Should You Change Your Investment Strategy?

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Investors love to talk about their winners, but you rarely if ever hear about their bad decisions. This selective memory is true across all levels of investors, from people you and I may meet at a dinner party to the most prestigious venture capital funds in the world.

Looking in rearview mirror

I’m going to go against the grain. A few years ago, I made some changes to our portfolio. I reviewed the outcomes of changes I made to our personal investments.

I’ll share the good, the bad, and the ongoing challenges these portfolio changes create moving forward….

Creating and Changing a Personal Investment Policy Statement

I encourage all investors to create a personal investing policy statement and I’ve created a PDF to help you do so. The purpose is to have a well reasoned written plan to which you can refer. This can prevent emotional decisions when you are not calm and thinking clearly.

But no plan is perfect. We change and the circumstances around us change.

This was where we found ourselves in 2020.

Timeless Principals vs. Timing the Market

We were faced with a dilemma. Our written investment plan called for us to be long-term buy and hold investors in stock and bond index funds with an allocation of approximately one year of living expenses in cash.

The pandemic downturn made us realize we were exposed to more stock market volatility than we were comfortable with. We felt lucky to have a “do-over” when the stock market rebounded quickly. We wanted to decrease our portfolio’s volatility, ideally without sacrificing too much return.

However, we didn’t know where to put money if we took it from our stock allocation. Our previously outlined plan called for us to put more money in bonds over time to decrease volatility and preserve capital. 

We failed to do so at the end of 2019. Due to the poor-risk reward profile of bonds with interest rates near all time lows, adding more bonds made little sense. During the pandemic, rates were cut even further. At that point, bonds made no sense.

Related: Retiring With Extreme Low Interest Rates

We could increase our allocation to cash. However, with a long time horizon and with extreme low interest rates, we knew getting too conservative held its own risks. There were risks that our money’s purchasing power would be eroded by inflation.

Fear and greed lead to many investment mistakes. The past two years seem to have been a real time case study of greed. We were not caught up in that FOMO crowd chasing ever larger returns…. but were we allowing fear to dominate?

I decided to start looking at investments that were not in our current asset allocation and investment policy statement.

Being Right Once….

If I can set aside humility for a second, I have to say I nailed it by seeing how risky bonds had become. Allan Roth recently published a piece in Barron’s explaining that By One Measure, 2022 Bond Crash Is Worse Than Stocks During The Great Depression.

Roth writes that 2022 aggregate bond returns compared to expected returns are “5.5 standard deviations, which should happen once every 50 million years.” To again find my humility, I must admit I had no idea interest rates would rise this much this fast or that returns would be as bad as they’ve been.

However, I do know the basic fundamental reasons we initially chose to include bonds in our portfolio, and two of three of these fundamentals no longer were true in mid-2020. I also know the fundamentals of the relationship between interest rates and bond values.

So I had strong conviction and solid reasoning to not want to add more bonds to our portfolio, and was even considering decreasing our bond allocation at that time.

…. Isn’t Necessarily Enough

However, here lies the real challenge in any investing strategy that involves straying away from a defined plan and formula. Even if you are right one time, that’s not enough.

You have to be able to determine what is going to happen. You also have to determine when it will happen. And you have to be right AT LEAST twice, knowing if and when to get out of an investment, and then if and when to get back in.

I looked back at the blog. I was writing about altering our portfolio in May and June of 2020. Shortly after, I started to make some changes.

I’ll analyze changes I made compared to the status quo. I also need to consider an uncertain path forward from today. I obtained pricing data used in my analysis from

The Status Quo

Our status quo portfolio consisted of 75% stocks, 20% bonds, and 5% cash.

I will use the Vanguard total stock market index (VTSAX) as a proxy to the stock portion of our portfolio. The first change I made was shifting 5% of our portfolio away from stocks to a new asset class, gold, starting in July 2020.

The bond portion of our portfolio was split evenly, 50% allocated to a total bond market index fund and 50% to intermediate term TIPS. I’ll use Vanguard’s Total Bond Market Index Fund (VBTLX) and Vanguard’s Inflation Protected Securities Fund (VAIPX) to assess bond performance.

I also elected to purchase the maximum allowable amount, $10,000 each of I Bonds for my wife and I over the past two years. This replaced an equivalent amount that would have been allotted to our original bond investments when rebalancing.

Cash is held in a high yield savings account. We did not change this allocation.


Stocks have had a rough 2022. The price of VTSAX shares has dropped from a high of $118.25 on January 3 to $96.51 as of November 15th, 2022, a decrease of 22.5% (not accounting for dividends paid).

This represents a typical bear market in stocks and is the reason we wanted to shift some our portfolio away from them. However, this also represents cherry picking the worst data since stocks reached an all-time high at the beginning of the year.

I looked back to July 1, 2020, when we decided to change our portfolio. VTSAX shares were trading at $76.61. Had I simply stayed the course, despite stocks’ poor performance in 2022, I would have seen my investment increase by nearly 26% over the past two plus years through November 15th.

I was right that stocks were at risk of a significant drop. I was wrong by eighteen months and $42 about when and from what price point that drop would occur. In the interim, they went up significantly. I would have been better off staying put.

I shifted 5% of our portfolio out of stocks. On a hypothetical $1 million portfolio that is $50,000. Had I stayed put, I would have been up about $13,000 without dividends. With dividends, the total return would have been closer to $15,000.


Bonds have had a similarly rough 2022. The simultaneous decrease in stocks and bonds was the exact scenario I was worried about and the reason I didn’t want to put more money into bonds.

VBTLX started the year at $11.19 per share and dropped to $9.39 per share as of November 15th. This is a decrease of 16% (not accounting for interest paid). This drop coincided with the rapid rise in interest rates this year.

Looking back to when I initially made my decision to change our portfolio, VBTLX shares were trading for $11.61 on July 1, 2020. From this price point, VBTLX prices have dropped 19%. However, getting out of bonds would mean giving up interest payments produced in the interim. Factoring those payments in, VBTLX is down closer to 15%.

VAIPX, a fund of treasury inflation protected securities, have followed a similar trajectory to other bonds despite recent high inflation. From the beginning of the year, through November 15th, VAIPX share prices have dropped 16%. From July 1, 2020 their price has dropped about 13% before factoring in interest paid.


High yield savings account rates were under .5% in 2020. They’ve gradually risen since. Ally, a popular online bank, is advertising a 2.75% rate at the time of this writing.

The benefit of having money in cash in an FDIC insured bank account is that you will never lose any nominal value. The risk, which has been highlighted recently, is that the actual purchasing power of your cash will be eroded by inflation over time. 

This year, having this asset that has at least maintained its nominal value while starting to produce a little bit of interest income has been a valuable piece of a portfolio in comparison to other assets that have lost substantial value.

However, we must again remember that over time money held in cash is losing purchasing power. While cash looks pretty appealing this year, if we would have gone to cash in July 2020, we would have missed out on substantial price appreciation and dividend payments stocks have produced.

The Changes

I decided to make two changes to our portfolio. In summer 2020 I decreased our stock allocation by 5%, shifting the proceeds to a gold ETF (IAU). One year later, I began shifting a portion of our bond portfolio into I Bonds. 

The motivation for these moves was to address the potential risk that both stocks and bonds would perform poorly at the same time and not provide the diversification benefit we’ve become accustomed to. I felt this was a strong possibility due to market and interest rate conditions at that time. 

That is exactly what happened this year. But that only matters if the alternatives did better. Let’s take a look.


As I looked at alternatives to those already in my portfolio, I was hoping to find something not correlated to stocks and bonds. Gold has an interesting profile. Over the long term, it is very volatile, provides no income, and little to no growth in value above inflation. Not a great investment!

Yet in small doses, it significantly increases portfolio returns and decreases portfolio volatility in backtested portfolios. This is due to the benefits of rebalancing this asset that has low correlation with stocks and bonds, particularly in periods when stocks and bonds are both doing poorly.

I decided to take 5% of our stock allocation and shift it to an allocation to gold. At the time I reported this decision, several readers commented that adding some gold was smart, but 5% of a portfolio wasn’t enough to make a difference.

Related: Going for Gold

I didn’t have a lot of conviction in holding any gold. So I chose a small enough allocation that I was confident I would stick with it as a long term holding despite my lack of conviction, but a large enough position that it could make some difference in portfolio performance based on my backtesting.

This year, both stocks and bonds have done poorly. So how has gold done?

Gold is down 3% year-to-date as of November 15th. Looking back to when I made the decision to add it to our portfolio, gold is essentially the same price as it was in 2020, but with considerable volatility, no income produced, and nontrivial holding costs incurred along the way.


As I was doing my research on gold, I read compelling arguments that gold may not perform as it has in the past. There was an argument that Bitcoin would assume that role, functioning as a “digital gold.” 

These arguments led me to give serious consideration to adding Bitcoin to our portfolio. I decided not to do so for two reasons. 

I realized that part of the allure of Bitcoin was that it had much more potential for price appreciation than gold. But as I reflected, the reason I was looking to make changes was to be more defensive. Bitcoin also had much more potential to go to zero than gold. In a worst case scenario gold has value for jewelry and industrial uses.

Second, I was concerned about storing Bitcoin securely. Storing it on a hard drive where it was at risk of fire, theft, loss of passwords, etc. was unappealing. The exchanges didn’t seem mature and thus secure. This further increased the risk that my investment in Bitcoin could go to zero, even if Bitcoin itself continued to have value.

It is interesting to also compare this change that I didn’t make to our portfolio, but seriously considered.

As disappointing as gold has been during this time of poor stock and bond performance, there is no comparison to Bitcoin. Year-to-date, Bitcoin is down a whopping 65% as of November 15th.

Interestingly though, looking back to July 2020 when we were altering our portfolio it gives a different picture. Bitcoin was then selling for $9,134. It peaked last November at $64,400. 

Even after losing 75% of its value from its peak price, Bitcoin is still up 81% from its July 2020 price.

I Bonds

The other change to our portfolio was to add I Bonds. In 2021, I compared I Bonds to TIPS. Shortly thereafter, I began buying the maximum allowable allotment ($10,000/person/year) for Kim and I.

Unlike adding gold, I Bonds were not a great departure from our previous holdings. I Bonds function similarly to TIPS. 

However, due to the extreme interest rate environment at that time, I Bonds were starting with a higher fixed rate (0% for I Bonds vs. negative rates for TIPS). I Bonds also don’t have any interest rate risk if rates go up, while TIPS do (see TIPS poor 2022 performance despite very high inflation as reported above.)

Unlike adding gold, I bought the I Bonds with great conviction. I purchased our maximum allowable allotment of I Bonds in 2021 ($20,000) and then did the same again in January 2022.

Despite the rise in interest rates that hurt other bonds, non-marketable I Bonds have lost no value. Due to high inflation, our I Bonds have increased in value by over 10% while our other bonds are down by over 10%.

However, due to the purchase limits on I Bonds, the net effect is only a couple thousand dollars difference. Nice, but not life changing. And not enough to make up for the lost return attributed to buying gold.

Moving Forward

I spent time and mental energy analyzing and altering our portfolio. My thesis that bonds and stocks were likely to both lose significant value simultaneously was correct. Still, the results were not impressive.

I would have been significantly better off through this point just sticking with my stock allocation and never having added gold. Now I have to decide if my thesis that gold would do well when everything else does poorly was wrong. Or am I judging too quickly and at risk of giving up on gold at exactly the wrong time?

Bitcoin returns have far outpaced the stocks I sold off and the gold I replaced them with. However, it has been an incredibly volatile ride. Bitcoin has been highly correlated to stocks and bonds this year, when I wanted something uncorrelated. And all of the reasons I didn’t allocate to Bitcoin in the first point are even more prescient today.

On the bond side, I was absolutely right at the time. But conditions have changed.

I Bonds with a 0% fixed interest rate don’t look as promising as TIPS which now have positive yields. The flip side of no interest rate risk that was so attractive when rates were so low is that I Bonds have no potential for price appreciation if rates drop, again a possibility.

I Bonds also require holding them for at least one year before redeeming them. You also surrender the last three month’s interest if redeeming them after a year, but before a five year holding period is met. So the I Bond gains I have on paper would be reduced for the bonds bought in 2021. I can’t yet sell the 2022 bonds.

Take Home

By straying from a simple buy and hold strategy I underperformed the status quo and created more decisions going forward.

At the recent Bogleheads conference, I heard the well known John Bogle investing mantra that flies in the face of advice that you hear in almost every other aspect of life. “Don’t do something, just stand there.”

In investing, doing nothing is often the hardest thing to do. Yet it is also the best decision more often than not. The time and mental energy can better be allocated elsewhere.

If you are going to do something, it is wise to take your time and make small incremental movements. It can give the feeling of doing something, without actually doing anything that causes substantial harm.

Allocating 5-10% of a portfolio to underperforming speculative investments can be a drag over time. But it is a lot better than going to extremes. Ask the fearful investor who sold out of stocks in 2009 and is still waiting to “get back in” or the greedy investor who went all in on the wrong tech stocks or cryptocurrency in late 2021 and got wiped out.

Finally, be careful to judge your successes and failures accurately. 

Don’t beat yourself up too badly if you get these decisions wrong. Learn from your mistakes. Investing is hard.

More importantly, don’t get too full of yourself if things turn out well. Sometimes you just get lucky. Investing is hard.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to Financial planning inquiries can be sent to]

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  1. Good article. As a retiree I favor dividend producing stocks/ETFs. Gold is not in my portfolio; no income and questionable total return. Have recently added preferreds for the income and potential appreciation. Still have some bond funds and STIP (inflation protected); but very disappointed in the 4 and 5 star bond funds (DODIX, USAIX, WATFX) recommended by my broker. Selling covered calls and cash secured puts for income. This has been a tough market.

  2. Chris, your experience seems to validate that well-worn phrase:”portfolio is like a bar of soap, the more it’s handled the smaller it gets.”

  3. Enjoyed your honesty in this article. Just wondering why you do not invest in some of the better REITS? I have O-Realty Income & the shares have gone down but the monthly dividend has not.
    Since I am already retired , maybe my goals are different from yours.

    1. I may have given the implication that my stock allocation is only VTSAX because I didn’t want to overcomplicate the message of this post. So I used VTSAX as a proxy for my stock allocation. VTSAX is my largest position, but I also overweight my portfolio to domestic small cap value and REITS and also hold international stocks.

      I share my full portfolio here:


  4. Suspect many of us have made same mistakes re bond funds.
    Also shifted quite a bit from Vanguard money market into bonds.
    Now wondering if bonds have been beaten down enough to start buying.
    Thanks for sharing!

    1. This is always the problem when strategically changing allocation. Even if you chose a good time to get out, you still have to choose the right time to get back in. How much higher will interest rates go and when will they stop rising? Your guess is as good as mine!


  5. Thanks for another example of the value of creating a personal investment policy, implementing it with a few broad based index funds and then simply spend your time enjoying life. The search for “better” is the enemy of what works to provide a good life. A 5% position is nothing but a nuisance. I disagree that investing is hard, what is hard is the discipline to stick to an effective plan.

    1. “Sticking to an effective plan” = the behavioral aspect of investing. If you find the psychology of money to be easy, then I tip my hat to you.

      Scroll through these comments. Your sentiments are not representative. And remember, that people in this audience are already a minority of the general population that has some financial literacy. Behavioral finance is incredibly hard for the average person.


  6. Chris-

    Thanks very much for sharing the details of your personal experience. This is how we learn. Well done!

    I also made some changes during Covid (2020-2022), mostly on the greed side. My results have been that I’ve broken even (up then down). I was right once and tried for a repeat; I overestimated my capability. But, as I’ve watched my profits from the “up” phase disappear, I’ve remembered and returned to my IPS. Now, I’m “just standing here.”

  7. I know that I speak for many readers of your blog Chris when I thank you for unflinchingly sharing your thought process and choices. And I have to say, your few missteps pale by comparison to more major ones I’ve made over the years.

    You referenced Allan Roth and his recent decision to go all-in on a 30 year TIPS ladder has spurred perhaps the most interesting and high-level discussion on the Bogleheads forum (in terms of participants, with Mr. Roth himself, Bill Bernstein, bond expert Vineviz and other luminaries going at it) I’ve seen in a couple of decades of following things over there:

    Roth points to one fork in the road – the same one Bernstein, Wade Pfau, Zvi Bodie and for that matter DFA advocate: funding one’s essential expenses with a liability-matching portfolio using duration-matched TIPS and putting the rest in equities for growth.

    If I were an early retiree with a proven ability to roll with wild market volatility like yourself I think I’d be more inclined to go the Jonathan Clements route: 60-70% in globally-diversified equities (VT) and the rest in a barbell of short-term nominal Treasuries and TIPs (he uses VGSH and VTIP). That’s a true minimalist’s set-it-and-forget-it approach – albeit one for an investor with the nerves of steel required to stay the course during a prolonged 40-50% stock market swoon.

    A last comment about gold is that it has actually done a lot better than it might appear this year, as the outsized strength of the U.S. dollar has driven its seemingly poor returns far more than anything else. And the Bogleheads disdain for the stuff is flat-out irrational, given that any number of portfolios that include it (see the Portfolio Charts site) have risk-adjusted returns that trounce the 3 Fund and other BH favorites. That said, I was among those who suggested that 5% isn’t enough to help a portfolio but is enough to be a drag. As ERN over at Early Retirement Now showed, 15% is the minimum amount of it to guard against sequence-of-returns risk and act as a hedge against further currency debasement/money printing by the Fed. But my sense is you have the same sort of visceral dislike for it as you do for crypto so why bother?

    Congratulations on your CFP certification and thanks very much for your work!

    1. Thanks for the thoughtful comment as usual Kevin and for the encouragement. I don’t know that I have a “visceral dislike” of gold or crypto. I just don’t like the idea of holding anything that is purely speculative, with no income and no way to objectively value.

      I recognize that it is much more important to select an allocation that you will stick with than to try to find the “perfect” allocation which is unknowable until after the fact. So I don’t see me adding Bitcoin or taking on a larger position in gold. The question is whether I should chalk this up to learning and abandon the small position to gold that I have, or to stick with it and rebalance into and out of it for the long haul which was my intention when adding it. For the record, I’m leaning towards the latter, but I honestly don’t know.


    1. At 67. With CD rates at 4% I’m thinking about moving my entire portfolio into a safe haven. With a possible recession looming why not?

      1. Maybe because the likelihood of a recession is already priced into the stock market? And maybe because if a recession happened and the Fed stopped raising rates, bond values would go up?

        There’s always a risk of being “all in” on any asset, even cash.

        1. Michael,

          These are my thoughts exactly and was kind of the point of the piece. We just can’t know the future.

          If we continue to have high inflation, cash or cash like assets are not a good long term solution even though they look pretty good right now in the short term compared to everything else.


  8. Wow! Thank you for this! I’ve left our investments where they were at the beginning of the year (mostly VTI and some cash), but have really worried I should be doing something different. This makes me feel better about sitting tight and resisting the urge to make changes. After getting out of the market in 2008, before the crash, but being too afraid to get back in when I should have, I’ve tried to learn from that lesson.

    1. Thanks for the feedback Loryn.

      I agree that all that any of us can do is learn from our mistakes, which is why we are honest and open about them.


  9. I’m sorry, but your portfolio decision-making process seems to be rather haphazard and myopic. One two-year period is really not any basis to draw any conclusions from. Nor is using today’s “snapshot” a good process either. What you did in 2020 and are doing right now are not good processes, because they are based on guessing and feeling.

    If you are planning for a decades-long retirement (as opposed to a two-year snapshot), the better process is going to be to actually backtest these ideas over decades using free tools like you can find at portfoliovisualizer, portfoliocharts and early retirement now, and incorporating the work of Paul Merriman in the past decade. What is notable about these tools and information is that they were not available to DIY investors 10-15 years ago when the mantras about VTSAX and total bond funds were written. We have better knowledge today about portfolio construction if we choose to embrace it and stop “guessing” about the future or relying on what were best practices in 2011 but no longer stand up to critical analysis using those tools and information. Consider this the equivalent of upgrading from a Blackberry to a smart phone. You may have liked that hard keyboard, but its obsolete.

    You will find that using basic ideas like adding value-tilted stocks will go a long way to improving your results (which has proven starkly true this year and much of the past 100 years — basic value index funds are down 10% less than total market funds on average this year). As for gold, read SWR post #34 at early retirement now and consider the 50 and 100-year histories as opposed to a recent 2-year experience that is atypical for many reasons that are unlikely to continue.

    1. Frank,

      Re: your entire first paragraph. I agree. That was the whole point of the post. I try to share with as much transparency as possible to help other people think through these decisions and appreciate the complexity involved in them. I don’t share what I’m doing as being prescriptive to anyone else.

      I’ve written a whole post about monitoring your portfolio. I explicitly state that I actually don’t typically monitor my returns, as I think it can be tempting to over-extrapolate your short term success or failure as more important than what they are.

      Re: the remainder of your comment. See my comment above. I may have been a bit careless in not sharing more of the backstory of my decision. But it is shared in the posts linked, most notably this one where I used one of the resources you mention: and this one where I lay out my investment policy:

      While I agree with much of what you write, I think it overlooks two important points.

      I agree that knowing market history is important. But history is just that. It is not a guarantee of how the future will play out. As one example, we’re coming off a four decade run of falling interest rates. No one knows where rates go from here, but if they continue to go up then the next decade(s?) could look much different. All the back-testing in the world is not a crystal ball telling what the future holds.

      Also, you have to believe in your plan. I am aware of the permanent portfolio, Golden Butterfly, etc. However, I don’t personally feel comfortable with these plans that hold larger allocations to gold, bonds, and in some cases commodities than I feel comfortable with. So even if the past is an accurate predictor of the future, that is irrelevant if I have a plan I won’t stick with because I haven’t fully bought into it. So to ignore behavior is a big mistake IMHO.


  10. In retirement necessary income needs should IMO be covered by inflation protected guaranteed income paper. Only after the necessary is covered should the retiree consider any market investments that may involve loss.
    There is the obvious – After you retire (and give up yourself as an income source) you want to ensure future income regardless of the market behavior.
    There is also something that many people fail to consider – you might lose faculties. This could make you a ripe target for scam artists.
    In planning any future you should be sure that sufficient income is well shielded from scams. Social Security and Annuities are essentially immune as the best that the scammer can do is get one months benefits. Investing in government bonds,while not scam proof, does guarantee returns unlike the market, gold, bitcoins, artwork etc.

    1. Shawn,

      Thanks for your thoughtful comment. You make some valid and important points.

      One place I will push back against you a little is that for many of us, especially early retirees, the line between working and retired gets blurry as many of us are earning at least some income. This makes hard and fast rules less applicable to a substantial portion of the readership of this blog.


  11. Do you know if interest on I-bonds is DRIP’d back into the account and earns the interest paid in the following 6 month period. In other words, do I-bonds compound? Also, do you know if that interest earned is taxed or tax free? If taxed is it taxed when earned or when withdrawn?


  12. Thank you for that very honest post.

    Bond funds have been everyone’s favorite horse to flog these days. I’m now more aware of the pitfalls of the “continuous” ladder behavior of bond funds. If I needed the money in my bond funds today, it would have been disastrous. So I have to figure out how far ahead I need to withdraw money that I need from a bond fund. Five years for an intermediate bond fund? Does that change based on the trend for interest rates? An article along those lines would be great to read.

  13. Hello Chris – thank you for sharing your experiences. My response is not for your website but FYI. I have listened/watched a few of Paul Merriman, Chris Pedersen and Daryl’s and i think it might be of interest of you because of your drive to become a CFP and of course your website. Paul started, grew, and sold his financial planning company. Now he freely share his wisdom, just like you, to help others and make this world a better place. You will see they have modeled different index fund portfolios over the last 100 years to see which has the better return. And they vary over a 10 or 20 year period. Chris stated each person has a different risk tolerance and are in different financial situations. Some need the money to live on in retirement and there are some that are leaving the money for their family/charity. Here’s paul’s website he use to write articles for Marketwatch. And here is a link to a word document of the notes i have been taking from their YouTube videos. Paul also introduced me to the idea of funding or starting your grandchildrens retirement. Just give them $10k when they are born and watch it grow to $100 million + over their 90 year life time.

    I hope you and your family have a blessed Thanksgiving!

    1. Bill,

      Thanks for sharing that resource. I am a fan of Merriman’s work and have read/listened to him for years.


  14. Excellent analysis Chris. Quick question. What’s your strategy for refilling your cash allocation after you use it for living expenses? I know Darrow touches on this in his book. I was considering waiting until either the stock or bond index funds returned to all time highs and just sell down the minimum stocks/bonds to cover expenses until that happens. Curious if you had any feedback on that strategy. Thanks

    1. dap,

      What we personally do is to live primarily off earned income from my wife’s job and my blog income. Month to month, we fluctuate between net savers (about 2/3 of the time) and net spenders (about 1/3 of the time). We typically are able to replace spent cash from income within a couple of months, so we don’t really have a strategy for this yet.

      We will occasionally sell off taxable investments to create cash to make Roth or HSA contributions, and we really don’t try to time those sales. Instead, we just sell when we need the cash as a kind of random approach.

      Sorry if not particularly helpful, but that’s what we do.


      1. Thanks Chris, your strategy makes sense. I recently did some harvesting for tax losses that also generated cash.

  15. Hi Chris,

    I love your monthly write ups. I’ve been following you online for quite some time. And i love the details and accurate comparisons you give all of us. You work hard at this and it shows.

    My comments here today are in response to one of the arguments you made against Bitcoin. You said that one of the drawbacks is that you might lose your Bitcoin on a hard drive if it was lost or burned or stolen. This is kind of a misnomer and i read it as kind of a straw man argument. In point of fact, your Bitcoin is never stored on any device. Hard drive or whatever. Bitcoin exists and has existed for 14 years solely as code on the blockchain. When someone acquires Bitcoin, they simply acquire the rights to a specific portion of the existing supply. This is secured via several layers of protection. Your private keys, a 12 to 24 word pass phrase. A hardware device which can be replicated with your keys should you lose it or it is damaged. This is known as a cold storage device. And lastly your Bitcoin is protected by the gigantic network of nodes that are located around the world and now in space. This massive network is open to anyone, open source, and creates a trustless validation of your Bitcoin on the network that simply cannot be deleted. This network is massive and every node on the network keeps a full copy of the block chain for anyone to verify any and all transactions at any time of day or night. It is public and transparent yet extremely secure. A person could memorize their private keys and never have to worry about losing their Bitcoin. But i would still write it down somewhere and keep that private key safe. Maybe a safe deposit box etc.

    Bottom line is that Bitcoin is volatile yes. Because it is still relatively new and finding its own. But it is also extremely secure. With Bitcoin you are your own bank. There is no central authority overseeing operations. No one has control of Bitcoin including the original creator who literally walked away from his creation after it was up and running. Now only a 51% attack is the only way Bitcoin can ever be stopped. And that is all but impossible what with nodes being in almost every country on earth.

    I got into Bitcoin after being a gold bug back in 2019 and i have yet to be disappointed. And, yes, it is still super early. Gold will continue to produce very weak returns because its supply continues to grow by 1-1.5% every year. While Bitcoin on the other hand has a fixed supply that is being cut in half every four years.

    If you have never read “The Bitcoin Standard” by Saifedean Ammous I highly recommend it. I’ve read no less than 8 books on the subject now and TBS is by far the best.

    Thank you again for all of your write ups and helps over the years.

    All the best,


    1. Brian,

      If you are saying that I do not fully understand Bitcoin and I may not be 100% accurate, then that is probably fair. The complexity of cryptocurrency is one of the main reasons I choose not to invest in this asset that I don’t fully understand.

      I do think that my assertion that you can lose 100% of your investment even by losing your password or having it stolen from an exchange is very fair.

      If you or others want to invest in crypto, that is your choice and I don’t believe in telling anyone else what to do or not do. But as for me, I am happy to sit out Bitcoin and crypto in general.


  16. Thanks Chris. Very vivid description of the unsolvable dilemmas we face when we feel the need to ‘do something’ as we see our wealth decline before our eyes, even for expert people like you. The only action which makes me feel better is to hold ´sufficient ´cash holdings to ride the bear market without having to sell the rest of assets, at the cost of inflation, and/or having an annuity to secure a lifestyle floor. Having 95% of my assets subject to market risk in retirement is not a good feeling to me. There is a methodology named ‘asset dedication’ which claims to be a ‘sweet spot’: It gives you some clear rules to set your asset allocations in a more meaningful and customized way tha just a risk profile questionnaire or a montecarlo simulation, but my knowlegde does not allow me to check what truth is really there, or if it’s just a nice theory. ¿Do you have an opinion on this?

    1. javier,

      This seems similar to what is often called a bucket strategy.

      The arguments for this approach are primarily behavioral. You can search for Christine Benz’s writings for Morningstar on this topic as she is a consistent and vocal proponent for it.

      The arguments against this approach are based in mathematical probabilities. Karsten Jeske at Early Retirement Now has written at length making these arguments.

      At the end of the day, you need to make your own decisions based on your psychological approach and whether you are more comfortable with a probability based approach which is likely to work out in your favor, but exposes you to more sequence of returns risk, or a bucketing approach which is likely suboptimal mathematically, but provides comfort to many people.


  17. Yeah, I’d say you still dodged a bullet by staying out of crypto. Time will tell, but right now I sleep better without direct investment there. What I lament is cash just sitting there and losing due to inflation.

    1. Pat,

      We’re on the same page with regards to sleeping better by avoiding crypto. I also agree that time may tell and a speculation in crypto may still pay off, but fortunately I don’t need to win that bet so I’m happy to not make it.


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