And bc of the virus we have been spending less each month. Travel hacking is definitely something to look into, IF you actually like travelling. Where are yall keeping your cash cushion now? It seems this is cash separate from your bond allocation and separate from any rebalancing actions. This continued until the market bottomed in March 2009. Apart from 1-year emergency fund (kept on high-yield saving account), this Vanguard ETF states for 100% of my investments. ** how often do you re-balance? If stocks do make new lows and I end up deploying all my cash and selling more bonds, I’ll still have an appropriate allocation for my risk tolerance and I’ll be an even better position to take advantage of any recovery that takes place. It will be fun to chat with you more about this stuff around the campfire :), Brilliant!!! I considered doing a proper rebalance in March when stocks tanked but since I still had cash on hand, I just used that to top up my stock funds. You forgot to include the extra 5k for each 20k transferred. I had a very similar approach to the Mad Fientist with the Covid-19 stock drop. Excellent system. I was never down more than 13%, which really helped me stay the course when S&P was down 30%. I got cold feet. Great article! Man, this is a much needed tool in this crazy subculture. I invest since ~2014 and it was my first experience like this. …market timing is a loser’s game so I always try to get my money into the market as soon as I can. You are not adequately exposed to those industries because many of the businesses are smaller sized. Let’s create a graph, similar to the graph we made in the previous article, but instead of the graph only representing a two-asset portfolio, let’s graph portfolios containing all of the stocks in the market. I’ve been needing the sapphire card so just signed up with your link yesterday. At that time, stocks were hitting record highs and hadn’t seen a significant pullback in a long time. The thing is, you never know what’s going to happen or what bad things are already priced into the market. There is one minor difference, historically an 80% stock and 20% bond portfolio has had the highest overall returns. daily)? Please try again. The advice that which asset allocation you choose matters less than sticking to one is pure gold (and counterintuitive). Can’t wait to use it! I wish it was available before black Monday in 1987 when the market fell 22.6%. If you have a specific trip coming up you want to use miles for, it makes sense to research the best points to get where you want to go. A thought occurred to me… You live in Scotland but still travel hack using US credit cards I presume? So I determined a value $x where I could invest $x at -15%, $1.5x at -20%, $2x at -25%, $3x at -30%, $3x at -35%, and $3x at -40%. See more of Mad Fientist on Facebook. We used to keep a large emergency fund bc we owned rental properties. In an up market you’ll end up overweight in stocks. I am currently (before the crash even) working through this on my own portfolio – whether to hold cash or bonds or both and at what percentages. I think that’s good advice. Do you just leave all the cards open forever? As you mentioned, your portfolio will never be perfectly targeted for long. Added it to my list so thanks for the recommendation! I came out with the following: Each month, I plug my numbers into a spreadsheet and it tells me how out of whack my allocation is and what I need to buy to fix it. I’ll probably steal some of the equations! First card was the obligatory Chase Sapphire Preferred, as recommended by Brad. If you already downloaded the spreadsheet I mentioned at the beginning of this post, you’ll notice there’s a tab call “Bear-Market Buying”. I haven’t been the best at balancing my portfolio over the years so maybe this is what forces me to start! We are no longer in the accumulation phase. And this year, I’ve pulled the trigger at 35.