I agree that you cannot predict the market. History shows that we always have fluctuations, some of which are large like in 2022. History also shows that it tends to recover quickly. So I make sure I have enough relatively guaranteed income and liquid assets to ride out at least a 3 year dip. I sleep well at night! Bill
I liked Jonathan's philosophy that you should have enough liquid assets and guaranteed income to cover your next 5 years spending, especially if you are retired. I lean towards at least 3 years but the concept is the same. I like SPAXX and FAGIX for my liquid assets, SPAXX is a good MM fund and FAGIX has a really good long-term record as kind of a hybrid stock/bond fund, it does fluctuate some(+/- 10%) but it has been run by the same guy for 20 years.
Good article. I would add a question #5 which is how will our government resolve its spending and debt problems. We all can see we are on an unsustainable path but there is no willingness to confront the issue in a meaningful way. Bill
I agree with Fadell's thesis but I see the topic a little differently. If an investor can recognize the true long-term positive or negative potential of a company's actions vs. its current valuation they can achieve results better than index funds. To the examples of Kodak and Apple we can add Xerox, Sears, and a few other retailers wo missed the boat. I think good current examples of this future pricing uncertainty are Nvidia, TSM, and Space X. Nvidia's challenge will be competition which will come from many directions due to their huge profit margins and relatively low barriers to entry, I am reluctant to buy it in spite of its popularity. I think TSM has unrecognized value because the real barriers to competing with it effectively from a volume and manufacturing cost perspective are very high, I worked in the chip industry for a long time and understand these barriers. SpaceX is a giant question mark in my book. Everyone loves Elon but Tesla's valuation in terms of PE is in the stratosphere, the cybertruck has been a giant bomb. By contrast Starlink has been very successful. SpaceX has shown they can build rockets successfully but no responsible person would use a commercial airplane designed by their team based on their design methodology which is not focussed on avoiding system failures. Bill
I have long thought that markets always overshoot on both the upside and downside. This is how the correct value for an asset is determined. Fear and greed are the drivers. So stay diversified and relax. Bill
I think the best way for individals to minimize overall risk is to keep a "comfortable" portion of their assets in money market funds in addition to staying truly diversified with the bulk of their assets. Your returns will be small on the MM funds wrt inflation but you should sleep well at night! Bill
Adam, I am glad you mentioned the bucket approach. It is very appropriate for those who are retired and cannot have so much in stocks that they would be in a difficult position for a long time if they had to "wait" for a major market recovery. Bill
Things always change. Intel, IBM, GE, and GM were major success stories for a while..... NVIDIA's success today is attracting a lot of competition that will affect their margins in the long term. The article is either a good argument for index funds or for getting in and getting out fast! Bill
Jonathan, I and I know many others have enjoyed and learned a lot from your columns for many years. Many people have benefited from the sound advice presented here. I will be keeping you in my thoughts and hoping you are lucky in spite of your prognosis. Bill Kosar
Comments
I agree that you cannot predict the market. History shows that we always have fluctuations, some of which are large like in 2022. History also shows that it tends to recover quickly. So I make sure I have enough relatively guaranteed income and liquid assets to ride out at least a 3 year dip. I sleep well at night! Bill
Post: Beyond Predictions
Link to comment from October 24, 2026
I liked Jonathan's philosophy that you should have enough liquid assets and guaranteed income to cover your next 5 years spending, especially if you are retired. I lean towards at least 3 years but the concept is the same. I like SPAXX and FAGIX for my liquid assets, SPAXX is a good MM fund and FAGIX has a really good long-term record as kind of a hybrid stock/bond fund, it does fluctuate some(+/- 10%) but it has been run by the same guy for 20 years.
Post: Structuring Bonds
Link to comment from September 20, 2026
Good article. I would add a question #5 which is how will our government resolve its spending and debt problems. We all can see we are on an unsustainable path but there is no willingness to confront the issue in a meaningful way. Bill
Post: Open Questions
Link to comment from July 4, 2026
I agree with Fadell's thesis but I see the topic a little differently. If an investor can recognize the true long-term positive or negative potential of a company's actions vs. its current valuation they can achieve results better than index funds. To the examples of Kodak and Apple we can add Xerox, Sears, and a few other retailers wo missed the boat. I think good current examples of this future pricing uncertainty are Nvidia, TSM, and Space X. Nvidia's challenge will be competition which will come from many directions due to their huge profit margins and relatively low barriers to entry, I am reluctant to buy it in spite of its popularity. I think TSM has unrecognized value because the real barriers to competing with it effectively from a volume and manufacturing cost perspective are very high, I worked in the chip industry for a long time and understand these barriers. SpaceX is a giant question mark in my book. Everyone loves Elon but Tesla's valuation in terms of PE is in the stratosphere, the cybertruck has been a giant bomb. By contrast Starlink has been very successful. SpaceX has shown they can build rockets successfully but no responsible person would use a commercial airplane designed by their team based on their design methodology which is not focussed on avoiding system failures. Bill
Post: Pricing the Future
Link to comment from June 20, 2026
I have long thought that markets always overshoot on both the upside and downside. This is how the correct value for an asset is determined. Fear and greed are the drivers. So stay diversified and relax. Bill
Post: AI, Bubbles, and Markets
Link to comment from March 21, 2026
I think the best way for individals to minimize overall risk is to keep a "comfortable" portion of their assets in money market funds in addition to staying truly diversified with the bulk of their assets. Your returns will be small on the MM funds wrt inflation but you should sleep well at night! Bill
Post: Managing Investment Risk
Link to comment from February 28, 2026
Excellent article.
Post: 2026 Financial Plan
Link to comment from January 3, 2026
Adam, I am glad you mentioned the bucket approach. It is very appropriate for those who are retired and cannot have so much in stocks that they would be in a difficult position for a long time if they had to "wait" for a major market recovery. Bill
Post: Index Fund Bubble
Link to comment from December 6, 2025
Things always change. Intel, IBM, GE, and GM were major success stories for a while..... NVIDIA's success today is attracting a lot of competition that will affect their margins in the long term. The article is either a good argument for index funds or for getting in and getting out fast! Bill
Post: Harder Than It Looks
Link to comment from August 16, 2025
Jonathan, I and I know many others have enjoyed and learned a lot from your columns for many years. Many people have benefited from the sound advice presented here. I will be keeping you in my thoughts and hoping you are lucky in spite of your prognosis. Bill Kosar
Post: The C Word
Link to comment from June 15, 2024