March 2020 Best of the Web

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It seems like the world is changing daily in front of our eyes. Several articles that I bookmarked to share earlier this month already felt dated and irrelevant in our current environment.

The BestWe managed to collect a variety of articles that are both timely and timeless to help you invest through the uncertainty of this market crash. There were also some great selections to help you think about managing volatility going forward as you continue planning for or managing your retirement.

In this time of fear and uncertainty, it’s important to stay informed. But we must not lose our sense of hope. So I included a few ideas that have me feeling optimistic about the future.

We also can’t lose our sense of wonder for all that is amazing in this world. One of the common values that Darrow and I hold dear is finding that sense of wonder in nature. So we close with a few selections about getting into the great outdoors, including one guaranteed to bring a smile to your face even if you don’t share our love of wild places.

Investing Through a Market Crash

Are you questioning what to do with your investments during this period of market chaos. Some very smart people are answering questions many of us have.

Allan Roth asks What would Jack Bogle do?

Mike Piper asks more poignant questions, What’s Coming Next? And What to Do About It?

Ben Carlson is a student of markets. He asks What If You Buy Stock Too Early During A Market Crash?

Limiting Volatility Risk

For younger investors looking to build wealth, bear markets are your friend. They allow you to purchase more stocks at depressed prices. But for those living off of our portfolios, bear markets (particularly long bear markets early in retirement) can decimate a portfolio. It is vital to have a strategy to be able to avoid selling out of need or panic.

Michael Kitces was on the Choose FI podcast to discuss flexible spending rules in retirement and the massive impact of being adaptive with spending and/or earning in retirement.

Christine Benz advocates for a bucket strategy and points out that you won’t hear much about cash drag in 2020, writing The Buckets Are Working.

Portfolio Charts looks at the performance of a variety of popular portfolios over the past month and during the biggest drawdowns historically with Asset Allocation in the Most Painful Month.

Challenge of Creating Retirement Income

One challenge retirees face is converting a portfolio built for accumulation into retirement income. Prior to the pandemic and resulting market volatility, Vanguard announced dramatic changes to its managed payout fund. In the wake of this news, Madeline Hume explored, Why Haven’t Retirement-Income Funds Caught On?

A Little Bit of Hope

It’s easy to get caught in the doom and gloom of our current circumstances. Morgan Housel reminds us that many of our greatest societal triumphs develop as a response to some of our greatest challenges, writing Common Enemies.

I recently shared how we’re planning for our daughter’s college education, electing to use a taxable account over a 529. We chose flexibility over tax savings because we’re not sure what the value of a college degree will be or how education will evolve over the next decade. I personally found it encouraging to receive this message from my alma mater, The University of Pittsburgh, announcing that they were reducing the educational requirements for their Doctor of Physical Therapy program by one semester in an effort to reduce student costs and enable them to enter the workforce sooner. I reached out to commend them for their interest in their students’ financial well being. This opened a conversation and plans are in the works for me to give a talk to their students about getting a good start financially and the principles of financial independence when the school reopens.

The Great Outdoors

One of the first blog posts I ever wrote, Dirtbag Millionaires, explained that Kim’s and my initial motivation to seek financial independence was driven by competing “dirtbag” ideals with a desire for financial security. Owen Clarke wrote Deep Pockets explaining that “dirtbag” climbers are mostly a relic of the past. He explains the important positive economic and environmental impacts climbers have on their communities.

Darrow has struggled with getting out and being as active as he’d have liked over the past few years. Nagging injuries have plagued him until he found great aid from an often overlooked tool. He explains in this interview, The Value of Time and Freedom.

Sometimes injuries, weather, and yes even quarantines keep us stuck inside. Kristen Bor shares 20+ Ways to Get Your Nature Fix Indoors.

The Not So Great Outdoors?

In times like this, we all need to remember to laugh a little. Whether you love or hate the outdoors, you’ll get a good laugh from our last selection. From Amber Share,  I Illustrated National Parks In America Based On Their Worst Review And I Hope They Will Make You Laugh.

This past month has been a struggle to know what to write about. Like everyone else, we’re adjusting to our new reality. We would appreciate any feedback as to the content and tone of the articles here, and what you desire from us as we all work through unprecedented challenges and constantly changing circumstances over the coming weeks and months until life regains a sense of normalcy. Thanks and take care of yourselves and each other.

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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. Thanks for the feedback Andrea. Seems to have hit the spot. It was the second most clicked on article out of the bunch.

  1. Chris,
    Thanks for the great links. I found the “I Illustrated Parks in America Based On Their Worst Review And I Hope The Will Make You Laugh”
    quite funny. Last night, I watched “Figure it Out on the Hayduke Trail” on Amazon Prime Video. So this made it even funnier. I recommend the video for anyone that wants to armchair hike.

    1. Thanks for the video recommendation. I hadn’t heard of it, but it looks awesome.

  2. I might be in the minority, but I think we need content and tone of financial blogs to stay the same. We need to take things in perspective and think long-term. Ebola, SARS, HIV/AIDS, etc have had global impacts in the past and the world managed/coped with these diseases over time. This too will be better managed over time. I don’t think I’m being callous. I have 2 immediate family members working on the health care front lines so we are well aware of COVID-19’s risk to life. My brother just finished a 3 day shift in the COVID 19 ER tent treating patients and has self isolated in their guest suite away from his family just as a precaution. We’re taking reasonable precautions per CDC guidelines, donating to food banks to help those less fortunate and other stuff that makes sense. But life goes on and everyone should cope where they need to and continue regular life where they can, including planning for retirement. For example, that same brother emailed last night to comment about our retired mom’s taxes/finances.

    Regarding this article, the bucket strategy article reference that describes having adequate “dry powder” (bucket 1) cash is what helps keep me sane during big market drops. Knowing you can weather 2 years of unemployment makes these market drops more tolerable. Just like paying off your mortgage might not be optimal financially, having a good stash of cash might not be optimal, but it gives psychological comfort that the pure numbers don’t reflect.

    1. Philip,

      Agree about the psychological benefits you describe. Being completely debt free and sitting on a year’s worth of normal expenses, more like 2 years of essential expenses, allows us to be in a fortunate position of not worrying much at this point as we wait things out. Lots of lessons there, but I still struggle with the timing and optics of pointing this out at a time when a lot of people who weren’t prepared are really hurting and scared.


  3. Maybe this will help with those caught with low safety funds portfolios. We know bonds will have very low return for well over a decade out. Yes, they provide a counter weight to stocks volatility, but modern day bonds have loss much of their normal day to day low volatility character given the extremely low base interest to work within. So, presently bonds have the lowest value as a attractive investment as compared to prior 30 years. Sure, during this down turn bonds worked and did what investors wanted them to do, hold value. but the disadvantages of modern day bonds persist for long term holdings.

    We read of the “Bucket Strategy” portfolio that shifts money based on need duration. Basically, stock for long term and one to four years of expense need tied up in ultra safe bonds and/or cash. Most investors practice some of this and it is a common sense approach. There may be a problem with holding so much investment in ultra low return accounts? Remember the retiree is spending money on a continual basis. Buckets have to be replenished or balanced to established levels. This is a dynamic thing, selling stocks for safer short term spending. Maybe a retiree wants 3x spending in these accounts. For example 40$k per year with three years of safe funds for $120k total. You can estimate the cost of this approach with historical returns. The $120k safety account will basically be a forever balance of $120k, for this example in short term bonds. Set up two accounts for this analysis with $120k in each. One short term bonds and the other a good growth fund. I would suggest a fund like Wellington, S&P 500, or better yet Contra fund. Slice and dice the years, but after the review of the investment balance this exercise should shine a light on steady low return risk. Heck, even on the worst down turns the stock investment bucket has more money than short term treasury. If your stock bucket has more money as compared to the bond bucket one should not feel bad spending the money even in a downturn. The longer these two bucket analysis run the more and more bucket money is accumulated in the stock bucket. In short order your stock safety bucket will be the safest. The gain will surpass possible downturn loss. Now, this exercise does not simulate withdrawals, but it’s accurate given the need to replenish the buckets to acceptable portfolio guidelines. It would be best to tweak spending and time withdrawals. This would empower the security bucket even more. The dry powder value of bonds may work like timing the selling, but not a big factor given our emotions and need for security. Investors have to much emotional baggage and disadvantages to play that game with repeatable success. for long term.

    1. Forrest,

      Interesting insights. It highlights the challenges of math vs. emotion which is always tough. Add on trying to invest in these times when all asset classes are overvalued by historical standards and it only makes this balance more difficult. I’ll be writing much more about this going forward.


  4. Thanks for the diverse and uniformly high-quality content Chris. I especially enjoyed the interview with Darrow and the National Parks humor!

    While I appreciate you including the link to the Portfolio Charts article, the allocations discussed there work as well or better than equity-heavy portfolios during the accumulation phase and for very early (30-40ish) retirees as they do for traditional ones. The fellow who runs that site is himself in his 30’s and is a regular contributor to the Early Retirement Extreme forums as well as Bogleheads, etc.

    The numbers don’t lie: compare the returns, drawdowns and safe withdrawal rates over any time frame you choose of, say, the Golden Butterfly or Ray Dalio’s All Seasons portfolio with a Bogleheads 60:40 or something truly insane like a JLCollins 100% Total Stock Market approach and see for yourself. Having to resort to “buckets” or padding unnecessarily risky allocations with cash really doesn’t compare with constructing portfolios that have the ability to provide decent returns in all market and macroeconomic conditions.

    You asked for suggestions for future posts and I think the tail end of this excellent interview with Larry Swedroe might provide a fruitful one. Larry dives into the classic risk assessment questionnaire question regarding how much to allocate to equities by looking afresh as what “ability, willingness and need” to take risk might mean in the current environment where entire industries (e.g. restaurants, retail) are being destroyed or at least remade in ways that will make them almost unrecognizable six months or a year from now. “Ability” to take risk depends on just how stable one’s source of income is.

    Swedroe is always a great source of perspective, and since he’s the author of the very best book on dealing with exactly what we’re living through (“Avoiding the Risk of Black Swans”) perhaps a feature on or interview with him about approaches for your audience might be of interest.

    1. Kevin,

      Thanks for the kind words and appreciate the suggestions. I think the idea of more interviews is an excellent one, and Swedroe would be a great person to talk with.

      I agree numbers don’t lie, but you can choose the numbers you want to tell different stories. You’re referring to backtested portfolios, which present compelling numbers. But I don’t agree that those numbers are going to be representative of the future. Look at what interest rates have done over the past 40 years.

      I simply don’t think that a bond heavy portfolio can be expected to do in the next 40 years what it has done over the past 40 years when interest rates are currently at (hopefully!) or very near their floor. Admittedly, I thought that a few years ago when the 10 year was hovering around 2%. I now think it is possible (50-50) to likely (>50%) that we’ll have negative rates here (as they have in Europe and Japan for a while now). Still at some point, there has to be a floor where interest rates can’t go lower. And dropping interest rates is the only way bonds can even come close to matching inflation from these starting points.


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