

If you are in the Preservation Stage and living on your investments, your allocation in bonds serves to smooth the ride. During market run ups, as your allocation tips to a greater percentage of stocks, you are rebalancing your allocation by selling those off at high prices to increase your percent of bonds. When stocks plummet, your bonds are your “dry powder” which allow you to pick up those now cheap stocks as you rebalance again.

The market may be crashing as you read this. It might crash next week. Or next month. Or later this year. Or years from now. But as the very first post in my Stock Series is titled…

There is a major market crash coming!!!

And another after that. They are a natural part of the process. No one can predict them. As long as you don’t panic and sell, they don’t matter. But make no mistake, they can be terrifying.

Now is the time to make sure your Asset Allocation is such that you can tolerate the storm. If you wait until the storm is upon us, it is too late. Review and, if you feel the need, adjust now while the seas are calm and then…

Tie yourself to the mast.


What you should not do.

In these times of a seemingly endless rise in the markets, don’t fall prey to the temptation to become more aggressive in your holdings. Stay faithful to the allocation you chose when market crashes might have seemed more likely.

And, when the crash does finally come, don’t panic and sell. Stay the course. Resolve now that, for you, during a market crash:

Selling is not an option.

If you have any doubts about your ability to do this, do not follow my investing path. There is no shame in this, and here is an alternative to consider…

The Wasting Asset Retirement Model


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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


  1. James says

    Wow As usual, a calming voice in the middle of the chaos! Thank you so much for this post Jim. I’m also very glad that you mentioned the The Wasting Asset Retirement Model again. Something I’m strongly considering to be able to sleep well at night, no matter what happens.

  2. Richard says

    Thank you Mr. Collins for the words of wisdom as usual.
    I currently have a lump some of money I was getting ready to invest(into VTI). I’m 29 years old and in the building wealth phase of my life. But things are so high in the market currently, should I just tow it in and keep doing what I’ve been doing- that is investing every extra penny in VTI. Or, hold onto the cash in the case of a crash. I know this is timing the market, but putting this money in now at the highest things have ever been, seems silly. I’m a relatively new investor so maybe these are just the doubts of a rookie.
    I have a feeling of how you may respond, but any help would be greatly appreciated.
    Thanks again,

    • Greg says

      Look at it this way: your choice of whether to invest the money in VTI or keep it in cash is an asset allocation decision. Currently you have X% in VTI and Y% in cash. Does that match with your plan? If not, buy the right amount so that it does. Time horizon matters too. How soon do you expect to need this money? If it’s more than 10-15 years away, don’t worry about it.

    • jack says

      Hi, I guess one way to picture is that today’s money is not important for the future. What you are paying for, which is absolutely certain, is a fixed chunk of good assets – the top 500 US company. By buying it, at any time, you offer yourself an opportunity to hold the best possible asset out there. So every piece of it you own is worthwhile no matter how much the current market says it’s worth. Just never sell them because they are a solid great asset.

      • jack says

        And furthermore, should a crash come, it is actually a great opportunity to buy and lower your average cost. Wish I had done that last March…

  3. Ralph says

    Good post there (as always). One thing to note is you’re mentioning bonds, which I know you like for pretty much this reason. How would rebalancing on the “run-up” (which we don’t really know is happening, so just rebalancing quarterly) work with someone in 100% stocks (as one of your older posts said you ‘should’ be)

    • jlcollinsnh says

      Thanks Ralph!

      I’ll have more to say on the current state of bonds in a future post. This one was getting too long.

      As for 100% stocks, obviously that removes the opportunity to rebalance. Your just have to be prepared to ride out the greater volatility without the ballast and “dry powder” bonds provide.

  4. Scott says

    Great insights Jim, as usual. Imagine you’d had a moment of undeniable clairvoyance last February, and knew the pandemic was going to rocket unemployment to 20% and drop the market to its knees within one short month. You’d have exited the stock market, no doubt… and missed out on the 22% growth over its previous record high just under 14 months ago! So, very ironically, this year of tremendous uncertainty is the year that truly NAILED DOWN for me the wisdom of simply just understanding what stock / bond risk allocation you can live with and let it ride. Sure, if you have some play money on the side and like to gamble, then have at it! (I bought Nvidia at $20 a share in 2015 and sold it at $40 and thought I was so damn smart…it’s $620 today.) Btw, I had my own little 50k investment failure that took since 2013 to just last year to finally collapse into bankruptcy: part ownership in a coffee farm in Colombia. Something I love, but know nothing about actually doing! 🙂 So I can relate to the pain, and to the wisdom gained the hard way.

  5. dale says

    Following the link back to the WARM post, that’s a pretty extreme example of an asset allocation (in a good way), and helpful to see for someone like myself who thinks a lot of allocation theory is more art (small a) than science. Or to put it even less charitably, people seem to largely be following conventions that have a limited basis for their choice, save for being very common distributions (60/40, etc). Why 60/40 is demonstrably preferable to 10% one direction or the other just seems to lack justification … degrees of warm and fuzzy … not that there can’t be a measure that could demonstrate how it HAD made x difference during some backtest example, but then the more rigorous question going forward given the complete unpredictability of market swings.

    • Leonard says

      For some reason, when we mention the WARM model Jim doesn’t reply. I know he doesn’t like that but I know many people following that and, the important thing is, they are happy and feel safe about anything Mr. Market does. I’m following that model as well

  6. Life Outside The Maze says

    Great to see a post from you JL and reassuring that my take on the current conditions and plan seems to match your take pretty closely. You only mentioned it in passing but I love the visual metaphor of your portfolio as a ship that you strengthen and prepare for rough seas while its still calm. Then perhaps tie yourself to the mast to avoid the siren song of NFTs, gamestop, and other such frothiness, from tempting you to steer into the rocks. 🙂

  7. Accidentally Retired says


    Thank you for the sound advice. I think the best thing you can do is visualize the crash and envision your stock portfolio shrinking by 30% or more. Thankfully that shouldn’t be hard to do, since it just happened last year. Run that scenario through your head and make sure that you DO NOTHING.

    **Applauses again***

  8. Laura says

    Thank you Mr.Collins! I’ve been investing steadily for about 2 years, last year’s COVID dip was my first glimpse of a bear market and I did what u said not to do…I panicked and sold. I’m hoping that I can learn from that dumb mistake and be tougher the next time around. Thanks for the reminder.

    • Greg says

      If it’s any consolation, you learned an important lesson early on, when there’s still plenty of time to recover from it. I can’t say next time will feel better, but you’ll know what to do.

  9. Andy says

    Hi Jim,

    Great article. We hit 22x expenses recently with a 100/0 and an 80/20 during the accumulation phase. We decided to go 60/40 since we’re so close to 25x expenses. A big crash that will last a few years to get back to 22x would feel like a kick in the balls. A 60/40 should get us the additional 3x expenses needed for the finish line and if a crash happens, it won’t feel so bad. We’re sleeping well at night with this “wealth preservation” allocation.


  10. Scott says


    I have recently rolled some funds from a taxable brokerage account via Northwestern Mutual to Vanguard and they are high fee growth stock. Would it make sense to sell some/all and buy VTSAX in my Roth account? And if yes, should it be done all at one or incrementally?

    It’s value is about 19k as of today. I can fund both 2020 and 21 in my Roth account. The stock is several years old so the capital gains should be long term. I mainly want to rid myself of all connection to the previous investment but not sure if that’s an emotional decision that doesn’t make logical sense. Any thoughts?

  11. vorlic says

    Hello Mr Collins,

    We’re still here, staying the course, and on plan (after a few recent, necessary adjustments) to absolutely slash our costs.

    Although it sure is a mad world… the words written about this global psychosis have now “filled the Albert Hall”, several times over.

    Stay sane.


  12. Tom says

    thought of the shoeshine story a few weeks ago.. took my family to Disney and had two uber drivers that considered trading stocks their part time job..

  13. Jim M. says

    Thanks JL for the timely reminder to stay the course. I’m 100% equities (index funds) in accumulation phase about 7 years from FI, so girding my loins for the next crash while remembering as long as I dont sell, I will still have the same number of shares and will pick up more at a discount. Always great to hear your thoughts on the events of the day. Cheers!

    Jim M.

  14. Steve W. says

    Dear Mr. Collins,

    Recorded Books’ audiobook of “The Richest Man in Babylon,” narrated by Richard Ferrone, is a delight. Mr. Ferrone has a deep, gravely, almost Biblical voice and sounds like it is coming from the ancient past, in perfect keeping with the tone of the tome. I end up listening to this every few years.

  15. Pablo says

    Hi Jim,

    So, do I use my bond allocation as a cash reserve, and only pull from my bond index funds during a down cycle, or am I pulling my % from both the equity and bond funds when I am no longer in wealth accumulation phase?

    • Steve G. says

      Hi Pablo –
      You should try not to pull from equities when they are down. Ideally, you would withdraw from cash/bonds. If you sell stock when the market is down, you’ve baked in an irretrievable loss. Hope that helps

  16. steveark says

    Good stuff Mr. C. I’m a fossil so I’ve experienced many recessions/crashes/corrections but fortunately I’ve never pulled money out of equities based on market valuation. I’ve seen my portfolio cut in half but I never touched it and sure enough, eventually it all came back and then some. Now I’m not even tempted and just watch the numbers whimsically. But it is also pretty easy to keep my composure now that I’ve arrived at a secure place and don’t have things like jobs, mortgages or kids at home. You are doing a real solid for others by spreading a calm and wise vibe in regards to not making emotional changes in their portfolios.

  17. Palm says

    It seems to me that it is rather time to invest haha. my undertaking on remodeling had a boom in 2018 and 2019 that multiplied my income in good quantities. I think the most relevant activity of my 2020 was investing in HR consulting and creating a company in the British Virgin Islands with a bank account. my friends at Foster Swiss financial advisers helped me with the management and recommended that I take this step. It’s been almost a year now and I’ve seen very good results. It is really worth highlighting that project of my 2020.

  18. George Choy says

    “And, when the crash does finally come, don’t panic and sell. Stay the course”. Very wise words JL.
    We became FI when my wife was 39. We hold some index funds, but most of our monthly cashflow comes from 🏠 property.

    We only buy for cashflow – so when we went through the last 2 crashes in the UK, it didn’t matter to us. We did exactly what you recommended and just held on and waited.

    They are worth significantly more than that now of course, because the long-term trend for both housing and the stock market is upwards. We invest knowing that crashes come in cycles…and when they do, then they are on sale and it’s time to buy more 😀

  19. Greg says

    I’d like to thank you Mr. Colins for that link on the Waste Asset Retirement Model. I’ve read most of your blog and, for some reason, I’ve missed that post. It’s also not on your book.
    That is such a brilliant pragmatic approach to investing/retiring. It eliminates the biggest fear of any person pursuing FIRE. It doesn’t leave you at mercy of the economy.

  20. Matthew says

    FOMO has gotten the best of me at times. I’ve teaching myself how to utilize options to make profit outside of long term EFTs. I have jumped on a few of the trends and meme stocks to make a quick buck off of the high volatility, but sometimes I lose just as quick. The learning curve has been steep, but I have not squandered away my original investment, yet!

  21. Jason says

    Like many, I moved everything from VTSAX to VBTLX due to covid, but in January ’20. Over the next few months, rebalanced back to stocks almost 100%. Made lots of money but makes me ask, does that make me a bad person?

  22. Serge says

    Hey JL, so good to see new posts from you.

    I have a question on a different topic. What do you think about crypto? Is it worth investing some percentage of the assets there? I’m thinking if it’s going to replace the current money, it’s better to jump on that train earlier. Would love to hear your opinion.

  23. OldFogey says

    Mr. Collins,

    I’m 56 and have a retirement portfolio of about $2M. Should I fire my financial advisor and put all new investments into VTSAX going forward? Adding to the complexity is that April 2021 may be a bad time to enter this index as my gut tells me we are in for a correction soon. Am I too old to take this risk, with insufficient time on my side?

    • Ellen says

      Dig deep, “OldFogey”! Only you may arrive at a comfortable answer for yourself! As Mr. Collins has oftentimes reminded us, in essence, to be cognizant of Markets’ history! I might add, not merely the past 30 years but more on the order of the past hundred-+-or-so years!

  24. George says

    in the US that is. If US loses the #1 stamp for China as all things suggests, then it might look like Japan’s stock market in the future.

  25. LiamAllen says

    Great article as always. What really caught my attention is the line about the shoe shine boy. I was in Target just two days ago and overheard two of the people stocking shelves talking about their crypto Investments. I know that doesn’t really relate to the stock market, but I couldn’t help think “yep that is definitely going to crash soon”. 100% VTI for me, I have full faith that the market will recover from any crash eventually.

  26. Stephen Francis says

    I agree entirely about The Richest Man in Babylon, a great book to take time to digest and really understand. I gave many copies to my clients, particularly for their kids to read. Having re-read it a few times, there are some areas that need improving in my opinion. I am, very slowly, writing a book myself to revisit many of the areas covered and address some of its shortcomings (or at least try). The working title is “The Rich Venetian”, another rags to riches story set in the past. Again, an emerging economy where everyday people could succeed. I’ll let you know if I ever get it finished!

  27. SavyFox says

    Enjoyed your article, JL. Market timing has always been very costly for me, just Buying pieces of businesses I have confidence in (with regard to management, financials, growth prospects etc.) and Holding them through thick an thin is an approach which has proven to be very successful for me. I try to always be prepared for markets to come down (e.g. having my watchlist and always cash prepared) and buy then stocks when they get more attractive.
    It really is a marathon and not a sprint.

  28. Mike says

    Hey JL,

    After reading your stock series and book I think I am now ready to invest into VTSAX, but I see it is on the downward trend. What gives? Should I still invest right now?

  29. James says

    Hi JL,

    I just read your book, went through it super quick, thank you for the great insight. I am very fortunate to have just received a large sum of a money from a company sale that I was an equity partner in. I stashed it all in a variety of mutual funds BEFOFE I read your book HAHA and now I’m considering moving it all to VTSAX (or the Fidelity equivalent). My question is…do I wait 1 year to reduce capital gains or just bite the bullet now? I literally did this 2-3 weeks ago.

  30. waiting4compounding says

    Dear JLCollinsnh,

    Huge fan of yours, sir. Plain THANK YOU for everything you do.
    Wish we had more such authentic voices out there in others fields like yours.

    BTW, +1 to your book recommendations. I am adding the fiction ones to my reading list. Hope you continue to share your recent worthy reads here.

    One mid-30’s Millennial on his journey to “FI”

  31. Marianne says

    Hi, it’s not a good time to sell but what about to buy? I have cash in a SIPP that I’m scared to convert into Vanguard tracker funds in case of the predicted crash. Any thoughts?

  32. Jameson says

    So in summary: [it’s always a good time to buy].
    It seems like people don’t need money to live and they should all die as billionaires. You gotta stop and start selling at some point and enjoy life before it’s too late.

    People think they will live into their 90’s? Of course not, the 50th percentile is 79 yrs old. About 50% will die before their 78 yrs old !

  33. Dan says

    JL provides sage advice.

    The challenge today is bonds, especially bond funds, did little to help investors. SVB showed the duration risk we all had exposure to, if you had not been paying attention. The Feds easy money, watch the recent FrontLine on this topic, have set off a great battle between the forces of inflation and deflation. This battle wreaks a lot of the assumptions that have been built into the financial system since the GFC.

    I have been a believer in buy and hold and index funds. I still have large holdings. I have become a believer that the current environment demands more active investment strategies, not just for alpha but to avoid market risk. I think it’s prudent to not put all your eggs in any one basket, even one that I believed in as much as buy and hold index fund strategies. I do believe the strategies time will come again, but meantime it could be an up and down road to nowhere this decade. I think this is a time to do something, or at least consider alternate strategies that can take advantage of the gyrations of this epic inflation deflation battle.

    • Jack says

      Dan, you open by stating that JL provides sage advice, but then immediately follow by essentially saying that the Simple Path is no longer the right path, at least not for the rest of this decade. With all due respect, this violates the central theme of JL’s sage advice.

  34. Lindsay says

    What about those of us just getting started? I have all my money in high yield savings. (4%) and I’d love to start investing again bc I’m just out of my 2nd mid career retirement, I’m 47, and have newly earned money to invest. But buying now seems crazy unless I’m going to actually buy gold. I would love to hear what you think.

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