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You are here: Home / Money / Time to sell?

Time to sell?

by jlcollinsnh 55 Comments

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?

A couple of months 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?

Are they our early warning, the red flag? Is it time to sell and move to the sidelines?

The bearish case seems strong and getting stronger.

  • Traditional measures of stock values, like P/E ratios, seem awfully high and dividend payout percentages seem awfully low.
  • While official inflation rates are reported to be a low 1.7%, you can’t help but notice the sharply rising prices of homes, food, fuel and the like.
  • Interest rates remain stunningly low. But what about when inflation begins to officially rise?
  • The Federal Debt has is skyrocketed to over 28 Trillion Dollars with no end in sight. 
  • The Debt will very likely be over 30 trillion by year’s end. To put that in perspective, five years ago, in 2016, it was under 20 trillion. Ten years ago it was ~14 trillion.

On the other hand…

  • We are beginning to roar out of covid with a huge pent-up demand that should see the economy surge.
  • The Fed Chairman, Jerome Powell, just predicted a growth rate of over 6% for 2021. 
  • All the money the Fed is pumping into the system drives up the price of stocks, as well as all those houses and staples.
  • Owning stock means owning a tangible part of a business. These underlying businesses provide an inflation hedge. 

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?

If and when the crash comes, 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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Addendum: Republic Wireless and our new Samsung Phones.

We just got new Samsung Galaxy S21-5g phones, and bringing them on line has been remarkably smooth and easy. My wife and I love them so far and our millennial daughter, and much heavier phone user, does as well.

We also especially love $25 a month plan with Republic Wireless. Since we’ve joined them in 2013, many other providers have come along to tempt us. But RW feels like the perfect balance between low price and great service. It just works and works very well.

If you think they might work for you click this affiliate link. If you choose to sign up, this blog will earn a commission. For more detail, here are some past posts:

Republic Wireless and my $19 per month phone plan

My new RW Phone

************************************************************************

Books I’ve recently read….



And two I enjoyed rereading…

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Related

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 we 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.
  • Personal Capital 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

Filed Under: Money, Stock Investing Series

« Mariah International: All that glitters…
The Alfred Hitchcock Path to FI »

Comments

  1. James says

    April 13, 2021 at 11:24 am

    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.

    Reply
  2. Richard says

    April 13, 2021 at 12:01 pm

    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,
    Richard

    Reply
    • jlcollinsnh says

      April 13, 2021 at 12:14 pm

      Your feeling is probably right.

      Reply
      • Steve says

        April 13, 2021 at 3:34 pm

        Your perfect reply made me choke on my drink at my desk. 🙂

        Reply
      • Richard says

        April 14, 2021 at 3:32 pm

        Toughen up and let it ride.

        Reply
        • Martha says

          April 15, 2021 at 12:04 pm

          and what did you Richard?
          i have the same dilemma, from January thinking that crash is coming but instead it is going up and missed already 3%….

          Reply
          • James says

            April 16, 2021 at 8:06 am

            Just use the WARM and sleep well

          • Richard says

            April 28, 2021 at 10:51 pm

            I trusted my gut and I put it all into VTI Martha. At the end of the day, for me it’s the price per share in 20 years from now, not today or tomorrow.

    • Greg says

      April 26, 2021 at 5:03 pm

      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.

      Reply
    • jack says

      May 31, 2021 at 4:50 am

      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.

      Reply
      • jack says

        May 31, 2021 at 4:54 am

        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…

        Reply
  3. Ralph says

    April 13, 2021 at 12:09 pm

    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)

    Reply
    • jlcollinsnh says

      April 13, 2021 at 12:13 pm

      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.

      Reply
  4. Scott says

    April 13, 2021 at 12:27 pm

    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.

    Reply
    • jlcollinsnh says

      April 13, 2021 at 12:30 pm

      If ever a time proved the futility of trying to predict Mr. Market, the last 18 months was it.

      Reply
  5. dale says

    April 13, 2021 at 12:41 pm

    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.

    Reply
    • Leonard says

      April 16, 2021 at 8:08 am

      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

      Reply
  6. Life Outside The Maze says

    April 13, 2021 at 1:02 pm

    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. 🙂

    Reply
  7. Accidentally Retired says

    April 13, 2021 at 2:01 pm

    **Applause**

    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***

    Reply
    • vorlic says

      April 14, 2021 at 5:59 am

      “Don’t just do something – stand there!”

      Reply
  8. Laura says

    April 13, 2021 at 2:02 pm

    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.

    Reply
    • jlcollinsnh says

      April 13, 2021 at 7:08 pm

      Don’t feel bad, Laura.

      I did the same in ’87. 😉

      Reply
    • Greg says

      April 26, 2021 at 11:56 pm

      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.

      Reply
  9. Andy says

    April 13, 2021 at 2:24 pm

    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.

    Thanks

    Reply
    • Jack says

      April 13, 2021 at 5:20 pm

      Congrats on the near 25x! The 60/40 seems like a smart move for your situation.

      Reply
  10. Scott says

    April 13, 2021 at 3:00 pm

    JL,

    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?

    Reply
  11. vorlic says

    April 13, 2021 at 3:41 pm

    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.

    Vorlic

    Reply
  12. Tom says

    April 13, 2021 at 4:55 pm

    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..

    Reply
  13. Jim M. says

    April 13, 2021 at 6:20 pm

    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.

    Reply
  14. Linda says

    April 13, 2021 at 6:47 pm

    Thank god for JLC and VTSAX. They have simply been lifesavers and tranquillity.

    Reply
  15. FMT says

    April 13, 2021 at 10:47 pm

    Always wise words, granddad Collins! Very tempting to get more aggressive with your allocation while the times are good.

    Reply
  16. Steve W. says

    April 14, 2021 at 9:56 am

    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.

    Reply
  17. Pablo says

    April 14, 2021 at 11:17 am

    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?

    Reply
    • Steve G. says

      April 29, 2021 at 3:37 pm

      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

      Reply
  18. steveark says

    April 14, 2021 at 7:07 pm

    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.

    Reply
  19. Palm says

    April 14, 2021 at 11:34 pm

    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.

    Reply
  20. George Choy says

    April 15, 2021 at 11:08 am

    “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 😀

    Reply
  21. Greg says

    April 16, 2021 at 8:17 am

    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.

    Reply
  22. Matthew says

    April 17, 2021 at 11:02 am

    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!

    Reply
  23. Jason says

    April 21, 2021 at 9:40 pm

    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?

    Reply
  24. Jeff says

    April 25, 2021 at 3:24 pm

    Another great column. Thank you!

    Reply
  25. Serge says

    April 26, 2021 at 5:55 am

    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.

    Reply
    • Greg says

      April 27, 2021 at 12:02 am

      I feel like I have an inkling of what he’d say:
      https://jlcollinsnh.com/2012/01/02/magic-beans/

      Reply
      • Ellen says

        April 28, 2021 at 12:27 pm

        Bingo, Greg!

        Reply
      • Serge says

        May 5, 2021 at 3:10 am

        I feel like Crypto is not quite Magic Beans but rather might become a new currency and replace old money, so it’s worth considering investing some portion of capital there.

        Reply
  26. OldFogey says

    April 27, 2021 at 10:15 pm

    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?

    Reply
    • Ellen says

      April 28, 2021 at 12:32 pm

      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!

      Reply
  27. George says

    April 28, 2021 at 3:26 pm

    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.

    Reply
  28. LiamAllen says

    May 6, 2021 at 3:37 am

    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.

    Reply
  29. Stephen Francis says

    May 6, 2021 at 1:10 pm

    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!

    Reply
  30. SavyFox says

    May 16, 2021 at 1:46 am

    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.
    Cheers
    SavyFox

    Reply
  31. Mike says

    May 23, 2021 at 3:45 pm

    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?

    Reply
  32. James says

    June 2, 2021 at 10:14 am

    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.

    Reply
  33. waiting4compounding says

    July 11, 2021 at 2:10 am

    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.

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

    Reply
  34. Marianne says

    July 26, 2021 at 9:19 am

    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?

    Reply

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  • ► 2023 (3)
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      • When Your Country Becomes a Global Outcast
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      • A New Chapter for Chautauqua
      • Season's Greetings!!
      • Fun with numbers: Historic Stock Market Returns
    • ► October (1)
      • Let’s talk about what’s up with Bonds, and what ever else you’d like to ask me
    • ► August (1)
      • The Price of Security
    • ► July (1)
      • Case Study #17: Buying into the market right before a Bear
    • ► June (1)
      • Case Study #16: Helping dad with an inheritance
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      • Just inked a contract for my next book, and I want you to be a part of it!
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      • The Dinky Diner
    • ► March (1)
      • Chautauqua: A terrible business model
    • ► February (2)
      • Chautauqua is back for 2022!
      • JLCollinsnh.com Enters New Era
  • ► 2021 (14)
    • ► December (1)
      • Season's Greetings!!
    • ► November (2)
      • The new book is out!
      • Are bonds done?
    • ► October (1)
      • Guess what I just finally read for the first time...
    • ► September (1)
      • The negligence that led me to DIY investing
    • ► August (3)
      • Chainsaws and Credit Cards
      • Part XXXVI: Estate Planning 101 -- The Simple Path to an Estate Plan
      • The Simple Path to a Lucrative Career
    • ► July (1)
      • Help Wanted: a new book
    • ► June (1)
      • The Top 9 (Bad) Arguments Against Bitcoin
    • ► May (2)
      • Collins on Crypto
      • The Alfred Hitchcock Path to FI
    • ► April (1)
      • Time to sell?
    • ► February (1)
      • Mariah International: All that glitters…
  • ► 2020 (11)
    • ► December (1)
      • Season's Greetings!!
    • ► June (1)
      • How to give when you have a business
    • ► April (4)
      • Investing with Vanguard for Europeans: 2020 update
      • Part XVII-B: ETF vs. Mutual Fund -- What's the difference?
      • Reviewing the comments on my post of April 1st
      • Why I will no longer be writing this blog
    • ► March (4)
      • My move from VMMXX to VBTLX
      • COVID-19: The unvarnished truth from Doc G.
      • Chautauqua sits out 2020
      • Taking advantage of Mr. Bear
    • ► February (1)
      • Mr. Bear, Podcasts, a good book and why I should be in 100% stocks
  • ► 2019 (11)
    • ► November (4)
      • How we bought our new car
      • The House Hacking Strategy
      • What does buying a new car really cost over the years?
      • Why we bought a brand new car
    • ► August (1)
      • A Guided Meditation for When the Stock Market Is Dropping
    • ► June (2)
      • 7 Days in Heaven: or Why Slowing Down Will Get You There Sooner
      • Quit Like a Millionaire
    • ► March (1)
      • Stocks -- Part XXXV: Investing for Seven Generations
    • ► February (1)
      • Chautauqua 2019 - UK & Portugal - Tickets Now Available
    • ► January (2)
      • Mr. Bogle passes
      • "I wanted the unreasonable"
  • ► 2018 (16)
    • ► December (1)
      • Happy Holidays! and a bit on Mr. Market
    • ► November (3)
      • Truly Passive Real Estate Investing
      • Car Talk: An update on Steve and looking at Leafs
      • Chautauqua 2018 Greece: A week for the gods!
    • ► October (1)
      • On Twitter, gone for Chautauqua and dark on comments till November
    • ► September (2)
      • What we own and why we own it: 2018
      • Tuft & Needle: Our Walnut Frame and Mint Mattress
    • ► August (1)
      • Kibanda Part 5: Pretty, and pretty much done
    • ► June (3)
      • Stocks--Part XXXIV: How to unload your unwanted stocks and funds
      • Tracking your holdings
      • Stocks -- Part XXXIII: Optimism
    • ► May (2)
      • Kibanda Part 4: Quicksand!
      • My Talk at Google, Playing with FIRE and other Chautauqua connections
    • ► March (1)
      • Stocks -- Part XXXII: Why you should not be in the stock market
    • ► February (1)
      • Chautauqua 2018: Mt. Olympus, Greece
    • ► January (1)
      • An International Portfolio from The Escape Artist
  • ► 2017 (15)
    • ► December (2)
      • The Bond Experiment: Return to VBTLX
      • How to Invest in Bitcoin like Benjamin Graham
    • ► October (1)
      • Kibanda Part 3: Running the numbers
    • ► September (1)
      • Sleeping soundly thru a market crash: The Wasting Asset Retirement Model
    • ► August (2)
      • Stocks -- Part XXXI: Too hot. Too cold. Not pure enough.
      • Kibanda, Part 2: Negotiating the deal
    • ► July (2)
      • Time Machine and the future returns for stocks
      • Kibanda: Mr. Anti-house buys his dream house
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      • Is there an interior designer in the house?
      • The Simple Path to Wealth goes Audio!
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      • Life on the Beach
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      • Sell! Sell!! Sell!!! Sell?
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      • Vicki comes to Chautauqua: United Kingdom
    • ► January (2)
      • Chautauqua - Ecuador 2017 open for reservations
      • Chautauqua - United Kingdom: August 2017
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      • Season's Greetings and other cool stuff
      • Angel Investing, or Angel Philanthropy?
      • Mr. Bogle and me
    • ► November (1)
      • Where did you learn about money?
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      • Buy Your Freedom; Rent the Rest
      • So, what do you drive?
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      • Stocks -- Part XXX: jlcollinsnh vs. Vanguard
      • A visit to the Frugalwoods
    • ► August (1)
      • What the naysayers are missing
    • ► July (1)
      • Reviews of The Simple Path to Wealth; gone for summer
    • ► June (2)
      • The Simple Path to Wealth is now Published!
      • A peek into The Simple Path to Wealth
    • ► May (1)
      • It's better in the wind. Still.
    • ► April (3)
      • Cool things to check out while I'm gone
      • Stocks — Part XXIX: How to save money for college. Or not.
      • Help Wanted: The Book
    • ► March (1)
      • F-You Money: John Goodman v. jlcollinsnh
    • ► February (2)
      • Q&A - V: The Women of Amphissa
      • jlcollinsnh gets a new suit
    • ► January (3)
      • Chautauqua 2015 Reviews, 2016 registration open
      • Case Study #15: The Scavenger Life -- Freedom first, then Financial Independence
      • 3rd Annual (2015) Louis Rukeyser Memorial Market Prediction Contest results, and my forecast for 2016
  • ► 2015 (18)
    • ► December (2)
      • Q&A - IV: Strawberry Patch
      • Seasons Greetings! and other cool stuff
    • ► October (2)
      • Personal Capital; and how to unload your unwanted stocks and funds
      • Stockchoker: A look back at what your investment might have been
    • ► September (2)
      • Case Study #14: To Dream the Impossible Dream (and then realize it)
      • Hotel Living
    • ► August (1)
      • Mr. Market's Wild Ride
    • ► June (4)
      • Gone for Summer, an important note on comments and random cool stuff that caught my eye
      • Around the world with an Aussie Biker
      • Case Study #13: The Power of Flexibility
      • Stocks — Part VIII: The 401(k), 403(b), TSP, IRA & Roth Buckets
    • ► March (2)
      • Stocks -- Part XXVIII: Debt - The Unacceptable Burden
      • Chautauqua October 2015: Times Two!
    • ► February (2)
      • YNAB: Best Place to Work Ever?
      • Case Study #12: Escaping a soul-crushing job before you're 70
    • ► January (3)
      • Case Study #11: John, a small business owner in transition
      • Trish and Stan take an Intrepid Sailing Voyage
      • 2014 Annual Louis Rukeyser Memorial Market Prediction Contest results, and my forecast for 2015
  • ► 2014 (29)
    • ► December (2)
      • Diamonds and Happy Holidays!
      • Micro-Lending with Kiva
    • ► November (3)
      • Chautauqua February 7-14, 2015: Escape from Winter
      • Stocks -- Part XXVII: Why I Don’t Like Dollar Cost Averaging
      • Jack Bogle and the Presidential Medal of Freedom
    • ► October (3)
      • Tuft & Needle: A better path to sleep
      • Nightmare on Wall Street: Will the Blood Bath Continue?
      • Help Wanted
    • ► September (1)
      • Chautauqua 2014: Lightning strikes again!
    • ► August (2)
      • Stocks -- Part XXVI: Pulling the 4%
      • Stocks -- Part XXV: HSAs, more than just a way to pay your medical bills.
    • ► July (3)
      • Stocks -- Part XXIV: RMDs, the ugly surprise at the end of the tax-deferred rainbow
      • Summer travels, writing, reading and other amusements
      • Moto X, my new Republic Wireless Phone
    • ► June (1)
      • Stocks -- Part XXIII: Selecting your asset allocation
    • ► May (1)
      • Stocks -- Part XXII: Stepping away from REITs
    • ► April (3)
      • Q&A III: Vamos
      • Q&A II: Salamat
      • Q&A I: Gaijin Shogun
    • ► March (2)
      • Top 10 posts
      • Cafe No Se
    • ► February (4)
      • Chautauqua 2014 preview, closing up for travel and other random cool things that caught my eye of late.
      • Case Study #10: Should Josiah buy his parents a house?
      • Case Study #9: Lars -- maximizing some good fortune and considering "dollar cost averaging"
      • Case Study #8: Ron's mother - she's doin' all right!
    • ► January (4)
      • roundup: Some random cool things
      • Stocks — Part XXI: Investing with Vanguard for Europeans
      • Case Study #7: What it looks like when everything financial goes wrong
      • 1st Annual Louis Rukeyser Memorial Market Prediction Contest 2013 results, and my forecast for 2014
  • ► 2013 (41)
    • ► December (4)
      • Closing up for the Holidays, see you in 2014
      • Betterment: a simpler path to wealth
      • Case Study 6: Helping an ill and elderly parent
      • Stocks -- Part XX: Early Retirement Withdrawal Strategies and Roth Conversion Ladders from a Mad Fientist
    • ► November (3)
      • Death, Taxes, Estate Plans, Probate and Prob8
      • Case Study #5: Zero to 2.6 million in 25 years
      • Case Study #4: Using the 4% rule and asset allocations.
    • ► October (3)
      • Republic Wireless and my $19 per month phone plan
      • Case Study #3: Let's get Tom to Latin America!
      • The Stock Series gets its own page
    • ► September (2)
      • Case Study #2: Joe -- off to a fast start!
      • Chautauqua 2013: A Week of Dreams
    • ► August (1)
      • Closing up shop plus an opening at Chautauqua, my new podcast, phone, book and other random cool stuff
    • ► July (1)
      • They Will Kill You For Your Shoes!
    • ► June (4)
      • Stocks -- Part VIII-b: Should you avoid your company's 401k?
      • Shilpan's Seven Habits to Live More with Less
      • Stocks -- Part XIX: How to think about money
      • My path for my kid -- the first 10 years
    • ► May (5)
      • Why your house is a terrible investment
      • Stocks — Part XVIII: Investing in a raging bull
      • Dining with the Ghosts of Sarah Bernhardt and Alfons Mucha
      • How we finally got the house sold
      • Stocks — Part XVII: What if you can't buy VTSAX? Or even Vanguard?
    • ► April (4)
      • Greetings from Prague & a computer question
      • Swimming with Tigers, a 2nd chance on the Chautauqua, a financial article gets it wrong and I'm off to Prague
      • Storage, Moving and Movers
      • Homeless, and a bit on the strategy of dollar cost averaging
    • ► March (4)
      • Wild Turkeys, Motorcycles, Dining Room Sets & Greed
      • Roots v. Wings: considering home ownership
      • How about that stock market?!
      • The Blog has New Clothes
    • ► February (5)
      • Meet Mr. Money Mustache, JD Roth, Cheryl Reed & me for a Chautauqua in Ecuador
      • High School Poetry, Carnival, cool ads and random pictures that caught my eye
      • Consignment Shops: Best business model ever?
      • Cafes
      • Stocks -- Part XVI: Index Funds are really just for lazy people, right?
    • ► January (5)
      • Social Security: How secure and when to take it
      • Fighting giraffes, surreal landscapes, dancing with unicorns and restoring a Vanagon
      • My plan for 2013
      • VITA, income taxes and the IRS
      • How to be a stock market guru and get on MSNBC
  • ► 2012 (53)
    • ► December (6)
      • See you next year....until then: The Origin of Life, Life on Other Worlds, Mechanical Graveyards, Great Art, Alternative Lifestyles and Finding Freedom
      • Stocks -- Part XV: Target Retirement Funds, the simplest path to wealth of all
      • Stocks -- Part XIV: Deflation, the ugly escort of Depressions.
      • Stocks Part XIV: Deflation, the ugly escort of Depressions.
      • Stocks -- Part XIII: The 4% rule, withdrawal rates and how much can I spend anyway?
      • How I learned to stop worrying about the Fiscal Cliff and you can too.
    • ► November (2)
      • Rent v. owning: A couple of case studies in Ecuador
      • So, what does a month in Ecuador cost anyway?
    • ► October (4)
      • See you in December....
      • Meet me in Ecuador?
      • The Podcast: You can hear me now.
      • Stocks -- Part XII: Bonds
    • ► September (6)
      • Stocks -- Part XI: International Funds
      • The Smoother Path to Wealth
      • Case Study #I: Putting the Simple Path to Wealth into Action
      • Tales of Bolivia: Calle de las Brujas
      • Stocks -- Part X: What if Vanguard gets Nuked?
      • Travels in South America: It was the best of times....
    • ► August (1)
      • Home again
    • ► June (4)
      • Yellow Fever, closing up shop for the summer and heading to Peru y Bolivia
      • I could not have said it better myself...
      • Stocks -- Part IX: Why I don't like investment advisors
      • Happy Birthday, jlcollinsnh; and thanks for the gift Mr. MM!
    • ► May (6)
      • Stocks -- Part VIII: The 401K, 403b, TSP, IRA & Roth Buckets
      • Mr. Money Mustache
      • The College Conundrum
      • Stocks -- Part VII: Can everyone really retire a millionaire?
      • Stocks -- Part VI: Portfolio ideas to build and keep your wealth
      • Stocks -- Part V: Keeping it simple, considerations and tools
    • ► April (6)
      • Stocks -- Part IV: The Big Ugly Event, Deflation and a bit on Inflation
      • Stocks -- Part III: Most people lose money in the market.
      • Stocks -- Part II: The Market Always Goes Up
      • Stocks -- Part 1: There's a major market crash coming!!!! and Dr. Lo can't save you.
      • You can eat my Vindaloo, mega lottery, Blondie, Noa, Israel Kamakawiwo 'Ole, art, film and a ride on the Space Shuttle
      • Where in the world are you?
    • ► March (7)
      • How I lost money in real estate before it was fashionable, Part V: Sold! and the taxman cometh.
      • How I lost money in real estate before it was fashionable, Part IV: I become a Landlord.
      • How I lost money in real estate before it was fashionable, Part III: The Battle is Joined.
      • How I lost money in real estate before it was fashionable, Part II: The Limits of the Law.
      • How I lost money in real estate before it was fashionable, Part I: Impossibly Naive.
      • You, too, can be conned
      • Armageddon and the value of practical skills
    • ► February (6)
      • Rent v. Owning Your Home, opportunity cost and running some numbers
      • The Casanova Kid, a Shit Knife, a Good Book, Having No Regrets, Dark Matter and a bit of Magic
      • What Poker, Basketball and Mike Whitaker taught me about Luck
      • How to Give like a Billionaire
      • Go ahead, make my day
      • Muk Finds Success in Tahiti
    • ► January (5)
      • Travels with "Esperando un Camino"
      • Beanie Babies, Naked Barbie, American Pickers and Old Coots
      • Selling the House and Adventures in Staging
      • The bashing of Index Funds, Jack Bogle and a Jedi dog trick
      • Magic Beans
  • ► 2011 (22)
    • ► December (1)
      • Dividend Growth Investing
    • ► November (2)
      • The Mummy's head, Particle Physics and "Knocking on Heaven's Door"
      • "It's Better in the Wind" or why I ride a motorcycle
    • ► October (1)
      • Lazy Days and School Days
    • ► July (2)
      • The road to Zanzibar sometimes goes thru Ecuador...
      • Johnny wins the lotto and heads to Paris
    • ► June (16)
      • Chainsaws, Elm Trees and paying for College
      • Stuff I’ve failed at: the early years
      • Snatching Victory from the Jaws of Defeat
      • The. Worst. Used. Car. Ever.
      • Top Ten reasons your future is so bright it hurts my eyes to look at it
      • The Most Dangerous Words Your Customer Can Say
      • How not to drown in The Sea of Assholes
      • What we own and why we own it
      • The Ten Sales Commandments
      • My ever so formal and oh so dry CV
      • How I failed my daughter and a simple path to wealth
      • The Myth of Motivation
      • Why you need F-you money
      • My short attention span
      • Why I can’t pick winning stocks, and you can’t either
      • The Monk and the Minister

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