Investment Update Mar 2020

Well, March came in like a Lion! Like most folks, March was not kind to me, with a significant drop off in the market. My investments went up & down like a yoyo, but I’m hopeful that all the Chinese Corona Virus effects have been marked in, and we’ll be ready for a little less turbulence.

Its interesting how the market has recovered over the last week. I did a quick update on March 23rd, and was down $191K for the month, but by the end of March, I was down only $161K. Still sucks, but at least its starting to come back a bit. My bet is we end up about 10% down for the year.

As you know, the allocation for my retirement accounts (IRAs, 401K, etc) is pretty much index funds, spread out between the  S&P 500, small-cap, international, REITs and bonds. I did rebalance my portfolio at the beginning of the year, selling stocks and buying bonds to get back to my target allocation. That helped a lot!

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

My 401K doesn’t have REIT option, so its just 25% for each.

Everything was down, just at different points. S&P500 was down about 12%, Small cap -20%, International 14%, REITs -19% and Bonds about 1% (?). Overall, down about 13% in my  major investments.  

My dividend account new allocation (as of Jan 2020) was:

  • 50% Dividend Stocks
  • 50% REITs

Boy, did I pick a wrong time to get out of bonds! Everything took a pummeling, down about 17% total (stocks were hit a little worse than the REITs). The interesting question is whether the stock companies will curtail their dividend payouts in 2020? We will have to see.

My brokerage account has two value index funds, and their down about 23% for the months. Again, like everyone, we just got savaged – down about 22%

So For March, I’m down -13.68% overall, and down -18.62% for 2020. I still have a little over $1M in invested assets (just barely) but was below the millionaire mark for a lot of March. Time to build back up!

Hope everyone is healthy and your April is better!

Mr. 39 Months

So how have your FIRE calculations been affected by the recent “Unpleasantness?”

As I write this, the American S&P500 Stock index is down 31.8% from its high on Feb 14, 2020. Trillions of dollars have been wiped out in the span of five weeks, primarily due to the uncertainty of the Chinese Corona Virus. Many folks, myself included, expected some sort of a market correction this year (the P/E ratio of 24+ vs. a historical average of 15 almost guaranteed it). Still, this as been a staggering loss for many, including myself.

My paper losses have been something around $250,000 from the beginning of the year (it would have been $350K if my allocation was 100% stocks). My plans to achieve FI on July 1st of this year are pretty much trashed (even without the recalculation that our financial advisor forced upon me). So how is my morale?

Actually not bad. I think this is due to my age – “with age comes wisdom.” In terms of the Chinese Corona Virus, my generation has been hearing about the end of the world so many times, that this sort of things bounces off. We will get through this like so many other things. In terms of market dropping, I’ve been through 1987, 2000, 2008 and now this. The market will recover, and the younger folks have even more time that we do. It does look like my retirement timeline will need to be reset, but even that doesn’t have me too frustrated.

Like many folks, I’ve been sequestered from work for this past week, working from home. While the workload has been heavy, I’ve been able to get it done. However, I find that I miss the comradery of my work peers, and it has made me realize that I can’t just retire and sit on the porch (most FIRE people can’t either). So when I retire, I am going to have to make sure I have a lot to keep me busy (side hustles, charity work, etc.) In the meantime, I think I will be OK with working a while longer in order to build myself back up to my FI number.

How are you doing in terms of your drive towards FI? How has this drop affecting your plans, if you are already retired or moving towards it? Are you handling this downturn well? What moves have you chosen to make (if any) in your investment strategy or allocation? I hope that you aren’t “overreacting” or panicking like so many folks I hear about. The S&P 500 is trading at a P/E ratio of 17.34 – which is still a little high vs. its historical average. Bonds aren’t selling well, due to the Fed’s interest rate drop. What do you do?

I’d like to hear from other people on how they are reacting to this. One great thing about our community is how much we share, including the “nitty-gritty” details.

Good luck in the weeks ahead!

Mr. 39 Months.

Timing the Market – is now the time to go “All In?”

Like most experienced FIRE investors, I don’t see the recent market “correction” as a disaster – I see it as a buying opportunity! The stock market is the only place where people go into despair when things go on sale. Very odd.

I wrote about the potential for a market correction back at the beginning of the year. At that time, the market timing signals laid out by Ben Stein were heavily weighted towards “do not buy additional stocks.” Note that this didn’t say to sell stocks, only that purchasing additional ones at the inflated prices of Jan 2020 was unwise. In this case, it appears the market timing had some validity.

So now that the market has fallen 30%+, I’m interested in potentially changing my current investment allocation, and purchasing more stock now that it has fallen, and reduce my new investments in bonds. Again, the idea is not to sell your current investments, but to guide you on what to purchase going forward. So what do the tea leaves of market timing say?

If you remember there were four categories of the timing:

  1. Price (Current price of S&P500 vs 15 year trend): For March 17th the S&P500 was at 2,529 vs. a 15-year average of 2,030. The signal is that stocks are still too high, so NO  to new stock investments
  2. P/E Ratio (Current S&P 500 P/E ratio vs 15-year trend): For March 17th, the assumed P&E was 19.03 vs. a 15-year average of 23.4. Since the current P/E is lower, this signal says Yes to new stock purchases
  3. Dividend yield of S&P500 vs 15-year average: For Feb 2019, the dividend yield was 1.97% vs. a 15-year average of 2.05%, so this signal says No to new stock investments
  4. Earnings of S&P500 vs. AAA corporate bond (stock earnings “yield” vs. yield of AAA bonds): For March 17th, the P/E ratio is 19.03, or the equivalent of a 5.25% yield (1/19.03) vs. a current AAA bond yield of 2.94% – thus the stocks are providing a better earnings yield than AAA corporate bonds. This signal says Yes to new stock purchases.

So we are 50/50 on the potential for new stock purchases. It appears the signal is saying that stocks still may be overpriced, even after a 30%+ sell off.

So what to do? I was originally thinking of changing my new investment allocations and going for a 100% stock purchases for new 401K and brokerage account purchases. Now that I’ve run the numbers, I think I’ll stick with my current allocation, and just go with that.

Also, if you remember, I changed my income account from a 25% stock, 25% REIT and 50% bond allocation to a 50% stock/50% REIT allocation – just in time to get hit with this massive sell off. This decision was a completely emotional decision, not based on a lot of analysis. So I’m not very confident in my ability to make decisions without firm analysis and numbers – my emotions seem to be 100% off.

So I’ll keep my current investment allocations (30% bonds, 17.5% REITs, 52.5% stocks in S&P500, small cap and foreign). I believe the market will recover one we get this Corona/Wuhan Flu out of our system.

Retirement Manifesto: Benefits of a Bear Market

Hopefully you are all weathering the storm alright!

Mr. 39 Months

What a difference a week makes….

Well, I am sure many folks are looking at their investments and going “holy *@#$%.” The S&P500 is down over 11.5% from just a week ago, and almost all the other investment folks have (Small Cap, International, etc.) have been similarly pummeled. Instead of late 2018’s gradual drop down, this was a quick slide into the hole. Ouch.

I actually did a quick update of my investments on Feb 21, just to look at them. I had made some significant moves in January, especially to my income account, and I wanted to make sure I had all my tracking in line for my monthly update. As of Feb 21, I was up 3.14% for the year, having recovered from January’s slight pullback. Things were looking good!

Now, for the year, I am down 5.55%, and have lost a total of $68,977. However, it is all “paper losses” that are offset by my huge gains for 2019. If you remember, I had noted previously that, in order for my annual net worth increase to stay on target compared to the last 18 years, I would have to experience a net loss of 9.6% for 2020. Heck, we are already there – and I have nowhere to go but up!

Seriously, this loss is, in my opinion, temporary. The market was overpriced (S&P  500’s P/E ratio was 25.04 as of Feb 1st – way above its 15-16 average. Even now, as of Feb 28, it is estimated to be 22.23, so it is still historically overpriced. The market sell off is, I think, a reaction to the supply chain interruption caused by eh Corona virus. Without raw materials and finished goods from the east, many companies will not hit their earnings for 1st and 2nd quarters, resulting in this drop in price as Wall Street recalculates potential earnings. By the end of the year, I expect we will be back to where we were back on February 21.

Therefore, it is steady as she goes right now. If I had some money on the sidelines, I would be investing in the market right now – but I dollar cost average and invest every month. I did rebalance at the end of 2019, selling stocks and purchasing bonds. My bond funds are up roughly 2% for February, so that helped even out the blow. The S&P may be down 11.5%, but I am not down as much, due to diversification and rebalancing.

I hope that you will stay the course and recover as well!

Mr. 39 Months

Two-Month Checkup on Spending

For some folks in the FIRE community, the opportunity to go through their spending with a fine-tooth comb, to analyze and agonize over every dollar spent, is an act of joy. There is a constant review of spending, and a categorizing of it into appropriate buckets. There is a celebration of dollars saved, and a flagellation when we fail to meet our budget objectives on a daily, weekly or monthly basis. Again, for some folks, this is one of the things they really enjoy, both to do and to write about.

For many others, the author included, we are less exact. For a lot of folks, there is the “set it and forget it” concept, where we determine our initial budget, identify the amounts we can save every month, and then set it up to automatically put this money away. This generally follows the “pay yourself first” philosophy, where you get the money out of your site (into investments) and then live on the remaining money. That is the philosophy that I have lived with for almost 20 years, and while I may not be as quick to hit FI as many others, it has allowed me to reach the point where I am close – while not spending excessive time reviewing my spending.

Still it does make sense, near the start of a new year, to review your base budget and see how you are doing. Better to identify this in the first couple of months, rather than be surprised halfway through the year, when you have less time to react and rectify the situation. This sort of analysis also leads to some surprises. So how have I done for the first 2 months? Here is my earnings, deductions, and expenses for Jan-Feb 2020, as a percentage of total income.

Area Category % of total
Earnings Regular Pay 98.6%
Earnings Cell Phone reimbursement from my company 0.7%
Earnings Expense Reimbursement 0.7%
Total Total
Area Category % of total
Deductions 401K Roth 5.7%
Deductions Dental 0.6%
Deductions H.S.A. 5.2%
Deductions Long-Term Disability 0.4%
Deductions Medical 4.4%
Deductions Spousal Surcharge 0.9%
Deductions Vision 0.1%
Deductions Wellness Credit -0.7%
Total Total 16.5%
Area Category
Taxes Federal Income Tax 11.6%
Taxes Medicare 1.2%
Taxes Social Security 5.3%
Taxes State Income Tax 4.0%
Taxes NJ Family Leave, Disability, Unemployment, etc. 0.8%
Total Total 22.9%
Area Category
Area Category
Auto Auto Fuel 1.1%
Auto Auto Repair 0.3%
Auto Auto Registration 0.0%
Auto Auto Tolls 0.4%
Charity Charity 4.3%
Clothes Clothes 0.7%
Entertainment Books 0.0%
Entertainment LA Fitness 0.3%
Entertainment Postal/office supplies 0.0%
Entertainment Hobby 2.2%
Food Groceries 3.4%
Food Dining Out 1.3%
Food Food/Snacks 3.0%
Home Home Repair 2.7%
Insurance Life Insurance 0.4%
Insurance Home/Auto Insurance 1.0%
Investments Investments 25.8%
Investments Savings 0.9%
Medical Medical – H.S.A 0.1%
Other Other 0.2%
Other Haircuts 0.0%
Other Other 1.1%
Taxes Property Taxes 4.5%
Utilities PSE&G 4.2%
Utilities Verizon 2.6%
Utilities Water Bill 0.4%
Total Total 60.5%

Some things, which stuck out after doing this analysis:

  • Taxes still take a big bite (27.4% of gross pay). Since we aren’t paying a mortgage anymore, this is our biggest hitter
  • Investments coming in 32.1% of gross pay (51.4% of net pay after taxes & work deductions). Doing a fairly good job of putting stuff away
  • Medical is coming in at 10.5% of gross – though the H.S.A. is about half of this
  • Food and Utilities each a little over 7%
  • Charity is about 4.3% of gross (we put away a select amount every month for this). Bump this up every year, but still have a ways to go to get to the biblical 10%

The only real surprise for our budget was a $724 utility bill in February. We do an even payment plan, and they relook at it every 6 months, and then charge you or credit you, based on actual usage. We have gotten money back from this as often as we have paid it.

Overall, we appear to be staying close to our budget, and nothing is really too far malfunctioning. Looks like steady as she goes into 2020!

How are you doing with your budget and spending so far in 2020?

Mr. 39 Months

Financial Advisor meeting #5 – Final Sad Trombone & comment on Financial Samurai

I’ve included several posts about our recent meetings with a financial advisor

Well, our advisor had some major family health issues with a loved one (cancer), so needless to say, it took a while to get our final report. We got it yesterday, in the form of a large, 3-ring binder, full of lots of data, analysis and recommendations. There was analysis of cash flow, net worth and draw down for several scenarios:

  1. Base scenario of both of us continuing to work for 4 more years, till I hit 60 and Mrs. 39 Months hits 62
  2. Scenario where we pull out more than the minimum from our 401K from 60-70 in order to reduce our RMDs
  3. Scenario where we I leave my current job, and get a much lower paying job that I love that earns $40K a year, and work at it till I hit 67
  4. Scenario where we have a major health issue requiring long-term health care when I hit 80
  5. Scenario where we retire the July (my FI date)

The analysis was very comprehensive. It was also very disheartening. In the first three scenarios, they all ended up pretty close to the same, we end up running out of money when we are 94/96 (i.e. three years before my target “death” date of 97/99). The major health and my July 2020 scenarios pretty much had us running out of money in the mid-80s. Since Mrs. 39 Months family has lots of her Aunts living into their 90s and 100s, that doesn’t seem like a good bet for us.

So why the difference? What has the advisor’s numbers coming in so much under my original planning? I’ve identified some callouts:

  • Original vs. Adjusted Budget: My original budget had us spending $72K/year, but after going deep into conversation with Mrs. 39 Months, this was revised up to $78K/year. Only $6K, but it does add up
  • Social Security & cost-of-living adjustments: I used the reports that came from social security to estimate our payments, but the reports assume you continue to work till you hit your retirement age (67 for us). Stopping at 60/62 reduces it, and stopping in July 2020 would reduce it even more. In addition, the advisor assumed a Social Security increase of 2% a year (below his inflation rate, see below), so the money will slowly be losing it purchasing power. I just assumed a straight line that would match inflation. Seeing the current state of social security in the US, I can’t say I disagree with the advisor
  • Inflation: My original planning just took inflation out of the picture. I used historical investment returns post-inflation (i.e. the returns I used had historical inflation already taken out). The advisor used a 3.25% inflation rate and a 6% for medical. I can’t really argue with the assumptions –  they do appear somewhat logical to me.
  • Return of investments: This is where I have real issues with the advisor. Based on our asset allocation (about 60% stocks, 40% bonds/savings) he came back with an estimated return over 40 years of 5.3% (i.e. only 2% above inflation). Since the average stock return from 1926 – 2018 is almost 10%, I found that too low. I’ve asked him to do another scenario with a 7.2% return (more in line with a 60/40 split)
  • Lifestyle spending: I have asked him to drop some of our lifestyle spending (travel, dining out, etc.) by 35% starting at age 75. I just don’t think we’ll be traveling or partying as much in our 80s and 90s.

We’ll see how this works out with the changes, but overall, I have to say I’m a little disappointed in the results, though not in the process. I believe the advisor is being very conservative in a lot of his assumptions – which appears to be the opposite of the FI community. Let’s face it, we are all very optimistic go-getters!

This sort of falls in line with news that the FI community found out about recently from the Financial Samurai blog last week. He wrote that he was planning to go back to work after 7+ years of early retirement. In his post, he listed his reasons (I invite you to read the posting) and I’m sure many of the readers could see his points (though his budget is way out of line with mine, since he lives in San Francisco). If you read closely, I think a lot of his reasons are non-financial. He just misses being around folks, the comradery, etc. It goes back to all the warnings that run through a lot of our community postings – you need to retire “to” something, rather than “from” something.

So, since I enjoy many of the aspects of my work, I am not too “bummed” about the potential of having to work longer in order to achieve “Fat FIRE.” We will see where the journey goes.


Mr. 39 Months

Investment Update Feb 2020

Only 5 months to go!

After its stellar performance in 2019, a lot of folks expected a “pullback” in the market. For January, it appears the market agreed, and the S&P 500 dipped 1.0%, from $3,257.85 to $3,225.52 (Note, it has since rebounded to $3,327.71, or up 2.1% for the year). Like most folks, I was intent to just “let it ride” and even if 2020 was a “null” year with limited growth, it was better to be in the market rather than trying to time the market.

As you know, the allocation for my retirement accounts (IRAs, 401K, etc) is pretty much index funds, spread out between the  S&P 500, small-cap, international, REITs and bonds. I did rebalance my portfolio at the beginning of the year, similar to what I did back in July 2019. As expected, this resulted in me selling some stocks, and purchasing some bonds and REITs – items which actually did very well in January.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

My 401K doesn’t have REIT option, so its just 25% for each.

S&P was down a little, but the Small caps were down about -2.0%, and International was down -3.2%. Bonds were up +2.2% and REITs were up about 1.0% – so the items I sold at the beginning of January, I sold high, and the items I bought, I purchased low – the big goal for any investor. My 401K account, since it doesn’t have a REIT option, did not gain the benefits from it.

My dividend account allocation original allocation was:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

However, I got tired of getting poor results from my heavily weighted bonds (the stocks were actually returning more dividends than the bond funds) so I changed it to a 50% dividend stocks/50%  REITs allocation. For January, the result was a dip of about -1.9%, though this could be just the timing of it all. The stocks have already rebounded in February, and I’m going to be getting higher dividend payments – so it should be good.

For January, I’m down about -0.26%. My bonds and REITs helped make up for the poorer stock performance, which is what you have those things for. February is shaping up well, so I’m looking forward to seeing what comes of that.

Hope your January was good, and the year is starting out well!

Mr. 39 Months

Goals/Objectives for 2020

I’ve done the goal setting posts before and gone over my 2017, 2018 and 2019 goals in previous posts. For 2019, the financial goals were all accomplished, but for the non-financial goals, it was a mix> Overall I believe I made real progress on a number of them, but probably “bit off more than I could chew.” As I stated before, as the FIRE gets you, you end up with a lot of the finances on auto-pilot, and then you really start to concentrate on what really matters.

For 2020, my financial goals reflect that we are closing in on “coming in for a landing” and need to adjust for that. One of those is that we’re going to stop contributing to the Deferred account, because when I retire, that is going to come to me in a lump sum, with a huge tax hit. After discussion, we are just going to start taking that money now, paying the taxes now, and then placing it in post-tax accounts. That way, we have the flexibility both in where to place it, and when we want to pull it out (and what tax benefits we could get from that).

Officially, I’m 6 months from my FI date, but like so many others, I’m starting to rethink actually leaving at that time. No so much because I need the funds (although that would be nice) but because I still enjoy some aspects of the work, and may not be ready to jettison it. I think what is more likely is that I’ll depart at some point, but continue to work on “side hustles” off to the side for some time.

So what about 2020?


  • Save $28K in tax-advantaged accounts (saved over $75K in 2019 – but a lot of that was in the Deferred). 401K, and Roth IRA.  
  • Save $41K in regular accounts (compared to $5K in 2019). As I noted above, we’re going to be taking about $3K per month and sticking it in regular investing, after paying taxes on it versus putting it in pre-tax with the company’s deferred. Starting to build that bucket of funds we’ll need prior to hitting age 65.
  • Increase dividend income from all accounts to $27K/year (compared to 29K in 2019).
  • Passive income covers 30% of base living expenses in retirement, estimated at $78K per year (previously, I was using $72K, but after meetings with our finance guy and Mrs. 39 Months, the budget ended up being $78K).  My long-term goal is to get my dividend/passive income up to where it covers over 100% of my expected retirement living expenses, so my investments can continue to grow.
  • Beat net worth growth rate of 6% (it was +20.1% in 2019 with the stock market run up). This is my historical growth rate for the last 10+ years, so I want to beat my average. As I stated earlier in January, I’m expecting the market to be flat this year, since we jumped up so much in 2019.


  • While not getting a membership, I want to attend six (6) of my local real estate investors association meetings this year. I’ll probably join permanently in2021. They hold a regular monthly meeting, a monthly meeting for new investors, and a monthly meeting for my specific county. All three could be interesting.
  • Double the number of blog visitors in 2020. Last year it was a little over 6,000. I want to get at least 12,000 this year, so I need to put myself out there more (i.e. comment) and write interesting topics. My thanks to everyone who stopped by, and I try to return the favor, and comment as well.
  • Create TKD Woodworking (my side-hustle name) with an LLC, website, finance tracking, etc. Sort of a trial method for running businesses.
  • Make $1,000 in sales (not necessarily profit) on items with TKD woodworking
  • Write/publish a book on finance.  I wrote one for new graduates in 2017, but I have identified an area of the community which hasn’t been served as well in the past. Hopefully I can assist with something here.  I’ve got the first five chapters outlined/partially done, but still have a ways togo.


  • Increase weight lifted by 10% from 2019. Was able to exceed this in 2019, need to continue to push it.
  • Average 2 hours of cardio per week, which is about what I’m doing now.
  • Backpack over 90 miles on AT (did around 80 miles in 2019). The trail that I haven’t hiked is getting further and further away, making it impossible to do weekend trips. Going to get harder.
  • Continue volunteering at Pennsbury Manor at their joiner’s shop (woodworking). Really enjoyed this.
  • Reduce weight by 20 lbs. from Jan 2019 (lost 2 lbs. in 2018). Again, I want to get in better shape as I get closer to financial independence
  • Read at least one book a month. I surpassed this goal in 2018, and re-learned the joy of reading.


  • Visit three national parks (that is the plan, right now)
  • Visit family in Tennessee, Vermont and New York. Family is very important to me. One of the things I am looking forward to with financial independence is the opportunity to visit family more often. Need to get up to see my brother in Vermont.
  • Take a week at the shore and just relax with family. Currently planned for July, but we’ll see how many family members can come.
  • Visit Ellis Island. Still want to do this – its so close. As 50% Czech from immigrant great grandparents from the turn of the century, I believe they went through there, and I want to see it

So those are my somewhat ambitious goals for 2019. I am going to do my best to hit them, so wish me luck.

What are your goals for 2019?

Mr. 39 Months

Look out for the “End of Year” status reports – version 2020!


Well, its that time of year, the end-of the old year, beginning of the new. What we can look forward to over the next 30 days is a list of the performance of various FI bloggers, and their goals for the new year. Some insights on how their investment strategies worked out, what frugal tips worked (and which ones didn’t), what travels they made, etc. Get ready for it!

While some might look down on this, or find it boring, I actually enjoy seeing the information shared by our community. I always try to take away 1-2 things from each annual review, and try to integrate some of them into my plans for the new year. I also write about my wins & losses, and what I’m planning for the next year. It could be “navel gazing” but it helps me work out my objectives and what lessons I learned. So here goes…..

We’ll start the series of blog posts off with how I did with my goals for 2019.

Financial Goals: Like most folks in 2019, we hit this “out of the park”

  • Save $80K in my tax-defered, Roth and regular investment accounts. Score A. The final total was a little over $86K, which is less than last year, but I cut back on money to my deferred account at work.  
  •  Increase dividend income to over $27K, so it covers 37% of a sample $72K/year standard of living (roughly what we are living right now). Grade A. Dividends were $29,406, or over 40%.
  • Beat new worth growth rate of 7% (I’ve averaged 6.1% over the last ten years). Grade A. Net Worth grew 20.1% to a little over $1.7M (only $300K of which is our home).

Business Goals

  • Begin attending regular meetings of my local Real Estate association. Grade F. Made decision at start of year to discontinue this.
  • Double the number of blog visitors in 2018. Grade F. Had 6,267 in 2018, and hit about the same number in 2019. Thanks to everyone who came & read, and especially those who commented. Going to (hopefully) do some more interesting writing in 2020.
  • Write/publish a book on finance. Grade F. Made almost no progress on this (only finished the outline). Need to start researching areas of the story. I’d like to make some progress on this in 2020.


  • Increase weight lifted by 10%. Grade A: Increased my weight lifted by 16.7% in 2019. I’ve hit a “wall” right now, and haven’t pushed up for several months now.
  • Average 3 hours of Cardio per week. Grade D. Life has made it difficult to hit the “3 hours per week goal” but I was able to hit about 2 hours fairly consistently.
  • Take part in one long bike ride (80+ miles). Grade F. Did not do
  • Backpack over 100 miles on AT. Grade C. Did around 80 miles. Its getting difficult to do this, because I’ve done just about all the hiking I can do in a half-day’s drive, so weekend trips are just about out. Probably will “walk down” the goal for 2020.
  • Reduce weight by 20 lbs. Grade F. Actually gained a couple of pounds from Jan 2019. Really need to work on this (like so many others New Year’s resolutions for 2020).
  • Read at least one book a month. Grade A. Again, really loving hitting this goal. The reading keeps me off the computer and from watching TV as much as I used to. Did 21 books in 2019. Already close to finishing one in Jan 2020.


  • Visit a National Park. Grade A. Hit one during trip to North Carolina (Smoky Mtn. National Park). Plans for doing three in California in 2020.
  • Visit family in Tennessee, New York and Vermont. Grade A. Saw family all over the place, though not as much in NY as I might have liked.
  • Week at the beach: Spent a week there with Mrs. 39 Months and had a great time. First time we ever really took a week off at the great New Jersey beaches. Going to repeat this with family in 2020.
  • Visit Asheville NC: Grade A. Had a good time, and Mrs. 39 Months enjoyed the Dulcimer festival while we were there.
  • Visit Ellis Island. Grade F. Did not visit
  • Go on an International Trip. Grade F. Didn’t travel internationally in 2019.

Like most folks, 2019 was a great year financially, really setting us up for FI. It was a mixed bag for Personal and travel goals. We did get a lot of things done, and I have some new ideas for business goals for 2020 that excite me. I’m very happy with how the year worked out. Hopefully you can all say the same!

Mr. 39 Months

Correction Coming? Timing the Market in 2020

I have written several times about the potential of timing the market, using a variety of methods. My favorite approach would be the one Ben Stein and Phil DeMuth came up with after the dot.Com blowup in 2000. I even went back and charted how I would have done if I had followed their advice since I had graduated (back in 1986 – yep, I’m an old man).

For a lot of folks, the giant returns of 2019 were a godsend after having suffered a downturn in 2018. It helped plump back up everyone’s retirement accounts and personal savings, and better place them for retiring early. Yet now there is that nagging fear that we’ll have a correction, and we will lose all those wonderful gains that we had. This also raises the specter of “sequence of return risk,” where you retire right as the market tanks (or stays flat for a decade+). So what is a person to do?

I looked at my “market timing” stats for 2019 and 2020 and here is what they said:

  1. Price (Current price of S&P500 vs 15 year trend): Jan 2019: No to stocks, Jan 2020: No to stocks
  2. P/E Ratio (Current S&P 500 P/E ratio vs 15-year trend): Jan 2019: Yes to stocks, Jan 2020: No to stocks
  3. Dividend yield of S&P500 vs 15-year average: Jan 2019: Yes to stocks, Jan 2020: No to stocks
  4. Earnings of S&P500 vs. AAA corporate bond (stock earnings “yield” vs. yield of AAA bonds): Jan 2019: Yes to stocks, Jan 2020: Yes to stocks

So in Jan 2019, 3 of the 4 indicators said to purchase stocks, while in Jan 2020, 3 of the 4 are saying invest in bonds. Looks to me like stocks aren’t set up to do great in 2020.

Now remember, these timing stats did not say to sell your stocks/bonds, they just say that for that period, you just concentrate your new purchases on the appropriate category.

As I’ve stated before, I’m a firm believer in the “buy and hold” strategy, keeping with your market allocation, and rebalancing regularly (for me every 6 months) in order to keep your allocation within your guidelines. While some folks may have enjoyed higher returns over a set period of time, this method has met my objectives and allowed me to grow my net worth significantly.

So will there be a correction in 2020? In almost every election year, the market has done OK (with the exception of 2008, when it melted down spectacularly). However, I’ve been growing my net worth at an average of 6.1% per year for the last 14 years – and based on that I would need my investments to lose 9.5% in 2020 in order to maintain that 6.1% growth rate. Take of that, what you will.

My thought is that 2020 will be a “net 0” year, with limited gains in the market. Stocks are overpriced if you look at the metrics above, so it will take them some time for the profits to catch up with the price. My intention is to “stick with the plan” of investing regularly, keeping my allocation, and rebalancing.

What are you plans for 2020?

Mr. 39 Months