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I had a dream the other day that I just can’t get out of my head.  And it felt so real.  I was at FinCon, meeting a lot of experts in personal finance, and I told them I just sold all of my stocks and moved everything into cash.

People went nuts.  You can’t believe how they reacted.  Everyone started talking at once.  “Are you crazy?” and “You’ve got to stay the course, stick with your plan” and “Don’t you know you can’t time the market?”  It was nerve-wracking to admit.  Scary, really.

Oh, and I was standing there in my pajamas.  This was a dream after all.  At least I wasn’t naked.

I decided that I would try to get back in their good graces.  After all, I came there to make friends.

So I asked them.  Go ahead, you financial experts.  I want to hear your best ideas.  Come on you guys.  Tell me why I’m wrong!

Invest at the Peak

First Chelsea from Mama Saves Fish came forward.  It was great to meet a woman whose opinion is highly valued in the FI world.  The financial bloggers wanted her to tell me about her article called why I should invest even in peak markets.  It is one of the finalists in the Rockstar Rumble, the competition to find the best money post of 2017.  And her post is one of the most popular among voters.

Chelsea pointed to her graph and showed me.  Look here.  If you had invested $10,000 on October 9, 2007 it would be worth $15,233 “today”.  Today being May of 2017 that is.  That was when she wrote the article.  But today in March of 2018, I would have $17,798.  That is almost doubling my money.

What is so special about October 9, 2007 I asked?  Well, she told me, that was the highest point in the SP500 before the Great Recession.

Chelsea asked me what I was afraid of.  Well, I thought.  It’s too high up here on this peak.  I might fall.

I don’t know why I was worried about that.  You can fly in your dreams, right?

Time in the Market is better than Timing the Market

Several people said they saw and liked that tweet.  Someone said “Hey, I know Philip Taylor is a bit busy right now”.  We were at FinCon after all.

Many of the bloggers said they have written articles about market timing.  I heard from Brian from SunscreenYourGreen and Rich from RichOnMoney and from Jacob and Vanessa at the CashCowCouple.

There was even a guy who named his site TimeInTheMarket.

I know, I know.  I know this stuff.  I’ve been a 100% stock market investor for over 30 years.


Index Funds Are So Easy to Sell

Someone in the crowd yelled out a question.  “What did you sell? Is it going to raise your taxes?”

Nope, no taxes.  This is all IRA money, completely invested in the VTSAX.  I got nervous reading about how high valuations are right now.  And when I got scared, in one simple click they were gone.  It’s just that easy.  It’s simple really.  Too simple.  I must have done it in my sleep.  I think.

You can’t believe who I met next.  FinCon is amazing.  It attracts big names in the finance world.

JL Collins stepped forward.  Oh my gosh, he is a legend.  And I was hoping to get him to autograph my copy of A Simple Path to Wealth.  But here I was, standing in my pajamas with most of my assets in cash.

“Toughen up bucko and cure your bad behavior”

That’s what he said.  He was quoting himself actually, from a post he wrote titled There’s a Market Crash Coming and Dr. Lo Can’t Save You.

Every day, there will be credentialed experts predicting a market crash.  And that same day you’ll find another set of experts predicting a boom.  If you pay attention to it, it’s dangerous to your wealth.  And it will drive you crazy.

Market crashes are to be expected.  They always recover and with time they always go up.  He had a long list of reasons to toughen up, ignore the noise, and stay the course.

And he was starting to convince me.  Except there was that last thing he said.

“There’s a major market crash coming!!  And there’ll be another after that!!”

“What wonderful buying opportunities they’ll be.”

Buying Opportunities?

My husband and I are early retirees.  We’re not in the accumulation phase anymore and haven’t been for a while.  The only buying opportunities we have are either to reinvest our dividends or to do what I just did.  Time the market.  Enjoy our gains.  Take some money off the table.

Some people call this “Dry Powder”.

Dry powder?  This prompted ActuaryOnFIRE to step forward.  He pointed to his post called That Dry Powder You Have – You’re Better Off Snorting It.

Now I know these finance types enjoy beer.  But snorting?  Really?

And with that we were all headed to the bar to continue the discussion.  I love these people.  This is my tribe!

After we were seated and I bought everybody our first round (I had lots of cash, you know!), we were back to that question about dry powder.  And the problem of missing just a few of the best single days in the stock market.

Actuary showed a chart of what happened over the period of 1998 to the end of 2017.  When you take out just a few of the best days from that whole time period, your entire return gets cut.

“You only need to miss the 30 best days over this period and your return would be negative…. Negative!”

And then he pointed out that six of the best 10 days occurred within two weeks of the 10 worst days.

Huh?  Is he saying that most of the bad days happen when the market is crashing?  But I’m selling high.

Buy Low, Sell High, Right?

About that time, Todd Tressider stood up and said:

“She’s Right.  Don’t you know there are bubbles everywhere?”

I remember hearing Todd interviewed on the ChooseFI podcast.  It was all about risk management.

Todd pointed to a post he wrote called Bubbles, Bubbles, Everywhere.  He said that “it’s not natural for the U.S. stock market to march relentlessly higher into extreme overvaluation with almost no volatility.”  And also “It’s not natural for bonds to trade at negative interest rates in many parts of the world with U.S. interest rates approaching zero”.

All the major asset classes are overvalued right now.  Reversion to the mean will absolutely occur.  We just don’t know when.

We have to ask ourselves to compare the risk against the reward.  To weigh the potential upside against the projected downside.  And right now, there is much more risk to the downside.

And then he quoted Warren Buffett:

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

Several people agreed.  Yes they heard that quote.  And they also heard the other classic “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”

This prompted the PhysicianOnFIRE to come forward to introduce his friend the VagabondMD.  Mr. Vagabond did a guest post that explained why he holds nearly $500,000 in cash.

He’s lived through several major recessions.  For this reason, he asked whether someone really wants to have to lock in a loss by selling in a really bad year.

And then he asked me an interesting question.

Why Play a Game You’ve Already Won?

He pointed to a classic post by the WhiteCoatInvestor that considers the wisdom of William J. Bernstein from his book The Four Pillars of Investing.

Have I won the game?  Is this a game?  Or is this just a dream?


I wasn’t really sure anymore.  All these different ideas.  I felt like I was just starting to wake up.

And then Steve from ThinkSaveRetire stood up.  He used the title of a post he wrote to ask:

“It’s easy to be retired early when the market is great, huh?”

Yeah, it sure is.  We’ve been retired for seven years and it’s easy.  Except I’m apparently not sleeping that well.  They say you have to be able to sleep well at night, right?

The main point in his article was that everyone needs to understand their own risk tolerance.  It’s okay to be risk-averse.  And it’s also okay to be risk-tolerant.  It probably varies by age.  Younger people have more time to recover and can take more risks.  But everybody is different.  And that’s fine.

Tanja from OurNextLife decided to speak up.  What a thrill it was to meet her.

She pointed to a post she wrote called There’s No Such Thing As a Risk-Free Life.  In trying to be conservative with money over the years, she found that there is no way to avoid risk.  Everything you do ends up with a hazard of some sort.

“There is no risk-free option. Not ever. Not just with money.”

You have to pick your poison and ask yourself which kind of risk you prefer.  Volatility risk or losing money to inflation?  You have to choose.  Because not choosing is its own risk.


Suddenly, I bolted up out of bed.  I was awake.  And the biggest risk I was taking was that I was no longer dreaming.

So tell me, do you sleep well at night?  Ever thought about going completely to cash?



  1. Accidental FIRE

    Just be careful, some people walk in their sleep. So it’s not too far of a stretch to be able to click in your sleep. Keep the computer off!

    • Susan

      Good point. Some people say it’s silly to get up and check your Personal Capital account every morning. Now there’s a good reason!

  2. DocG

    I think the point of you dream is that you want to go to FinCon this year. And meet me!

    • Susan

      You are so right DocG. I am planning my first FinCon ever. Now the opportunity to meet one of my favorites in the FI world. That will be a dream come true!

  3. Hatton1

    Great post. Very clever. I also know VagabondMD. We had a beer.

    • Susan

      Thank you so much. I envy you. I only shared a beer in my dreams. 🙂

  4. Mr. Groovy

    Great post, Susan. It makes a heck of a lot of sense. But I’m still a wuss. I much prefer my card-counting method of investing. In blackjack, when the remaining cards are mostly low-numbered cards, the dealer has the advantage. When the remaining cards are mostly high-numbered cards, you have the advantage. Well, in the Wall Street casino, when stock valuations are high, the dealer has the advantage. When stock valuations are low, you have the advantage. Right now the Shiller PE ratio is 32.65. That’s twice the historic median. So I’m not out of the market. I’m just going lightly on my bets, especially since Mrs. G and I are newly retired and have to contend with sequence of returns risk. Right now 35% of the Groovy portfolio is in stocks (VTSAX and FSTVX) and 65% of the Groovy portfolio is in bonds/cash. Each year on Mrs. G’s birthday, we plan on increasing our stock portfolio allocation by 2.5% and rebalancing accordingly. (This is the Kitces-Pfau glide path strategy to mitigating sequence of returns risk. ) And should we suffer a 2008-like correction anytime soon, we’ll have plenty of dry powder to load up on cheap stocks. Well, that’s the game plan, anyway. And that’s my pathetic two cents. Thanks for making me think again, Susan. Complacency isn’t good for the mind.

    • Susan

      I am so glad you commented Mr. Groovy. I was “dreaming” about the two articles that you wrote on these exact points. The post on counting cards is a great analogy of how to understand the overpricing of the market. I recently listened to your podcast with CountdownToFI and I heard you talk about the glide path. For early retirees like ourselves, these articles both point to having a large percentage of savings out of the market at our age. I’ve always been a “stocks for the long run” fan, but as you can tell, I’ve been rethinking it. You’re not a wuss in my book. You have figured out a lot of important factors for retiring early. Thanks so much!

    • Phillip

      Unlike blackjack, the odds are in your favor on every deal. So I keep betting even when the market is high. In blackjack, like in stocks, the big money is made by varying your bets so that when the count is in your favor (e.g. stock prices are low), you bet more. So when the market dips, I buy with all my cash reserves and even consider using my HELOC to buy in.

      • Susan

        And I thought I was a “stocks for the long run” investor. Betting your HELOC! Now that is all-in. Some would frown on that, but I’m not sure there is a lot of difference between that and real estate investing. And if you have the equity, why not? I’d hope you would not do that unless it was a major dip though. And also I hope you are young enough to make that payback worthwhile. Thanks for stopping by!

        • Phillip

          Our house is paid off. Lots of folks don’t pay off their house and instead, use the extra cash to invest vs paying off their mortgage. So IMO, using the HELOC isn’t much different. During the 2007 drop, I considered it but didn’t pull the trigger. But this time around, we’re in an even stronger position to take on the risk.

  5. Brandi Gates

    Great post Susan as you did always
    Thanks for telling us many precious sense , i love your blog always and your writing style very good , you have nicely done everything in one article in great way
    Thank you for sharing

  6. Valentina Wilson

    Great post Susan 🙂 You can sell immediately and even day trade an ETF if you so choose. Index funds, like mutual funds, work differently. They use a system called Net Asset Value to set the price per share of a portfolio. The value of a fund isn’t calculated until the close of the trading day when this Net Asset Value is assessed