Crying Over Spilled Milk or What to Do if You Missed the Stock Market Rally

Crying over spilled milk is an adage most of us first heard at a young age. Minor inconveniences are blown out of proportion when they happen. Eventually someone says you should stop crying over spilled milk

We’re living a spilled milk event as I write. The stock market and the economy have been growing steadily for about eight years now. Constant media covered convinced a large percentage of the population things were dire. We were scared shi+less and tucked our hard-earned money in the mattress. There was no way you would be tricked into investing in a bad economy.

The years kept rolling by as the economy ticked ever higher with the stock market in tow. You not only kept your powder dry, you spent a large portion of it (a 100% loss) and kept the rest in a 0%, or nearly so, bank deposit.

Now the media says everything is good news. The economy and stock market have bent heavy to the left as it heads for the stars.

Tax cuts will stimulate an economy at or near full employment. Things have got to be good. They have to be!

You missed the bitcoin craze, but you refuse to be left behind again. This is it! You’re going to do it. You’re going to jump into this high flying market for your share of the bounty even if you have to borrow to do it.

The Road Well Traveled

You might not believe it, but I’ve seen this storyline play out before. The last time we saw tax cuts of this size the DJIA was under 800 (that is NOT a typo). The year was 1981. Inflation and unemployment were both double digits and draconian measures were needed as the economy was heading into the back leg of a double recession.

By 1987 the party was in full swing before a sunny day in October refocused attention on reality. In a few years the market was at new highs again and all was good.

The dotcom bubble — like the Nifty Fifty of the early 1970s — promised a brave new world of ever increasing profits. Then the century turned and so did the market.

The beginning of the current run started in 2009 with people screaming the world was coming to an end and the sky was falling. The ugliness started a year or so earlier.

In each case the market found a bottom, the world went along just fine and the market eventually made new highs.

We had the Nifty Fifty of the 70s, the tax cuts of the 80s, the dotcom world of the late 90s, and the housing bust of 2008. Now we are back to tax cuts, low inflation, low unemployment and a market promising to rise every day as if the Lord promised it himself.

So now you’re ready to invest.

Reality Check

I’m the last guy to tell you to time the market. This thing could rock for longer than anyone expects. What is certain is the day will come when it will stop going up temporarily. That is the day greed turns to fear. And fear is a far more powerful emotion than greed.

If you stayed out the stock market the last ten years I have a suggestion. Don’t invest now! This is not a market timing call either!

The market direction or conditions should have a relatively small bearing on your decision to consistently invest.

After all these years of economic and market growth and only now you think it’s the right time to invest? If this is true you don’t have the temperament to invest in equities (stocks, mutual funds, index funds or ETFs). Buying because everyone is talking about it is insanity!

My granddad was a farmer who saved at an insane rate. The guy tucked away in the neighborhood of 70% of his income. When he hit retirement age his saved half or more of his Social Security check! (You read that right.) He even took a part-time job to fill his days when he was in his 70s and 80s and saved the entire take-home pay!

I always called granddad Doc because he always studied natural healing. Doc is a value lesson in today’s market.

Doc invested about 10% of his money at AAL, now Thrivent, the Lutheran investment house. The rest of his money sat in several banks. He had CDs, money markets, savings accounts and some land.

The 1929 stock market crash was etched into his young mind. He was born in 1922. The Great Depression colored his opinions on money.

Doc understood guaranteed money. Banks offered guarantees up to the FDIC limits. My dad convinced Doc to put at least something in the broad market. Only the investment house connected to the church could be trusted.

Better Safe than Sorry

Putting money in the bank is not a good way to build your net worth fast. Regardless, he managed a sizable (seven figures) of liquid net worth before the farming world collapsed and he lost most of his money trying to save the family farm.

Undeterred, Doc went back to what he knew worked. He started filling bank accounts again and had another seven figures liquid by the time he died.

To recap, Doc spent a lifetime building a seven figure liquid net worth, lost it in the farming crisis of the early 1980s, kept saving all he earned, put maybe 10% in a rip-roaring market, put the rest into bank deposits and had seven figures liquid again when he died ~ 10 years ago.

Not Cowardice

People are passionate about the market as I write. Netflix in the last month alone went from 187 to 272. From top to bottom this is a 45% gain. This is rare for any company to accomplish, but even more significant from a company slated to burn up to $4 billion in negative free cash flow this year!

Coupled with the recent bitcoin craze and people are primed for action. It has the feel of a casino! (As a reminder, the house always wins.)

There are only two mistakes that will kill you in the market. The first is getting enticed into buying when everything looks perfect and the market is parabolic. And second, getting scared out of the market when the market is suffering a gut wrenching decline.

Most people fail at investing because they trade the market. Emotions WILL get the best of you if you PLAY the market. Doc knew his emotional readiness and did what any smart man would: put his money in guaranteed bank deposits.

If you’ve been investing a portion of your income every month you have the emotional stability to weather the inevitable storm. (Or the intelligence not to look at your retirement account balance.)

Now is not the time to get brave and jump into the stock market. Even if you use index funds or ETFs. Odds are there will come a day soon when painful reality sets in temporarily. The last thing you want to do is buy now and find yourself waiting a few years for a new market high. Or worse, selling at the low due to fear.

Borrowing money to invest in stocks is the worst! You could find yourself forced to sell as the market declines if you buy with debt. DON’T DO IT!

Dos and Don’ts

Missing the current market rally is spilled milk. Chasing the market is a crazy idea. Here are a few dos and don’ts to consider in today’s investing environment:

DO —

  • Use index funds or ETFs
  • Keep investing in your work retirement plan at least to the matching level and to the maximum if you have the mental and financial will to do so
  • Keep calm
  • Stay the course. Stay invested and keep automated investing active. You and I both don’t know where the market will be over the short term so stay the course. The long game is higher


  • Panic
  • Borrow money to invest
  • Try to time the market by selling
  • Listen to the media hype. Wall Street loves the hype so they can sell to the greenhorns as the market weakens
  • Get too excited about your account balance. Those just hitting their FI (financial independence) goal might want to consider sticking around a while long as the FI number is built on a market spike higher with a real possibility these numbers could temporarily decline
  • Listen to your hairdresser, taxi driver, Uber driver, buddy at the bar, mailman, or even your accountant on hot stock tips
  • Look at your account daily


Young investors have it worst. They haven’t experienced one of these cycles before. The last real market decline was a decade ago!

This isn’t new either. Every 10 -15 years we rinse and repeat. Each cycle is slightly different while humming the same tune.

Investing, even in a hot market, isn’t necessarily a bad idea. Doing crazy stuff and getting greedy is!

No borrowed money for investments in the market! If you have a regular investment plan, keep it. Your investments will ride out the storm when it comes along. If you haven’t invested yet, now is not the time to be brave. Bravery is easy now because the feeling you have is really FEAR you’ll miss out.

The steady hand will always win in the end. Warren Buffett tells us to be fearful when other are greedy and greedy when others are fearful. Greed is rampant now so a healthy dose of fear is warranted.

Steady, kind readers. Steady.


Keith Taxguy


  1. Andrew MacDonald on January 26, 2018 at 8:56 am

    Great article. There are a lot of threads showing up in the bogleheads forum about the over priced market and when to get in. One thing I always say when replying to the thread is, “Time in the market is better than timing the market.” People were saying the same things back in 2013 and look what happened.

    Have an asset allocation based on your risk tolerance and goals and will help you sleep better at night. Ignore the noise, stick to your plan, max your retirement accounts every year if possible, keep costs low, use index funds and rebalance once a year.

    • Keith Schroeder on January 26, 2018 at 8:59 am

      I love that, Andrew!

      Time in the market is better than timing the market.

      Well said.

  2. shawn devooght on January 26, 2018 at 9:19 am

    its a very interesting time and i agree with everything you said above. tax rate cuts, historically low interest rates(although rising)- wall street could continue to go up for a long time making a fool out of all who said be cautious. Stocks could tank tomarrow with the largest freefall ever in history. my philosophy is to not let the headlines affect me and remember that p and e’s will always revert to the mean eventually. of course thats a generalization or oversimplification of my strategy used to make a point. we could see double digit gains again in 2018 but i think it will all get paid back in the downturn.

  3. Charles on January 26, 2018 at 10:07 am


    What a timely article!

    I have just received a lump sum of money in the amount of $887,000,00.

    My wife and I have no debt at all, jobs in the public sector with pensions , stable and high income and a portfolio at Vanguard in low cost index funds.

    We save half of our income. And this money isn’t needed in the short or long term.

    We have up to this day continually invested in our funds regardless of the what’s happening on Wall Street through our 457’s.

    I was ready to lump sum this into VTSAX but your article gave me pause. On one hand I would love to wait for that inevitable correction but of course we don’t know when that will happen.

    What would you do if you were in my shoes.? Wait it out or lump sum in at today’s prices.

    I value your opinion and need another perspective from another successful investor.

    I realize you don’t have a crystal ball but between your opinion and the opinion of others,it will help me arrive at my own.

    Thanks !

    • Keith Schroeder on January 26, 2018 at 10:39 am

      Tough question, Charles. I did expect a reader or two to have this kind of situation.

      First, you always maxed out your investments so I’m inclined to say stay the course with the lump sum. Any pullback, even a serious one, is only a temporary event.

      You then ask what I’d do in your shoes. I hate chasing a hot market and this is the hottest market I’ve ever experienced, rivaling the dotcom run of the late 90s. If it was me I’d drop the lump sum into my Capital One 360 account earning a whopping 1.4% and dollar cost average the lump sum into the market (Vanguard index funds). Because the market is parabolic right now I wouldn’t invest any of the funds right now. (This is me and I’m willing to forgo some hyper market gains for long-term growth.) I’d DCA over 24 months starting a few months out. If the market has any meaningful decline I’d accelerate the transfer to index funds.

      I have no intention of trying to pick a bottom (or top). But with a market never going down it’s only a matter of time before a reality check arrives.

      As an FYI, these kinds of markets don’t necessarily decline all at once. In the 1980s the market had scary one-day to a week decline before resuming the upward climb. That is until August of 1987 when the market started to fall until it collapsed in October.

      This is a tax cut driven market similar to the one in the 1980s. I expect similar results.

      If you are patient the market will serve you well. Whether you invest it all now or DCA over a year or two, the final result decades out will be background noise. Regardless your choice, you should refrain from kicking yourself if the market takes a different course. Have a plan and stick to it.

      I don’t care if you drop it all in now or over a year or two. What I DO care about is that you don’t sell at a market low worried the world is ending.

      Hope this helps, Charles.

      • Andy on January 28, 2018 at 5:08 pm

        Just my opinion. So what if this bull goes on for another 5 years and you still have e that $800k sitting on the sidelines?

        Let the power of compounding start doing it’s job asap. Long term these short term bulls and beats don’t matter.

        • Keith Schroeder on January 28, 2018 at 6:20 pm

          Remember my advice, Andy: Consider paying down or paying off the student loans, then dollar cost averaging into the market over 24 months.

          There are some things we know for certain. Netflix can’t climb 45% per month (as it did in January) for another five years. I tried to run NFLX through a future value calculator and it didn’t work because the number was too big. 45% x 60 months is a really big number. My guess is at that rate NFLX would exceed the value of the world economy.

          The DJIA rallied ~ 2,000 points in the past month, ~ 12%. At that pace the DJIA would reach 23.8 million in five years.

          The market is parabolic. To consider dumping it all in the market now means you think this time is different. I’d rather miss an opportunity than lose money!

          Remember Warren Buffett’s two rules of investing:

          1.) Never lose money.
          2.) Refer to Rule 1.

          • Froogal Stoodent on January 29, 2018 at 10:58 pm

            Interesting conversation! I’d add:

            1) If you have any debts, pay them off now!
            2) If you’re anticipating a looming dip in the market (as I am), you might consider putting most of that (say, 80%, or about $700k) in a bond fund like VBTLX–it’s lower risk, but the tradeoff is more modest growth. Once the correction has bottomed out and is starting to make its way back up, you’ll be ready to roll most of that sum into VTSAX and ride the wave back up.

  4. MB on January 26, 2018 at 11:00 am

    Good article. Particularly like the do’s and dont’s.

    It will be interesting to see how many FIRE bloggers will disappear when a major market correction occurs. Have a feeling only the die-hard/already long term/or diversified bloggers will make it through a long stretch. It’s easy to blog about the 4% SWR when everyone can see the positive returns. Getting traction in a negative return environment will probably be substantially tougher.

    • Keith Schroeder on January 26, 2018 at 11:10 am

      MB, I’m worried about the people giving a shout-out they reached their FI number recently. Frugality will come back in vogue if it’s a prolonged decline accompanied by a recession. I would expect a lot of these Camps popping up around the country will decline, too.

      Most bloggers in this demographic haven’t lived through even one of these events. As one of the few old guys around the block for a few decades I am planning how I will address this to my readers when real fear sets in. MMM understands personally, but his blog started closer to the last bottom so his readers may not. His readers also haven’t seen his advice live when market fear sets in.

      When the time is right I’ll share my experiences (and hopefully, wisdom) on living with and dealing with the issues as they set in.

      • MB on January 26, 2018 at 11:53 am

        Yeah, it’s the bloggers that have declared flex-FI that boggles my mind. (Like FI-180)

        Pete definitely gets my kudos and respect for FI-right before the recession. The fact that he transitioned into work he enjoyed I am sure helped the transition.

        Looking forward to your upcoming content on frugality. Always like to see your brain on how you optimize your household.

  5. Dave on January 26, 2018 at 11:40 am

    Good article. I am one of the old guys that you refer – early 50s. Like you (Keith), I lived through the dot com bubble and it made me realize how risk averse I am. My biggest challenge now is realizing that I am my own worst enemy when it comes to investing enough in the market to ensure that the portfolio grows effectively so as not to be destroyed by inflationary forces over time. I am still going to be very conservative as that is how I can ensure I stick with a plan. However, I can’t get my head around investing new $ into this market as it is too much like what we saw in the late 90s – early 2000. I was glad to see your recommendation to Charles about parking the funds in a Capital One account until we see some cooling off of the market. As we know, until you live through a real downturn, you don’t really know your risk tolerance. Thanks for the ongoing good insights!

  6. jim on January 26, 2018 at 11:58 am

    Great article. My frustration is that I am 31, and my wife and I have just gotten our debt to a level in which we can actually start to invest enough to probably max out our 401k accounts this year versus only putting the matching amount in the account the past few years. Its both depressing and rewarding to know that even with the minimal investments, our matching is worth 50k now due to the run up in the market. My question is do you think I should put smaller amounts in my 401k now and larger deposits towards the end of the year? I’m not crying over spilled milk, but it is frustrating to finally have the cash flow to invest, and realize that the market has exploded. Student loan debt is our second largest payment after our mortgage, which is 1200 a month. Our minimum payment is 700, but we try to pay 1000, because the interest rate is at 8%. We’ve tried the private student loan companies, but they only offered .25% less interest rates, and we lose our ability to defer payments for things like maternity leave and injury/illness. I wish you would do an article on the student loan crisis, and what I personally believe will be the next “housing crisis,” with what I think will be similar declines in the market. The student loans given to us by our beloved Uncle Sam have been our largest adversary. People always look at us and think “they make so much money” but they have no Idea our student loan payment, that we have to pay for our own insurance, that we get taxed by a progressive tax system, so in the end somebody making 40K and living on government assistance for housing, food, insurance, electricity, and heat assistance, actually nets pretty much exactly what we do working full time with 2 jobs.

    • Keith Schroeder on January 26, 2018 at 12:10 pm

      Jim, I would stay the course. Since my crystal ball is as cloudy as everyone else’s I can’t tell you to wait or invest now. It boils down to your emotional ability to handle risk, something hard to grasp until you live through it once or twice. Dave’s comment shares his enlightenment towards risk when he lived through the dotcom collapse.

      One thing that makes sense to me is that the market will probably not have a greater than 8% annual return looking back five years from now so accelerating student loan payments probably yield a better return. Paying off debt is always a wise choice with rare exception. Even if I’m wrong you still have less debt and don’t pay 8% interest on the retired portion.

      I don’t like the idea of slowing 401(k) contributions now and accelerating them at year-end. This all assumes your market timing is accurate, a claim I refuse to make.

      • Rachel on January 26, 2018 at 1:55 pm

        I agree with Keith on this one. As someone burdened by student loan debt myself, pay off those 8% loans. I would only do the 401k up to the match. If the market crashes tomorrow, you can always change your plan a bit.

        I’m curious though, what companies are only offering you .25% better than 8%? I have re-fi’d my loans several times, from 6.8% to 5.5%, and am currently working on 4.1%. Are there credit issues or whatnot holding you back? If so, you might want to attack those as well. I also want to say you do not have to refi all your loans all at once. You can do 1-2 at a time, in case you are worried something will happen and you’ll lose the federal benefits on the rest. Most of the refi companies have about a 10k minimum, so judging by your payments, you can parse them out a bit.

    • Mike on January 27, 2018 at 5:03 am

      I am going to reiterate Keith on this.
      Paying down 8% student loans is a GUARANTEED 8% return. The equivalent of purchasing 8% treasuries. It’s most likely better if you income is high or your student loans are large (over $2500 int /yr).

      If I were you I would contribute to my 401K up to the match and then do every thing I could (short of robbing a liquor store) to pay these off as quickly as possible. Rice and Beans.

      Hypothetical question for Keith.
      If you were given the opportunity to buy 30 year 8% US Treasuries this very day would you sell everything you have and put your entire investible net worth in them??

      • Keith Schroeder on January 28, 2018 at 6:34 pm

        I wouldn’t put “everything” in Treasuries, Mike, but I would certainly move some funds that direction. In the back of my mind I know broad stock indexes climb an average 7% per year plus inflation. Knowing this I would consider some long-term bonds in my portfolio starting at 7%. As the rate climbed I’d increase the % of my portfolio in LT Treasuries.

  7. Charles on January 26, 2018 at 12:58 pm


    Thanks for the feedback.

    Last night in anticipation of lump summing today, I read an article you wrote in December for encouragement.

    You focused on the accumulation of share versus the account value. And as long as the price didn’t go to zero, the shares just keep growing with dividends reinvested.

    Either way I’ll be okay in the long run. Whether I DCA or lump sum. Or do a combination of both.

    Having some liquidity will be nice for when the ticker is showing -330.67.

    I agree with your concerns. People are treating the market like a casino and some are repeating mistakes of the past thinking the market only goes up.

    I’ve had a co-worker who doesn’t even contribute to our low cost 457 plan ask me how to open a brokerage account. He did and bought Bitcoin and Cannabis stocks!

    These will be the same people that will run for the exits once the decline happens. They get in for fear of missing out and then bail for fear of losing out.

    Thanks again for the feedback, much appreciated.


  8. Mike on January 27, 2018 at 5:11 am

    I’ve read similar articles every year for the last 4-5 years. Maybe you have called the top with this one but as you stated it’s best not to time the market.
    Keith, I love your stuff and agree with 98% of everything you say but this article does encourage market timing at least at a minor level.

    • Keith Schroeder on January 27, 2018 at 8:24 am

      Maybe a bit of market timing, Mike. What I meant to say was, I back away from things when I don’t understand them and this market has left me clueless. The hair on the back of my neck has served me well over the years financially.

  9. Guy on January 27, 2018 at 9:23 am

    Well said …. “Don’t look at your account daily.”

  10. Ron on January 27, 2018 at 1:23 pm

    Agreed, excellent advice; however, it’s also worth reminding people to rebalance if their asset allocation has gotten out of whack. Take me for example, my equities have drifted 14% higher than planned. Will I succumb to greed and adjust my risk tolerance only to regret it later or will I have the discipline to sell 14% of my equities with the associated capital gains bill? I suspect a large percentage of investors are in the exact same boat.

    • Keith Schroeder on January 27, 2018 at 3:47 pm

      I agree, Ron. Rebalancing a portfolio is acceptable and not timing the market in my opinion.

  11. Jason on January 28, 2018 at 7:49 pm

    I wholeheartedly agree with this sentiment save for the fact I don’t think it would be bad for someone to invest, but they do it slowly. They learn. They do, as you pointed out to the one person, pay down debt and dollar cost average. And if they can’t stomach losing 10% or 20% then they shouldn’t be in the market anyway, at least until they learn. Maybe that involves a balanced fund or something more conservative, but someone should become much more familiar with the market before they invest.

  12. […] bloggers, Keith at The Wealthy Accountant, wrote an excellent article highlighting the need to Steady The Course when new to investing especially in this current bull run. He always has some humor mixed with some […]

  13. Froogal Stoodent on January 29, 2018 at 11:10 pm

    This is a great point; if people haven’t noticed the Bitcoin bubble bursting recently after the massive run of hype in Dec. 2017, they should look at it and take a lesson from that. You’re right that it’s impossible to predict what’s going to happen in the market, but the fact that everybody’s talking about how great the market is doing should set off alarm bells.

    Joseph Kennedy famously observed that ‘when the shoeshine boy gives you stock tips, the market is too popular for its own good,’ so he took his money out and ran for the hills (see I’ve been getting a similar sort of feeling over the past several months. I don’t know when a correction is coming, but I’d bet a severe one will take place in 2018. I hope I’m wrong, but I suppose time will tell…

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