Author: Joseph M. Brennan Jr.

3RD EXECUTION OF MARKET-BASED BUY STRATEGY

Posted on by Joseph M. Brennan Jr.

For those who wanted to follow along, this will be the 3rd execution of my refined, structured Market-Based Buying Strategy for investing well with minimal effort: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/.

If you are a Very High Risk (VHR), High Risk (HR), Medium Risk (MR), or Low Risk (LR), investor, this post is for you – Very Low Risk (VLR) investors can wait and do nothing if you want. If you aren’t sure what your investment risk category is, scroll down to the bottom of this post.

VHR/HR/MR/LR Investors: As of today’s close, the S&P 500 index dropped about 8.6% from its all-time high (a 3-5% drop in the S&P 500 index generally happens about three times a year and 10% drop generally happens about once every two years) – so if it continues falling to around 551.5 for the SPY ETF or 5529 for the S&P 500 index (whichever you prefer to track – the drop doesn’t have to be very precise), you might consider buying:

a. VHR Investors might consider buying up to 100% of their overall investment account (or up to 100% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer).

b. HR Investors might consider buying up to 66.7% of their overall investment account (or up to 66.7% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer).

c. MR Investors might consider buying up to 30% of their overall investment account (or up to 30% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer). I forgot to include MR investors in my previous post during the 2nd execution of this strategy which I will update shortly – so MR investors should probably immediately buy 15% of their overall investment account (or up to 15% of the cash available to invest) and buy the remaining 15% if the S&P 500 index falls further.

d. LR Investors might consider buying up to 10% of their overall investment account (or up to 10% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer).

I anticipate there could be an even more substantial decline in the overall S&P 500 index, but I could be wrong – and the longer and the deeper the drop you wait for, the greater the likelihood you’ll miss the rebound. So, investors in the above risk categories might want to get ready to buy – VLR investors might be more inclined to take their chances by waiting for a deeper drop. It’s your financial future so do what you think is best for you.

I currently track five major market index ETFs: S&P 500 index (e.g., SPY ETF), the Nasdaq (e.g., QQQ ETF), a Mid-Cap Stock Index ETF (e.g., IJH ETF), Russell 2000 index (e.g., IWM ETF), and the EFA ETF (or something similar). The first four are major US-based indexes, while the last one tracks international stocks of developed countries outside the U.S. and Canada.

Of the above five major market index ETFs, the most attractive right now appears to be: IWM based on my analysis – which tracks the Russell 2000 index (I actually prefer the SPSM which is similar to IWM but only includes the profitable small businesses contained in the Russell 2000 index). As of today’s close, the IWM dropped 17.2% and the calculated EIRY is the highest among the highest across the 4 U.S. index ETFs I track – at 7.42%. The IWM is not without risk, however. In a slowing economy, the IWM tends to drop the fastest and the deepest but usually rebounds sharply at some point. So, if you are very concerned about a potential slowing economy, then you might want to choose a different index to invest in or split your investment across different indexes. The next best index ETF overall is the IJH ETF.

Feel free to start buying in one or more of the aforementioned major market index ETFs if the S&P 500 continues to fall and you are a VHR, HR, MR, or LR, investor. You can use the ones specifically above or use a different one that is similar. Just ensure the fees are at least as low as the ones identified above when buying.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond!).

selfimprovement #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket

==== INVESTMENT RISK CATEGORIES ====

Important Note: When adding up what you have across your investment accounts, I recommend making the following adjustment for pre-tax type investment accounts (e.g., 401Ks and IRAs without the word “Roth” attached): reduce the total amount by 24% for a conservative overall estimate. We have to pay taxes when withdrawing from these kinds of accounts so this will help to account for that. Feel free to use a different percentage reduction depending on what tax bracket you believe you will fall into when withdrawing money from these accounts.

VERY HIGH-RISK INVESTOR (your investment goal is 8+ times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k or less in total across your investment accounts then you would be a very high-risk investor.

HIGH-RISK INVESTOR (your investment goal is roughly 4-8 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k-$500k in total across your investment accounts then you would be a high-risk investor.

MEDIUM-RISK INVESTOR (your investment goal is roughly 2-4 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $500k-$1M in total across your investment accounts then you would be a medium-risk investor.

LOW-RISK INVESTOR (your investment goal is roughly 1-2 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $1M-$2M in total across your investment accounts then you would be a low-risk investor.

VERY LOW-RISK INVESTOR (what you presently have in total across your investment accounts equals or exceeds your investment goal – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $2M or more in total across your investment accounts then you would be a very low-risk investor.

☆°▪︎ SUMMER’S AUTUMN (AGED IN GRAY) ▪︎°☆

Posted on by Joseph M. Brennan Jr.

Intro:

We

played

.

u

p

o

n

.

the

sands . . .

–

–

–

.

.

.

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played

.

u

p

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n

.

the

sands . . .

–

–

–

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.

.

o

f

–

–

–

sandcastle

days . . .

–

–

–

.

.

.

.

warmed

.

b

y

.

the

golden

grace

.

o

f

.

endless

summer

rays . . .

–

–

–

.

.

.

 ~ warmed

.

b

y

.

the

golden

grace

.

o

f

.

endless

summer

rays . . .

–

–

–

.

.

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played . . .

–

–

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.

.

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played . . .

–

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played . . .

–

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.

.

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sands

.

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sandcastle

days . . .

–

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.

.

.

 ~ of

sandcastle

days . . .

–

–

–

.

.

.

forever

swept

away . . .

–

–

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.

.

.

b

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–

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wagering

waves . . .

–

–

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.

.

.

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.

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wagering

waves . . .

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–

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.

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coming . . .

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breath . . .

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.

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beyond

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bend . . .

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.

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.

summer’s

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.

when

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.

summer’s

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made

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.

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.

.

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.

love

.

i

n

.

gray . . .

–

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.

.

.

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love . . .

–

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.

.

.

pushing

deeper,

.

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deeper,

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shade . . .

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there

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trace . . .

–

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.

.

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there

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more

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save . . .

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.

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.

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.

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game . . .

–

–

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.

.

.

deeper,

.

.

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n

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.

.

deeper,

.

.

a

n

d

.

.

deeper,

.

.

i

n

t

o

.

.

gray . . .

–

–

–

.

.

.

until

there

.

w

a

s

.

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more

.

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o

.

save . . .

–

–

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.

.

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more

.

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o

.

say . . .

–

–

–

.

.

.

 ~ there

.

w

a

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.

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more

.

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.

save . . .

–

–

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.

.

.

a

n

d

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more

.

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.

say . . .

–

–

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.

.

.

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played

.

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.

game . . .

–

–

–

.

.

.

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played

.

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h

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.

game . . .

–

–

–

.

.

.

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played

.

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.

game . . .

–

–

–

.

.

.

i

n

–

–

–

the

shade . . .

–

–

–

.

.

.

a

n

d

–

–

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now

there

.

i

s

.

no

escape . . .

–

–

–

.

.

.

There

.

i

s

.

no

escape

.

f

r

o

m

.

the

blame . . .

–

–

–

.

.

.

There

.

i

s

.

no

escape

.

f

r

o

m

.

the

shame . . .

–

–

–

.

.

.

a

n

d

–

–

–

There

.

i

s

.

no

escape

.

f

r

o

m

.

the

pain . . .

–

–

–

.

.

.

o

f

.

.

.

a

.

l

o

v

e

.

aged

.

i

n

.

gray.

Reflection:  This is a romantic-themed poem that I wrote in March of 2025 where the contemplator looks back on a youthful, passionate courtship that could have been a wonderful, longstanding romance which ended primarily due to naivety, inexperience, and petty disagreements and behaviors. We get the feeling he/she would love to start again but the accumulating changes and distance over the years seem to prevent that from happening. I wrote most of this poem by listening to two wonderful songs: “Hotel Womb” and “Lost” by The Church which I played in the background to create the “moodset” and inspire the writing of the poem. If you listen to these songs at low volume while reading this poem, you might better get the “feel” of it. I used to love album “Starfish” by The Church and started listening to it again – these two songs were favorites of mine as were so many others on this amazing album.

2ND EXECUTION OF MARKET-BASED BUY STRATEGY

Posted on by Joseph M. Brennan Jr.

For those who wanted to follow along, this will be the second execution of my refined, structured Market-Based Buying Strategy for investing well with minimal effort: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/.

If you are a Very High Risk (VHR), High Risk (HR), or Medium Risk (MR) investor, this post is for you – investors of all other risk categories can wait and do nothing if you want. If you aren’t sure what your investment risk category is, scroll down to the bottom of this post.

VHR/HR/MR Investors: As of today’s low earlier today, the S&P 500 index dropped about 6.4% from its all-time high (a 3-5% drop in the S&P 500 index generally happens about three times a year and 10% drop generally happens about once every two years) – so if it continues falling to around 567 for the SPY ETF or 5683 for the S&P 500 index (whichever you prefer to track – the drop doesn’t have to be very precise), you might consider buying:

a. VHR Investors might consider buying up to 100% of their overall investment account (or up to 100% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer).

b. HR Investors might consider buying up to 33.3% of their overall investment account (or up to 33.3% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer).

c. MR Investors might consider buying up to 15% of their overall investment account (or up to 15% of the cash available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer).

I anticipate there could be an even more substantial decline in the overall S&P 500 index, but I could be wrong – and the longer and the deeper the drop you wait for, the greater the likelihood you’ll miss the rebound. So, VHR and HR investors might want to get ready to buy – other investors might be more inclined to take their chances by waiting for a deeper drop. It’s your financial future so do what you think is best for you.

I currently track five major market index ETFs: S&P 500 index (e.g., SPY ETF), the Nasdaq (e.g., QQQ ETF), a Mid-Cap Stock Index ETF (e.g., IJH ETF), Russell 2000 index (e.g., IWM ETF), and the EFA ETF (or something similar). The first four are major US-based indexes, while the last one tracks international stocks of developed countries outside the U.S. and Canada.

Of the above five major market index ETFs, the most attractive right now appears to be: IWM based on my analysis – which tracks the Russell 2000 index (I actually prefer the SPSM which is similar to IWM but only includes the profitable small businesses contained in the Russell 2000 index). As of today’s low, the IWM dropped 16.2% and the calculated EIRY is the highest across the 4 U.S. index ETFs I track – at 7.25%. The IWM is not without risk, however. In a slowing economy, the IWM tends to drop the fastest and the deepest but usually rebounds sharply at some point. So, if you are very concerned about a potential slowing economy, then you might want to choose a different index to invest in or split your investment across different indexes.

Feel free to start buying in one or more of the aforementioned major market index ETFs if the S&P 500 continues to fall and you are a VHR, HR, or MR investor. You can use the ones specifically above or use a different one that is similar. Just ensure the fees are at least as low as the ones identified above when buying.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond!).

selfimprovement #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket

==== INVESTMENT RISK CATEGORIES ====

Important Note: When adding up what you have across your investment accounts, I recommend making the following adjustment for pre-tax type investment accounts (e.g., 401Ks and IRAs without the word “Roth” attached): reduce the total amount by 24% for a conservative overall estimate. We have to pay taxes when withdrawing from these kinds of accounts so this will help to account for that. Feel free to use a different percentage reduction depending on what tax bracket you believe you will fall into when withdrawing money from these accounts.

VERY HIGH-RISK INVESTOR (your investment goal is 8+ times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k or less in total across your investment accounts then you would be a very high-risk investor.

HIGH-RISK INVESTOR (your investment goal is roughly 4-8 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k-$500k in total across your investment accounts then you would be a high-risk investor.

MEDIUM-RISK INVESTOR (your investment goal is roughly 2-4 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $500k-$1M in total across your investment accounts then you would be a medium-risk investor.

LOW-RISK INVESTOR (your investment goal is roughly 1-2 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $1M-$2M in total across your investment accounts then you would be a low-risk investor.

VERY LOW-RISK INVESTOR (what you presently have in total across your investment accounts equals or exceeds your investment goal – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $2M or more in total across your investment accounts then you would be a very low-risk investor.

1ST EXECUTION OF MARKET-BASED BUY STRATEGY

Posted on by Joseph M. Brennan Jr.

For those who wanted to follow along, this will be the first execution of my refined, structured Market-Based Buying Strategy for investing well with minimal effort: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/.

If you are a Very High Risk (VHR) investor, this post is for you – investors of all other risk categories can wait and do nothing if you want. If you aren’t sure what your investment risk category is, scroll down to the bottom of this post.

VHR Investors: The S&P 500 index has dropped about 4.6% from its all-time high (a 3-5% drop in the S&P 500 index generally happens about three times a year) – so if it remains at its present level (~583 for the SPY ETF or ~5862 for the S&P 500 index – whichever you prefer to track) or drops further, you might consider buying up to 50% of your overall investment account (or up to 50% of the cash you have available to invest) into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer). I anticipate there will be a more substantial decline in the overall S&P 500 index, but I could be wrong – and the longer and the deeper the drop you wait for, the greater the likelihood you’ll miss the rebound. So, VHR investors might want to go ahead and buy – other investors might be more inclined to take their chances by waiting for a deeper drop. It’s your financial future so do what you think is best for you.

I currently track five major market index ETFs: S&P 500 index (e.g., SPY ETF), the Nasdaq (e.g., QQQ ETF), a Mid-Cap Stock Index ETF (e.g., IJH ETF), Russell 2000 index (e.g., IWM ETF), and the EFA ETF (or something similar). The first four are major US-based indexes, while the last one tracks international stocks of developed countries outside the U.S. and Canada.

Of the above five major market index ETFs, the most attractive right now appears to be: EFA based on my analysis (it has fallen only 3.6% from its all-time high though so it hasn’t fallen by much – and the calculated EIRY (8.84%) is the highest across the 5 indexes I track. This is primarily due to the 3.09% dividend which is much higher than the other indexes). However, the EFA (or IEFA which is the one I like since the fees are lower) has currency exchange risk since it is not US-based, can be impacted by the current administration’s trade policy, and this index ETF has tended to lag the U.S. market indexes in recent years. So, there is risk although it looks attractive in my present opinion. If you prefer investing in a US-based index ETF, or prefer to split your investment between the EFA/IEFA and these other index ETFs, the most attractive US-based index ETF right now appears to be: IWM which tracks the Russell 2000 index (I actually prefer the SPSM which is similar but only includes the profitable small businesses contained in the Russell 2000 index). The IWM has dropped 12.4% and the calculated EIRY is the highest across the 4 U.S. index ETFs I track – at 7.1%.

IMPORTANT 28 FEB UPDATE: I updated my formulas to place much more weight on the percentage drop and combining that with the EIRY. Based on making this change the IWM ETF (or the SPSM which is my preference) is the best option overall – not the EFA ETF.

So, feel free to start buying in one or more of the aforementioned major market index ETFs if you are a VHR investor. You can use the ones specifically above or use a different one that is similar. Just ensure the fees are at least as low as the ones identified above when buying.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond!).

selfimprovement #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket

==== INVESTMENT RISK CATEGORIES ====

Important Note: When adding up what you have across your investment accounts, I recommend making the following adjustment for pre-tax type investment accounts (e.g., 401Ks and IRAs without the word “Roth” attached): reduce the total amount by 24% for a conservative overall estimate. We have to pay taxes when withdrawing from these kinds of accounts so this will help to account for that. Feel free to use a different percentage reduction depending on what tax bracket you believe you will fall into when withdrawing money from these accounts.

VERY HIGH-RISK INVESTOR (your investment goal is 8+ times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k or less in total across your investment accounts then you would be a very high-risk investor.

HIGH-RISK INVESTOR (your investment goal is roughly 4-8 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k-$500k in total across your investment accounts then you would be a high-risk investor.

MEDIUM-RISK INVESTOR (your investment goal is roughly 2-4 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $500k-$1M in total across your investment accounts then you would be a medium-risk investor.

LOW-RISK INVESTOR (your investment goal is roughly 1-2 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $1M-$2M in total across your investment accounts then you would be a low-risk investor.

VERY LOW-RISK INVESTOR (what you presently have in total across your investment accounts equals or exceeds your investment goal – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $2M or more in total across your investment accounts then you would be a very low-risk investor.

☆°▪︎ ACROSS THE LINES AND DIVIDES (LET IT SHINE) ▪︎°☆

Posted on by Joseph M. Brennan Jr.

Intro:

There

.

w

a

s

.

warmth,

.

.

a

n

d

.

.

hope,

.

.

a

n

d

.

.

promise

.

t

h

a

t

.

melted

.

t

h

e

.

sleet

.

a

n

d

.

snow

.

f

r

o

m

.

the

roads . . .

–

–

–

.

.

.

.

 ~ they

melted

.

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.

sleet

.

a

n

d

.

snow

.

f

r

o

m

.

the

roads

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f

.

the

soul,

.

.

t

h

a

t

.

.

freely

go

.

w

h

e

r

e

.

brighter

futures

glow . . .

–

–

–

.

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.

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s

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time

.

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o

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put

.

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all

behind . . .

–

–

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.

.

.

 ~ it

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time . . .

–

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time

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open

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skies

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sunshine . . .

–

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to

let

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shine . . .

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 ~ it

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time . . .

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let

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shine . . .

–

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t

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–

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smiles

across

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lines

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divides . . .

–

–

–

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the

divides

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lines . . .

–

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day

.

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d

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night . . .

–

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high

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wide . . .

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smile . . .

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smile . . .

–

–

–

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.

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Let’s

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o

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d

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hands

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n

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smile . . .

–

–

–

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.

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across

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divides . . .

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days

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nights . . .

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across

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wides . . .

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mile . . .

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aisle,

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aisle,

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aisle . . .

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smile . . .

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smile . . .

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smile . . .

–

–

–

.

.

.

f

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r

–

–

–

now

.

i

s

.

the

time.

Reflection:  This is an inspiration/hope-themed poem that I wrote in February of 2025 for a time when love, and warmth, and hope really seemed to be needed. I wrote most of this poem by listening to the wonderful, fun, disco age song “The Hustle” by Van McCoy – a happy song that was first released on 18 May 1975 and seemed to point towards love, and warmth, and hope during a dark period of time in the mid-1970s; a dark period of time which seems to be echoed here today. I played this song in the background to create the “moodset” and inspire the writing of the poem. If you listen to the song at low volume while reading this poem, you might better get the “feel” of it.

☆°▪︎ SHADOWS AND GHOSTS (ALL ALONG THE ROAD BACK HOME) ▪︎°☆

Posted on by Joseph M. Brennan Jr.

The
snow
slows
.
b
u
t
.
never
.
l
e
t
s
.
go . . .
–
–
–
.
.
.

 ~ it
never
.
l
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.
go
.
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.
the
.
o
n
l
y
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road,
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.
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knows
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its
.
w
a
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back
home . . .
–
–
–
.
.
.

It’s
the
.
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l
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road,
.
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t
h
a
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.
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knows
.
its
.
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back
home . . .
–
–
–
.
.
.
a
n
d
–
–
–
still,
.
I
choose
.
t
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be
alone . . .
–
–
–
.
.
.

I
choose
.
t
o
.
be
alone . . .
–
–
–
.
.
.
t
o
–
–
–
avoid
.
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.
ghosts
.
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f
.
shadows . . .

–
–
–
.
.
.
a
n
d
–
–
–
the
shadows
.
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f
.
ghosts . . .
–
–
–
.
.
.

 ~ I
avoid
.
t
h
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.
ghosts
.
o
f
.
shadows . . .

–
–
–
.
.
.
a
n
d
–
–
–
the
shadows
.
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f
.
ghosts . . .
–
–
–
.
.
.
t
h
a
t
–
–
–
dance
with
.
t
h
e
.
echoes,
–
–
melancholy
.
memories
pose . . .
–
–
–
.
.
.
s
o
–
–
–
it
snows . . .
–
–
–
.
.
.

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snows . . .
–
–
–
.
.
.

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snows . . .
–
–
–
.
.
.

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snows . . .
–
–
–
.
.
.

It
snows . . .
–
–
–
.
.
.
a
l
l
–
–
–
over
.
t
h
a
t
.
road . . .
–
–
–
.
.
.

 ~ all
over
.
t
h
e
.
only
road,
.
.
t
h
a
t
.
.
knows
.
its
.
w
a
y
.
back
home . . .
–
–
–
.
.
.

It’s
the
.
o
n
l
y
.
road . . .
–
–
–
.
.
.

It’s
the
.
o
n
l
y
.
road . . .
–
–
–
.
.
.

It’s
the
.
o
n
l
y
.
road,
.
.
t
h
a
t
.
.
knows
.
its
.
w
a
y
.
back
home . . .
–
–
–
.
.
.
a
n
d
–
–
–
still,
.
I
choose
.
t
o
.
be
alone.

Reflection:  This is a melancholy-themed poem that I wrote in February of 2025 where the contemplator looks back on a past filled with haunting memories of abuse, heartbreak, sadness, emptiness, and loneliness. We get the feeling he/she seeks healing and consolation and contemplates returning home – but the sinking feelings that frequently accompany such memories prevent that from happening. I wrote most of this poem by listening to the wonderful, gem of a song “Everybody’s Gotta Learn Sometime” by The Korgis which I played in the background to create the “moodset” and inspire the writing of the poem. If you listen to the song at low volume while reading this poem, you might better get the “feel” of it.

HOW TO CREATE A BRIGHTER FINANCIAL FUTURE FOR YEARS AND DECADES TO COME

Posted on by Joseph M. Brennan Jr.

I have finally completed my end-to-end 5-step process for creating a brighter financial future for yourself and others in your life for the years and decades to come:

Step 1: Review, understand, and execute this simple lesson in finance: https://brighterdayslifecoaching.com/a-simple-lesson-in-finance-why-investing-invigorates-and-debt-devastates-your-finances/

Step 2: Review, understand, and execute this 5-step process to financial success: https://brighterdayslifecoaching.com/how-to-invest-well-and-create-a-brighter-future-with-minimal-effort/.

Step 3: Put in the time and effort needed to determine and define a solid investment goal sufficient to support your future plans and needs. Your investment goal is longer-term, and differs from any shorter-term savings goals you might have for yourself for supporting your plans and needs over the next few years or so. Your longer-term investment goal will determine the most appropriate investment strategies to pursue over time on both the buy and sell side. So, you’ll need to revisit and refine your investment goal from time-to-time to ensure it remains sufficient for fulfilling your future plans and needs.

Step 4: When you’re ready to start buying investments, learn what your investment risk category is, and become an investment buying expert — review, understand, and execute this structured, market-based, investment buying strategy: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/.

Step 5: If you are already invested in the stock market, and want to learn what your investment risk category is and when to consider selling investments based on this — become an expert on selling investments by reviewing, understanding, and executing this structured, market-based, investment selling strategy: https://brighterdayslifecoaching.com/a-structured-market-based-selling-strategy-for-investing-well-with-minimal-effort/.

By taking these steps and reviewing, understanding, and executing each of these, you will find yourself far ahead of most everybody you know, and live a life free from financial stress and worry. So, do this for yourself (and others in your life) if you can.

Once you get into the practice of doing all of this, and become proficient at alternating between the buy strategy (step 4 above) and the sell strategy (step 5 above) to approximate potential buy and sell points, you will achieve your long-term investment goals much more quickly and create a brighter future for yourself and others in your life for the years and decades to come.

Feel free to contact me if you have questions about any of the above.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much financial and investing success for 2025 (and beyond!).

selfimprovement #selfhelp #selfdevelopment #success #balance #finance #stocks #investing #stockmarket #bonds #bondmarket

A STRUCTURED MARKET-BASED SELLING STRATEGY FOR INVESTING WELL WITH MINIMAL EFFORT

Posted on by Joseph M. Brennan Jr.

In this post I will discuss my refined, structured Market-Based Selling Strategy for investing well with minimal effort – which is a 4-step process. For the buying side of things, you can find the structured strategy for buying investments here: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/. I discussed the initial buy and sell strategies I came up with in detail in books three and four of my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books focused on the “end to end” process to investing well: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Keep in mind that the below process is notional in nature, and that you will need to refine it over time to get the best use out of it. My version has changed 10+ times over the past 10 years.

Here are the steps:

1. Calculate what I refer to as an Estimated Index Return Yield (EIRY) for each of the major market indexes as follows and see how they compare: add the earrings yield (1/PE) + dividend paid out for each major market index. For example, for SPY (an ETF which tracks the S&P 500 index (SPX)), on 24 January 2025, the earnings yield was 3.57% (1/27.99) and the dividend 1.21%. So, the EIRY would be 3.57% + 1.21% = 4.78%. Some investing experts prefer to use the projected nominal growth rate for the overall economy instead of the earnings yield since earnings growth has roughly been about the same as the overall economic growth. As of this writing, the nominal economic growth for the U.S. economy is presently projected to be 4.1% (1.9% real GDP projection + 2.2% inflation projection via PCE price index). So, using this measure in place of earnings yield, the EIRY for the S&P 500 index would be larger: 4.1% + 1.21% = 5.3%. I currently track each of the following major market indexes: S&P 500 index (e.g., SPY ETF), the Nasdaq (e.g., QQQ ETF), a Mid-Cap Stock Index ETF (e.g., IJH ETF), Russell 2000 index (e.g., IWM ETF), and the EFA ETF (or something similar). The first four are major United States (U.S.) based indexes, while the last one tracks international stocks of developed countries outside the U.S. and Canada. As of this writing, the EFA has the highest EIRY as compared to the other aforementioned indexes. Note: The S&P 500 and Nasdaq indexes typically have smaller dividends as well as PE ratios that exceed many of the other market indexes due to a larger and more concentrated amount of technology/growth companies. Technology/growth companies typically have higher PE ratios and pay little or no dividends – so if you prefer to invest in these indexes you might need to make some adjustments to account for this. The S&P 500 comprises about 80% of the entire U.S. stock market value – so it can be a useful proxy for the performance of the U.S. stock market as a whole.

2. Take a look at overall market indicators for the S&P 500 index to determine whether or not it is approaching extreme highs indicating a coming potential, substantial decline.

These indicators might include one or more of the following:

a. Cyclically Adjusted Price-to-Earnings (CAPE) ratio: Current Stock Market Index Price divided by average inflation-adjusted 10-year Earnings Per Share for the same Market Index. Here’s one source that talks about this indicator: https://www.investopedia.com/terms/c/cape-ratio.asp. The CAPE ratio approaching historical highs can be indicative of a potential, stock market decline although it has had a poor track record of timing the market overall. In recent months, the CAPE for the S&P 500 index has been approaching its highs historically speaking (e.g., as of this writing I believe a CAPE of 22 or higher might be a good number to use as an initial indicator for paying close attention and perhaps becoming more cautious overall).

b. Buffet Indicator: Present Total U.S. Stock Market Value divided by Gross Domestic Product (GDP). Typically, the Wilshire 5000 index is frequently used to represent the Total US Stock Market Value. Here’s one source that talks about this indicator: https://currentmarketvaluation.com/models/buffett-indicator.php. The Buffet Indicator approaching historical highs can be indicative of a potential, stock market decline although it has had a poor track record of timing the market overall. In recent months, the Buffet Indicator has been approaching its highs historically speaking (e.g., as of this writing I believe a Buffet Indicator approaching two standard deviations above the long-term trend line – roughly 185 or higher as of this writing – might be a good number to use as an initial indicator for paying close attention and perhaps becoming more cautious overall).

c. Average Length of Bull Market: According to Bespoke, since 1929 the average bull market has lasted 1011 days: https://media.bespokepremium.com/uploads/2024/07/Bespoke-Report-071224-Pros-Cons-78hy76.pdf. Bull markets in later stages (approaching or above the average) are likely to decline at some point although the timing can be questionable. The present bull market is still in its early stages and is far short of the average length.

d. Average % Gain of Bull Market: According to Bespoke, since 1929 the average bull market has gained 114%: https://media.bespokepremium.com/uploads/2024/07/Bespoke-Report-071224-Pros-Cons-78hy76.pdf. Bull markets approaching or above the average % gain, are likely to decline at some point although the timing can be questionable. The present bull market is far short of reaching this average gain.

e. Volatility index (VIX) approaching lows on a historical basis. Frequently the VIX at low levels rises sharply at some point and the S&P 500 index falls substantially. In recent months, the VIX has oscillated between lows and highs – but has not been at extreme levels.

f. Technical Indicators for S&P 500 approaching highs – especially when looking at weekly charts over several years (e.g., RSI approaching or above 70, S&P 500 approaching or above upper Bollinger Band, MACD at extreme levels, etc.). Technical Indicators approaching highs can signal a coming potential, substantial stock market decline. In recent months, the above technical indicators for the S&P 500 have approached its highs historically speaking.

g. Technical Indicators for VIX approaching lows – especially when looking at weekly charts over several years (e.g., RSI approaching or below 30, VIX approaching or below lower Bollinger Band, MACD at extreme levels, etc.). Technical Indicators for the VIX approaching lows can signal a coming potential, substantial stock market decline. In recent months, the aforementioned technical indicators for the VIX have not been at or approaching extreme levels – low or high historically speaking.

h. Gains substantially above long-term stock market average. The S&P 500 index gains about 10% annually (on average including dividends) – so if you experience substantial gains above and beyond that then it might make sense to sell at least part of the gains. This is particularly true for lower-risk investors – higher-risk investors probably would not be as concerned with this. As a low-risk investor, I frequently sell good gains as I experience them. However, above average gains can continue from one year to the next – and frequently they do – so the timing can be questionable. In the past two years, the S&P 500 Index has far exceeded the average (24% gain in 2023 and 23% gain in 2024). At some point, annual gains are likely to revert back to the long-term average.

i. See how the EIRY calculated in step 1 for the S&P 500 index compares to the 10-year treasury bond rate (TNX). Anytime the TNX approaches or exceeds the EIRY for the S&P 500 index, this indicates investing in the “risk-free” TNX is the more compelling investment and can signal a potential substantial decline in the S&P 500 index at some point although the timing can be questionable. For example, on 24 January 2025, the EIRY of the S&P 500 was 4.78% while the TNX was 4.63% – indicating the S&P 500 would only be a slightly better investment than the TNX meaning it is probably not worth the risk. If the EIRY for the S&P 500 was 50%+ higher than the “risk-free” TNX, then it would be a much more compelling investment and more worth the risk.

j. GDP approaching certain thresholds. As indicated in this post https://www.aol.com/finance/heres-where-wall-street-sees-211510635.html, the overall stock market generally experiences substantial gains when GDP is either negative or at 2.1%+, while substantial losses tend to be experienced when GDP is between 0% and 1% (losses are also generally experienced when GDP is between 1.1% and 2% – but the losses are much smaller). Keep in mind when considering this that the stock market tends to be “forward-looking” in nature and typically reflects what investors believe will happen in the next 6+ months.

Now, although each of the above indicators has limitations, they can signal whether the overall stock market might be approaching extreme highs indicating a coming potential, substantial rebound – especially when these highs are signaled by several indicators. Many indicators, however, are not very precise, and tend to reflect highs much more frequently than lows over time.

The above are just a few of the technical and overall market indicators you can use. There are several others available including those discussed here: https://finance.yahoo.com/news/why-more-wall-street-firms-230100571.html

The best investing strategy to use will change over time depending on your investment risk category and the stock market risk overall. So, it’s very important, at least on a periodic basis, to maintain awareness of which risk category you fall into as well as what the overall stock market risk is at the time. Many investors fail to maintain this awareness and make these adjustments resulting in losing much of their life savings (e.g., remaining a high-risk investor when lower risk is appropriate) or not growing their life savings as much as needed (e.g., remaining a low-risk investor when higher risk is appropriate).

Now, the above being stated, if you have not yet defined your investment goal, then your financial future is already at substantial risk. So, please put in the time and effort to come up with a solid investment goal, and revisit and refine it from time-to-time to ensure it remains sufficient for fulfilling your future plans and needs. Your investment goal drives the associated risk category, and that, along with making adjustments when your risk category changes are the keys to achieving future financial success.

The most promising investment strategy for higher-risk investors (those in the HIGH-RISK and VERY HIGH-RISK categories) can be summarized as “playing to win” – ensuring you maximize stock market participation to the extent practical by staying invested for much of the time to ensure you don’t miss out on longer-term gains; even if it means you temporarily experience unrealized (“paper”) losses from time-to-time. It is most appropriate for investors in these higher-risk categories to continue buying into stocks – so as not to miss out on any potential gains – and some of these higher risk investors may never sell or just sell a little from time-to-time.

In contrast, the most promising investment strategy for lower-risk investors (those in the LOW-RISK and VERY LOW-RISK categories) can be summarized as “playing not to lose” – ensuring you maximize safety and protection and avoid losses to the extent practical; even if it means you miss out on potential gains. It is most appropriate for investors in these lower-risk categories to refrain from buying into stocks until they approach lower levels – and they are likely to sell many of the gains as they experience them to avoid experiencing substantial losses. Because once you have built up substantial savings overall, it makes sense to do what you can to protect yourself from losing what you have.

Medium-risk investors will need to take more of a middle ground approach, doing a little of both investing strategies but at less extremes on both the high side and the low side.

3. Assign one of the following to the overall stock market based on the results of step 2: GREEN (Low-Risk), AMBER (Medium-Risk), or RED (High-Risk).

4. If the S&P 500 index has reached new all-time highs, and the risk level assigned in Step 3 is AMBER or RED (for lower risk investors as defined in the section towards the bottom of step 4) or just RED (for medium and higher risk investors as defined in the section towards the bottom of step 4), take following actions (otherwise do nothing):

Note: each of the applicable steps is executed one time only in the exact order presented below (a-m) until the point when you start buying again using the structured strategy for buying investments: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/. So, once you execute step c, for example, you will next execute step d at some point when the specified condition is met. You will never go back to re-execute any of the previous steps – the only time that potentially changes is after you start buying investments again via the strategy referenced above.

a. Sell A% of the stock portion of your overall investment account (excluding bonds, CDs, bond ETFs, and such), and note the price of the S&P 500 index when selling this portion of your overall investment account. The price of the S&P 500 index noted will be used as the reference point for the remainder of this selling process.

b. Sell an additional B% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 5% from the price level noted in step 4.a. above.

c. Sell an additional C% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 10% from the price level noted in step 4.a. above.

d. Sell an additional D% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 15% from the price level noted in step 4.a. above.

e. Sell an additional E% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 20% from the price level noted in step 4.a. above.

f. Sell an additional F% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 25% from the price level noted in step 4.a. above.

g. Sell an additional G% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 30% from the price level noted in step 4.a. above.

h. Sell an additional H% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 35% from the price level noted in step 4.a. above.

i. Sell an additional I% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 40% from the price level noted in step 4.a. above.

j. Sell an additional J% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 45% from the price level noted in step 4.a. above.

k. Sell an additional K% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 50% from the price level noted in step 4.a. above.

l. Sell an additional L% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 55% from the price level noted in step 4.a. above.

m. Sell an additional M% of the total stock portion of your overall investment account determined in step 4.a. above when the S&P 500 index rises about 60% from the price level noted in step 4.a. above.

Determine the specific % of overall stock investments to sell at each step of the above process (a-m) as follows:

Important Note: When adding up what you have across your investment accounts, I recommend making the following adjustment for pre-tax type investment accounts (e.g., 401Ks and IRAs without the word “Roth” attached): reduce the total amount by 24% for a conservative overall estimate. We have to pay taxes when withdrawing from these kinds of accounts so this will help to account for that. Feel free to use a different percentage reduction depending on what tax bracket you believe you will fall into when withdrawing money from these accounts.

VERY HIGH-RISK INVESTOR (your investment goal is 8+ times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k or less in total across your investment accounts then you would be a very high-risk investor.

If the overall stock market risk you assigned in step 3 is RED: D% = 10%, E% = 10%, F% = 10%, G% = 10%, H% = 10%, I% = 10%, J% = 10%, K% = 10%, L% = 10%, M% = 10%.

If the overall stock market risk you assigned in step 3 is anything other than RED, then do nothing.

Every time you sell or have new additional savings, put the cash in a money market fund and await another substantial market drop before buying (e.g., you can use the structured strategy for buying investments if desired: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/). You can also take a look at the overall market indicators for the S&P 500 index as shown in step 2 above and buy when it approaches extreme, beaten down levels indicating a coming potential, substantial rebound. You can also combine the two approaches if that is your preference.

HIGH-RISK INVESTOR (your investment goal is roughly 4-8 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k-$500k in total across your investment accounts then you would be a high-risk investor.

If the overall stock market risk you assigned in step 3 is RED: B% = 10%, C% = 10%, D% = 10%, E% = 10%, F% = 15%, G% = 15%, H% = 15%, I% = 15%.

If the overall stock market risk you assigned in step 3 is anything other than RED, then do nothing.

Every time you sell or have new additional savings, put the cash in a money market fund and await another substantial market drop before buying (e.g., you can use the structured strategy for buying investments if desired: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/). You can also take a look at the overall market indicators for the S&P 500 index as shown in step 2 above and buy when it approaches extreme, beaten down levels indicating a coming potential, substantial rebound. You can also combine the two approaches if that is your preference.

MEDIUM-RISK INVESTOR (your investment goal is roughly 2-4 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $500k-$1M in total across your investment accounts then you would be a medium-risk investor.

If the overall stock market risk you assigned in step 3 is RED: A% = 10%, B% = 10%, C% = 10%, D% = 15%, E% = 15%, F% = 20%, G% = 20%.

If the overall stock market risk you assigned in step 3 is anything other than RED, then do nothing.

Every time you sell or have new additional savings, put the cash in a low-risk fixed income investment and await another substantial market drop before buying (e.g., you can use the structured strategy for buying investments if desired: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/). The low-risk fixed income investments to potentially buy include a highly-rated 2-10 year bond, 2-10 year CD, low-cost bond ETF (IEF and AGG are two examples), or money market fund (if the yield on the money market fund is similar then all cash should go there but if the yield is substantially higher for bonds, CDs, or bond ETFs then consider placing at least some of the cash there). Note: No more than 50% of your overall investment account should be invested in bonds, CDs, and bond ETFs.

LOW-RISK INVESTOR (your investment goal is roughly 1-2 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $1M-$2M in total across your investment accounts then you would be a low-risk investor.

If the overall stock market risk you assigned in step 3 is AMBER: C% = 10%, D% = 10%, E% = 15%, F% = 15%, G% = 15%, H% = 15%, I% = 20%.

If the overall stock market risk you assigned in step 3 is RED: A% = 20% or more, B% = 20% or more, C% = 20% or more, D% = 20% or more, E% = 20% or more.

If the overall stock market risk you assigned in step 3 is GREEN, then do nothing.

Every time you sell or have new additional savings, put the cash in a low-risk fixed income investment and await another substantial market drop before buying (e.g., you can use the structured strategy for buying investments if desired: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/). The low-risk fixed income investments to potentially buy include a highly-rated 2-10 year bond, 2-10 year CD, low-cost bond ETF (IEF and AGG are two examples), or money market fund (if the yield on the money market fund is similar then all cash should go there but if the yield is substantially higher for bonds, CDs, or bond ETFs then consider placing at least some of the cash there). Note: No more than 75% of your overall investment account should be invested in bonds, CDs, and bond ETFs.

VERY LOW-RISK INVESTOR (what you presently have in total across your investment accounts equals or exceeds your investment goal – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $2M or more in total across your investment accounts then you would be a very low-risk investor.

If the overall stock market risk you assigned in step 3 is AMBER: C% = 20% or more, D% = 20% or more, E% = 20% or more, F% = 20% or more, G% = 20% or more.

If the overall stock market risk you assigned in step 3 is RED: A% = 33.4% or more, B% = 33.3% or more, C% = 33.3% or more.

If the overall stock market risk you assigned in step 3 is GREEN, then do nothing.

Every time you sell or have new additional savings, put the cash in a low-risk fixed income investment and await another substantial market drop before buying (e.g., you can use the structured strategy for buying investments if desired: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/). The low-risk fixed income investments to potentially buy include a highly-rated 2-10 year bond, 2-10 year CD, low-cost bond ETF (IEF and AGG are two examples), or money market fund (if the yield on the money market fund is similar then all cash should go there but if the yield is substantially higher for bonds, CDs, or bond ETFs then consider placing at least some of the cash there).

Again, the specific values presented above, and the process overall is notional in nature – so, it might appropriate to adjust these to best meet your specific investing goals. One reason why it can be wise to update your investment strategies over time is the more successful investors stay ahead of the crowd. They are willing to zig when others are zagging, and vice versa when good opportunities present themselves. If, instead, you are doing what most everybody else is doing, then your gains will be marginal at best and you can experience substantial losses during stock market downturns. So, it’s important to avoid being a “go along with the crowd “ type investor. Investors that are very patient and who tend to be more logical and mechanical in nature – as opposed to being compulsive and emotional in nature – will stay well ahead of the crowd and do well for themselves. Because most individual investors do not possess these key qualities.

The above process offers a notional, structured strategy for selling investments. However, for a more complete process, you will also need a structured strategy for buying investments. This is discussed in the following post: https://brighterdayslifecoaching.com/wp-admin/post.php?post=22935&action=edit. By alternating between the sell strategy and the buy strategy to approximate potential sell and buy points (based on your investment risk category in coordination with overall stock market indicators when appropriate) and promptly acting on these, you are likely to achieve your long-term investment goals more quickly and create a brighter future for yourself and others in your life.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond!).

selfimprovement #selfhelp #selfdevelopment #success #balance #finance #stocks #investing #stockmarket #bonds #bondmarket

A STRUCTURED MARKET-BASED BUYING STRATEGY FOR INVESTING WELL WITH MINIMAL EFFORT

Posted on by Joseph M. Brennan Jr.

In this post I will discuss my refined, structured Market-Based Buying Strategy for investing well with minimal effort – which is a 4-step process. For the selling side of things, you can find the structured strategy for selling investments here: https://brighterdayslifecoaching.com/a-structured-market-based-selling-strategy-for-investing-well-with-minimal-effort/. I discussed the initial buy and sell strategies I came up with in detail in books three and four of my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books focused on the “end to end” process to investing well: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Keep in mind that the below process is notional in nature, and that you will need to refine it over time to get the best use out of it. My version has changed 10+ times over the past 10 years.

Here are the steps:

1. Track one of the major stock market indexes. In the United States (U.S.), I like to track the S&P 500 index [SPY is an Exchange-Traded Fund (ETF) that tracks the S&P 500 Index]. The S&P 500 index comprises about 80% of the entire U.S. stock market value – so it can be a useful proxy for the performance of the U.S. stock market as a whole.

2. When the major stock market index has fallen a certain % or more from its all-time high, check the other major indexes and see how each of them compare. I currently track each of the following major market indexes: S&P 500 index (e.g., SPY ETF), the Nasdaq (e.g., QQQ ETF), a Mid-Cap Stock Index ETF (e.g., IJH ETF), Russell 2000 index (e.g., IWM ETF), and the EFA ETF (or something similar). The first four are major U.S. based indexes, while the last one tracks international stocks of developed countries outside the U.S. and Canada. Select the overall market index(es) to buy into via one of the following options:

a. The major stock market index that falls the most from its all-time high.

b. Calculate what I refer to as an Estimated Index Return Yield (EIRY) for each of the major stock market indexes you are tracking. The EIRY is calculated as follows: add the earrings yield (1/PE) + dividend paid out for each major stock market index you are tracking. For example, for SPY (an ETF which tracks the S&P 500 index), on 24 January 2025, the earnings yield was 3.57% (1/27.99) and the dividend 1.21%. So, the EIRY would be 3.57% + 1.21% = 4.78%. As of this writing, the EFA has the highest EIRY as compared to the other indexes addressed in step 2 above. Some investing experts prefer to use the projected nominal growth rate for the overall economy instead of the earnings yield since earnings growth has roughly been about the same as the overall economic growth. As of this writing, the nominal economic growth for the U.S. economy is presently projected to be 4.1% (1.9% real GDP projection + 2.2% inflation projection via PCE price index). So, using this measure in place of earnings yield, the EIRY for the S&P 500 index would be larger: 4.1% + 1.21% = 5.3%.

c. Compare the results of items a and b above and select the most promising major stock market index to buy into or select multiple indexes to buy into if multiple indexes appear to offer promising buying opportunities. As of this writing, the EFA appears to offer the most promising buying opportunity overall. Note: If you are an experienced investor, you can choose to buy individual stocks instead of stock market indexes if that is your preference. If you end up picking winning stocks, your gains can be much more substantial, but the opposite can happen if you end up picking losing stocks. So, buying individual stocks can be risky for many investors. For example, since 1980 about 40% of the Russell 3000 (pretty much the entire stock market) component stocks lost about 70% of their value and never recovered, while all of the index’s overall returns came from about 7% of its component companies which greatly outperformed. The Russell 3000 has increased more than 73-fold since 1980 – even while 40% of the companies in the index failed. The 7% of companies that performed extremely well were much more than enough to offset the underperforming companies. So, very few companies tend to account for a majority of overall stock market returns while many companies fail. This is one reason why it’s very difficult to outperform the overall stock market indexes consistently over time.

3. Invest as follows (note: anytime the S&P 500 index has fallen more from its all-time high than what is stated below when initiating your buying process, simply add up each of the applicable percentages in the below list. For example, if the S&P 500 has dropped 16% from its all-time high when initiating your buying process, then you would add A% + B% + C% + D% + E% up to the limit of what you have in your overall investment account, and buy all of that at that time):

Note: each of the applicable steps is executed one time only in the exact order presented below (a-n) until the point when you start selling using the structured strategy for selling investments: https://brighterdayslifecoaching.com/a-structured-market-based-selling-strategy-for-investing-well-with-minimal-effort/. So, once you execute step c, for example, you will next execute step d at some point when the specified condition is met. You will never go back to re-execute any of the previous steps – the only time that potentially changes is after you start selling your investments via the selling strategy referenced above.

a. Ensure A% of your overall investment account is fully invested into the target investment(s) determined in step 2 when the S&P 500 index drops about 5% from its all-time high – this percentage should not exceed what has been already invested in stocks (excludes bonds, CDs, bond ETFs. and such). If it does, then wait until step b is triggered and reassess.

b. Ensure an additional B% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 7.5% from its all-time high – the cumulative percentage total between steps a and b should not exceed the percentage total which has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step c is triggered and reassess. Note: the all-time high of the S&P 500 index may change over time – just use the latest all-time high for each step of the buying process when evaluating percentage drops in the S&P 500 index. For example, if the S&P 500 index rose to a new all-time high after step a was executed, then the 7.5% drop for step b would be calculated from the new all-time high.

c. Ensure an additional C% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 10% from its all-time high – the cumulative percentage total between steps a-c should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step d is triggered and reassess.

d. Ensure an additional D% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 12.5% from its all-time high – the cumulative percentage total between steps a-d should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step e is triggered and reassess.

e. Ensure an additional E% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 15% from its all-time high – the cumulative percentage total between steps a-e should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step f is triggered and reassess.

f. Ensure an additional F% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 17.5% from its all-time high – the cumulative percentage total between steps a-f should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step g is triggered and reassess.

g. Ensure an additional G% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 20% from its all-time high – the cumulative percentage total between steps a-g should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step h is triggered and reassess.

h. Ensure an additional H% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 22.5% from its all-time high – the cumulative percentage total between steps a-h should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step i is triggered and reassess.

i. Ensure an additional I% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 25% from its all-time high – the cumulative percentage total between steps a-i should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step j is triggered and reassess.

j. Ensure an additional J% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 27.5% from its all-time high – the cumulative percentage total between steps a-j should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step k is triggered and reassess.

k. Ensure an additional K% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 30% from its all-time high – the cumulative percentage total between steps a-k should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step l is triggered and reassess.

l. Ensure an additional L% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 32.5% from its all-time high – the cumulative percentage total between steps a-l should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait until step m is triggered and reassess.

m. Ensure an additional M% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 35% from its all-time high – the cumulative percentage total between steps a-m should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait for additional declines before investing more.

n. Ensure an additional N% of your overall investment account is fully invested into the target investments determined in step 2 when the S&P 500 index drops about 37.5% from its all-time high – the cumulative percentage total between steps a-n should not exceed the percentage total that has been already invested in stocks (excludes bonds, CDs, bond ETFs, and such). If it does, then wait for additional declines before investing more.

Determine the specific % of your overall investment account to invest at each step of the above process (a-m) as follows:

Important Note: When adding up what you have across your investment accounts, I recommend making the following adjustment for pre-tax type investment accounts (e.g., 401Ks and IRAs without the word “Roth” attached): reduce the total amount by 24% for a conservative overall estimate. We have to pay taxes when withdrawing from these kinds of accounts so this will help to account for that. Feel free to use a different percentage reduction depending on what tax bracket you believe you will fall into when withdrawing money from these accounts.

VERY HIGH-RISK INVESTOR (your investment goal is 8+ times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k or less in total across your investment accounts then you would be a very high-risk investor. A% = Up to 50% (or more), B% = remainder. If the stock market rises back to an all-time high before you get the chance to invest the remainder, put the cash in a money market fund and await another substantial market drop before investing the remaining amount. Alternatively, for higher risk investors who would prefer not waiting too long to get into the overall stock market, you can take a look at the overall market indicators for the S&P 500 index as shown in step 4 below and buy each time it approaches extreme, beaten down levels indicating a coming potential, substantial rebound. You can also combine the two approaches if that is your preference.

HIGH-RISK INVESTOR (your investment goal is roughly 4-8 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $250k-$500k in total across your investment accounts then you would be a high-risk investor. B% = 33.3%, C% = 33.3%, D% = 33.4%. If the stock market rises back to an all-time before you get the chance to invest the remainder, put the cash in a money market fund and await another substantial market drop before investing the remaining amount. Alternatively, for higher risk investors who would prefer not waiting too long to get into the overall stock market, you can take a look at the overall market indicators for the S&P 500 index as shown in step 4 below and buy each time it approaches extreme, beaten down levels indicating a coming potential, substantial rebound. You can also combine the two approaches if that is your preference.

MEDIUM-RISK INVESTOR (your investment goal is roughly 2-4 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $500k-$1M in total across your investment accounts then you would be a medium-risk investor. B% = 15%, C% = 15%, D% = 15%, E% = 15%, F%=20%, G%=20%. If the stock market rises back to an all-time high before you get the chance to invest the remainder, put the cash into a highly-rated 2-10 year bond, 2-10 year CD, or money market fund (if the yield on the money market fund is similar then all cash should go there but if the yield is substantially higher for bonds or CD then consider placing at least some of the cash there). Note: No more than 50% of your overall investment account should be invested in bonds or CDs.

LOW-RISK INVESTOR (your investment goal is roughly 1-2 times what you presently have in total across your investment accounts – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $1M-$2M in total across your investment accounts then you would be a low-risk investor. C% = 10%, D% = 10%, E% = 10%, F% = 10%, G% = 15%, H% = 15%, I% = 15%, K%=15%. If the stock market rises back to an all-time high before you get the chance to invest the remainder, put the cash into a highly-rated 2-10 year bond, 2-10 year CD, or money market fund (if the yield on the money market fund is similar then all cash should go there but if the yield is substantially higher for bonds or CD then consider placing at least some of the cash there). Note: No more than 75% of your overall investment account should be invested in bonds or CDs.

VERY LOW-RISK INVESTOR (what you presently have in total across your investment accounts equals or exceeds your investment goal – after making adjustments in accordance with the note above). For example, if your investment goal is $2M and you presently have $2M or more in total across your investment accounts then you would be a very low-risk investor. D% = 5% or less, E% = 5% or less, F% = 7.5% or less, G% = 7.5% or less, H% = 10% or less, I% = 10% or less, J% = 12.5% or less, K% = 12.5% or less, L% = 15% or less, M% = 15% or less until fully invested. If the stock market rises substantially before you get the chance to invest the remainder, put the cash into a highly-rated 2-10 year bond, 2-10 year CD, or money market fund (if the yield on the money market fund is similar then all cash should go there but if the yield is substantially higher for bonds or CD then consider placing at least some of the cash there).

4. Alternatively, for higher risk investors who prefer not waiting too long to get into the stock market, you can take a look at the overall market indicators for the S&P 500 index to determine whether or not it might be approaching extreme, beaten down levels indicating a coming potential, substantial rebound – and buying each time it does. You can also combine the two approaches if that is your preference. These indicators might include one or more of the following:

a. Cyclically Adjusted Price-to-Earnings (CAPE) ratio: Current Stock Market Index Price divided by average inflation-adjusted 10-year Earnings Per Share for the same Market Index. Here’s one source that talks about this indicator: https://www.investopedia.com/terms/c/cape-ratio.asp. The CAPE Indicator falling from historical highs can be indicative of a potential, stock market rise although it has historically had a poor track record of timing the market overall. In recent months, the CAPE for the S&P 500 index has been approaching its highs historically speaking (e.g., as of this writing I believe a CAPE of 22 or higher might be a good number to use as an initial indicator for paying close attention and perhaps becoming more cautious overall).

b. Buffet Indicator: Present Total US Stock Market Value divided by Gross Domestic Product (GDP). Typically, the Wilshire 5000 index is used to represent the Total US Stock Market Value. Here’s one source that talks about this indicator: https://currentmarketvaluation.com/models/buffett-indicator.php. The Buffet Indicator falling from historical highs can be indicative of a potential, stock market rise although it has historically had a poor track record of timing the market overall. In recent months, the Buffet Indicator has been approaching its highs historically speaking (e.g., as of this writing I believe a Buffet Indicator approaching two standard deviations above the long-term trend line – roughly 185 or higher as of this writing – might be a good number to use as an initial indicator for paying close attention and perhaps becoming more cautious overall).

c. Average Length of Bull Market: According to Bespoke, since 1929 the average bull market has lasted 1011 days: https://media.bespokepremium.com/uploads/2024/07/Bespoke-Report-071224-Pros-Cons-78hy76.pdf. Bull markets in earlier stages (below the average) are likely to continue rising although timing can be questionable. The present bull market is still in its early stages and is far short of the average length.

d. Average % Gain of Bull Market: According to Bespoke, since 1929 the average bull market has gained 114%: https://media.bespokepremium.com/uploads/2024/07/Bespoke-Report-071224-Pros-Cons-78hy76.pdf. Bull markets below the average % gain, are likely to continue rising although the timing can be questionable. The present bull market is far short of reaching this average gain.

e. Volatility index (VIX) approaching highs on a historical basis. Frequently the VIX at high levels reverses at some point and the S&P 500 index rises substantially. In recent months, the VIX has oscillated between lows and highs – but has not been at extreme levels.

f. Technical Indicators for S&P 500 index approaching lows – especially when looking at weekly charts over several years (e.g., RSI approaching or below 30, S&P 500 approaching or below the lower Bollinger Band, MACD at extreme buy levels, etc.). Technical Indicators approaching lows can signal a coming potential, substantial stock market rise. In recent months, the aforementioned technical indicators for the S&P 500 have approached its highs historically speaking.

g. Technical Indicators for VIX approaching highs – especially when looking at weekly charts over several years (e.g., RSI approaching or above 70, VIX approaching or above upper Bollinger Band, MACD at extreme levels, etc.). Technical Indicators for the VIX approaching highs can signal a coming potential, substantial stock market rise. In recent months, the aforementioned technical indicators for the VIX have not been at or approaching extreme levels – low or high historically speaking.

h. Gains substantially below the long-term stock market average. The S&P 500 index gains about 10% annually (on average including dividends) – so if you have experienced much smaller gains than that, it might make sense to buy into the stock market if you have cash available. This is particularly true for higher-risk investors – lower-risk investors probably would not be as concerned with this. Although below average gains can continue from one year to the next from time-to-time, this tends to be infrequent in nature. In the past two years, the S&P 500 Index has far exceeded the average (24% gain in 2023 and 23% gain in 2024). At some point, annual gains are likely to revert back to the long-term average.

i. See how the present EIRY for the S&P 500 index compares to the current 10-year treasury bond rate (TNX) – see step 2.b. above for how the EIRY is calculated. Anytime the TNX approaches or exceeds the EIRY for the S&P 500 index, this indicates investing in the “risk-free” TNX is the more compelling investment, and can signal a potential substantial decline in the S&P 500 at some point although the timing can be questionable. For example, on 24 January 2025, the EIRY of the S&P 500 was 4.78% while the TNX was 4.63% – indicating the S&P 500 would only be a slightly better investment than the TNX meaning it is probably not worth the risk. If the EIRY for the S&P 500 was 50%+ higher than the “risk-free” TNX then it would be a much more compelling investment and more worth the risk.

j. GDP approaching certain thresholds. As indicated in this post https://www.aol.com/finance/heres-where-wall-street-sees-211510635.html, the overall stock market generally experiences substantial gains when GDP is either negative or at 2.1%+, while substantial losses tend to be experienced when GDP is between 0% and 1% (losses are also generally experienced when GDP is between 1.1% and 2% – but the losses are much smaller). Keep in mind when considering this that the stock market tends to be “forward-looking” in nature and typically reflects what investors believe will happen in the next 6+ months.

Now, although each of the above indicators have limitations, they can signal whether the overall stock market might be approaching extreme lows indicating a coming potential, substantial rebound – especially when these lows are signaled by several indicators. Many indicators, however, are not very precise, and tend to reflect highs much more frequently than lows over time. Due to the tendency of the aforementioned indicators to run high, I have not used them often to signal investment buying processes. They might be extremely helpful, however, on those rare occasions when several of the indicators signal extreme lows – so pay attention and be ready to buy anytime that happens.

The above are just a few of the technical and overall market indicators you can use. There are several others available including those discussed here: https://finance.yahoo.com/news/why-more-wall-street-firms-230100571.html

The best investing strategy to use will change over time depending on your investment risk category, and on those somewhat rare occasions when several overall stock market indicators signal extreme lows. So, it’s very important, at least on a periodic basis, to maintain awareness of which investment risk category you fall into as well as remaining cognizant of when the overall stock market is approaching extreme lows. Many investors fail to maintain this awareness or make these adjustments resulting in losing much of their life savings (e.g., remaining a high-risk investor when lower risk is appropriate) or not growing their life savings as much as needed (e.g., remaining a low-risk investor when higher risk is appropriate).

Now, the above being stated, if you have not yet defined your investment goal, then your financial future is already at substantial risk. So, please put in the time and effort to come up with a solid investment goal, and revisit and refine it from time-to-time to ensure it remains sufficient for fulfilling your future plans and needs. Your investment goal drives the associated risk category, and that, along with making adjustments when your risk category changes are the keys to achieving future financial success.

The most promising investment strategy for higher-risk investors (those in the HIGH-RISK and VERY HIGH-RISK categories) can be summarized as “playing to win” – ensuring you maximize stock market participation to the extent practical by staying invested for much of the time to ensure you don’t miss out on longer-term gains; even if it means you temporarily experience unrealized (“paper”) losses from time-to-time. It is most appropriate for investors in these higher-risk categories to continue buying into stocks – so as not to miss out on any potential gains – and some of these higher risk investors may never sell or may just sell a little from time-to-time.

In contrast, the most promising investment strategy for lower-risk investors (those in the LOW-RISK and VERY LOW-RISK categories) can be summarized as “playing not to lose” – ensuring you maximize safety and protection and avoid losses to the extent practical; even if it means you miss out on potential gains. It is most appropriate for investors in these lower-risk categories to refrain from buying into stocks until they approach lower levels – and they are likely to sell many of the gains as they experience them to avoid experiencing significant losses. Because once you have built up substantial savings overall, it makes sense to do what you can to protect yourself from losing what you have.

Medium-risk investors will need to take more of a middle ground approach, doing a little of both investing strategies but at less extremes on both the high side and the low side.

Again, the specific values presented above, and the process overall is notional in nature – so, it might appropriate to adjust these to best meet your specific investing goals. One reason why it can be wise to update your investment strategies over time is the more successful investors stay ahead of the crowd. They are willing to zig when others are zagging, and vice versa when good opportunities present themselves. If, instead, you are doing what most everybody else is doing then your gains will be marginal at best and you can experience substantial losses during stock market downturns. So, it’s important to avoid being a “go along with the crowd “ type investor. Investors that are very patient and who tend to be more logical and mechanical in nature – as opposed to being compulsive and emotional in nature – will stay well ahead of the crowd and do well for themselves. Because most individual investors do not possess these key qualities.

Here are a few historical trends to keep in mind when coming up with your version of the above investment buying strategy: A 3-5% drop in the S&P 500 index generally happens about three times a year, a 10% drop generally happens about once every two years, and a 20%+ drop generally happens about twice every five years. So, the deeper the drop you wait for before buying, the higher the likelihood you’ll miss a significant rebound. Frequently, the major stock indexes will decline more once they drop 20% (defined as a bear market). However, the rebound and recovery is often swift. So, you will probably want to be fully invested fairly soon after that happens unless you are a lower-risk investor. Otherwise, you can miss out on substantial gains.

Here are a few points of reference which might also be helpful for formulating your version of the above investment buying strategy: a 25% drop results in a 33% gain once the index or ETF gets back to breakeven, a 33% drop results in a 50% gain once the index or ETF gets back to breakeven, and a 50% drop results in a 100% gain once the index or ETF gets back to breakeven. So, patiently waiting for a drop to happen before putting money to work can be greatly beneficial from time-to-time – while being fully invested when a significant drop happens can substantially hurt your finances. This is why avoiding investing at the top can be an important factor for your overall, financial well-being – especially for those who are lower-risk investors.

If you invest using a structured investment buy strategy such as what has been presented above, then you will experience a smaller percentage drop overall, and wind up with substantial gains once the major index gets back to breakeven. For example, if you were investing in the S&P 500 index and it drops 33% at the bottom, then once it gets back to breakeven (a 50% gain from that point but a 0% gain overall if you were fully invested at the time) investors using the above notional investment buy strategy (starting from being 0% invested) would fare as follows:

The VERY HIGH-RISK INVESTOR would experience a 26.3% drop overall compared to a 33% drop in the S&P 500 index, but a 14.4% gain when S&P 500 breaks even for a 0% gain (50% S&P gain at breakeven – 35.6% Investor = 14.4%).

The HIGH-RISK INVESTOR would experience a 22.5% drop overall compared to a 33% drop in the S&P 500 index, but a 21.0% gain when S&P 500 breaks even for a 0% gain (50% S&P gain at breakeven – 29.0% Investor = 16.7%).

The MEDIUM-RISK INVESTOR would experience a 18.3% drop overall compared to a 33% drop in the S&P 500 index, but a 27.6% gain when S&P 500 breaks even for a 0% gain (50% S&P gain at breakeven – 22.4% Investor = 27.6%).

The LOW-RISK INVESTOR would experience a 12.8% drop overall compared to a 33% drop in the S&P 500 index, but a 35.3% gain when S&P 500 breaks even for a 0% gain (50% S&P gain at breakeven – 14.7% Investor = 31.8%).

The VERY LOW-RISK INVESTOR would experience a 6.6% drop overall compared to a 33% drop in the S&P 500 index, but a 42.9% gain when S&P 500 breaks even for a 0% gain (50% S&P gain at breakeven – 7.1% Investor = 42.9%).

So, patiently waiting for a drop to happen before putting money to work can be greatly beneficial, while being fully invested when a significant drop happens can substantially hurt your finances – especially for lower-risk investors. Given the above gain percentage potential, it might also be worth considering selling any bonds, CDs, and other low-risk fixed income investments you might have and buying into the stock market instead if the above potential gains substantially exceed what you might realize via these low-risk fixed income investments. So, consider doing this as a part of your investment buying process.

If anyone would like a copy of my spreadsheet so you can use it and adjust it to your needs, contact me at: joe.brennan85@gmail.com.

Now, regarding any new savings you might be accumulating while executing the above investment buy strategy, you can put that money to work as well via the above process or at any point prior to the major stock market index reaching the breakeven point (or even beyond in some cases). If you are a higher-risk investor, you might be inclined to keep buying into the stock market – but if you are a lower-risk investor, you might be inclined to keep your savings in safer, low-risk investments until substantial market drops are experienced.

The above process offers a notional, structured strategy for buying investments. However, for a more complete process, you will also need a structured strategy for selling investments. This is discussed in the following post: https://brighterdayslifecoaching.com/a-structured-market-based-selling-strategy-for-investing-well-with-minimal-effort/. By alternating between the buy strategy and the sell strategy to approximate potential buy and sell points (based on your investment risk category in coordination with overall stock market indicators when appropriate) and promptly acting on these, you are likely to achieve your long-term investment goals more quickly and create a brighter future for yourself and others in your life.

The above process ensures that you never invest at the market top, and that you invest early enough during substantial stock market declines so you can earn sizable gains over time.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond!).

selfimprovement #selfhelp #selfdevelopment #success #balance #finance #stocks #investing #stockmarket #bonds #bondmarket

THOUGHTS ON A FREQUENTLY REFERENCED BOOK ON INVESTING: THE INTELLIGENT INVESTOR

Posted on by Joseph M. Brennan Jr.

I thought “The Intelligent Investor” by Benjamin Graham was probably one of the more boring and tedious books I have ever read. It was a real chore to get through, but I finally did. As with other books I have read that were equally painful to read, there are always at least a few golden nuggets. Most of it I already knew and regularly practice but there were a few that I plan to take a closer look at. Here are the notes I that I thought were the most worthwhile to capture which might be helpful to some of you out there:

The stock market is a pendulum that swings between extremes. The Intelligent Investor sells to extreme optimists and buys from extreme pessimists. JOE BRENNAN COMMENT: For example, back in 2020, I bought from extreme pessimists during the Covid-19 Pandemic when everybody told me I would lose a lot of money due to the depression era scenario people were projecting. Instead, I had my best year ever in the stock market – ending the year with a 164% gain and nearly tripling my savings (my second best year ever was a 73% gain back in 2015). You can see my annual gains by scrolling through the following post: https://brighterdayslifecoaching.com/final-stock-market-score-joe-57-2-spx-24-2/?fbclid=IwZXh0bgNhZW0CMTAAAR2NxxPprNNXvETFlCdOfnAo3XrJhm-ftT4126p0ffFDwW0hDxljtD283Os_aem_UkGQjO1yZfmZofmHzWP5Jg . Back in 2021, I sold to extreme optimists and got completely out of the bond market – avoiding a 46% loss over nearly 3 years. This was very unusual for the bond market when considering its longer-term history as a low-risk, safe haven investment. Those losses were more typical of a stock market decline than a bond market decline. You can read all about that here: https://brighterdayslifecoaching.com/a-break-in-the-clouds-the-return-of-low-risk-safe-haven-investments-via-the-bond-market/?fbclid=IwY2xjawH2rGlleHRuA2FlbQIxMAABHdx_gloyTm9no0SWUH8TGpFE2vZZswZT093eCilUTfhWytmhlahiw1zJOg_aem_fG69Yr-CMag1UE-QiQV9QQ (the link to the previous bond market post is also contained in that post).

If you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing discipline and courage, you can avoid letting other people’s emotions and mood swings influence your longer term gains. The way your financial investments behave is much less important than how you behave as an investor.

Frequently bullish investors have historically said things like: “Is the stock market riskier today than two years ago just because prices are higher? The answer is no.” Well, no. The answer is yes. It always has been. It always will be.

One way to value stocks is: % earnings growth (perhaps use a historical average: 1.5%-2.0% in 1972 looking back) + Annual Inflation Rate (perhaps use a historical average – 2.4% per year in 1972) + Dividend Yield (1.9% in 1972 for SPX?) = 1.5%-2.0% + 2.4% + 1.9% = 5.8% – 6.3%. For this scenario, that means you can reasonably expect stocks to average about a 6% return (3.6% after inflation).

To the extent that the investor’s funds are placed in high-grade bonds of relatively short maturity – say, of 7 years or less, he will not be affected significantly by changes in market prices and need to take them into account. Longer-term bonds can have wider price swings during their lifetimes.

Price fluctuations have only one significant meaning for the true investor. They provide the opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. True investors can pretty much ignore all other price points and simply wait patiently.

If you put much of your portfolio on permanent autopilot, you can fight the prediction addiction, focus on the longer-term, and tune out Mr. Market’s mood swings. JOE BRENNAN COMMENT: I rarely make predictions because people tend to become married to their predictions which could lead to substantial losses when the predictions are wrong or badly timed.

Top performing mutual funds and stocks from previous years are frequently the investments of choice by newer investors which leads to underperformance due to newer investor money being put to work at higher prices of the underlying stock issues and other reasons. JOE BRENNAN COMMENT: High performing stocks tend to generate strong interest from newer investors which leads to underperformance since newer money is being invested at higher levels which invariably leads to underperformance over time. The opposite could be said about certain low performing stocks.

Beware of excessive one-time expenses and charge offs when the stock market has a bad year. When the overall markets are doing bad, investors expect poor individual stock performance. So many companies will make the losses in that year appear so substantial that the profits in following years will be artificially high. One way to overcome this year-to-year fluctuation due to special one-time charges and such is to use the average earnings over the past 7-10 years when attempting to value a stock via its PE ratio and such.

A good way to determine earnings growth can be taking the average earnings over the past 3 years and comparing that to the average over 10 years. Another good thing to do is compare the PE ratio of the company with the PE ratio of the major market index it falls in. 15 or less is probably a good number to target for PE and a number substantially less than the PE ratio of the associated stock market index. A good way to calculate current PE is using the current price and dividing by the average earnings over the past 3 years.

E/P ratio (inverse of PE) needs to be at least higher than the interest rate of high-quality bonds at the time for the stock to even be considered.

An investor can always prosper by looking patiently and calmly through the wreckage of a bear market. If you build a diverse portfolio of stocks whose current assets are 2+ x their current liabilities, and whose long-term debt does not exceed working capital, you should end up with a group of conservatively financed companies with plenty of staying power.

Price/Book should be 1.5 or less.

Managers prefer doing share buybacks over increasing dividends because increasing dividends lowers the value of their own stock options while share buybacks increases the value of their own stock options.

Margin of Safety for Corporate Bonds: Compare the total value of the company with the total amount of debt. If the business owes $10B and is fairly valued at $30B then there is room for shrinkage of 67% in value before the bondholders will suffer loss.

There are large inefficiencies in the stock market and market prices are often nonsensical. By being a diligent investor, you can readily take advantage of gaps between price and value at both extremes – when prices are excessively high and when they are excessively low.

Credit ratings on bonds are frequently indicative of the quality of a company and its stock. The lower the yield on bonds or preferred shares, the more likely the stock is to provide a satisfactory investment, and the smaller the element of speculation involved in its purchase. However, be careful to ensure you buy the stock at a good price. Frequently, high quality companies are priced high due to investor excitement, excessive optimism, and such.

The higher the growth rate you project, and the longer the future period over which you project it, the more sensitive your forecast becomes to the slightest error.

The margin of safety is the difference between the earrings dividend (1/PE) + dividend of index or stock and comparing that to the interest rate on bonds. For example, for SPY [PE (trailing 12 months -ttm) of SPY is 27.45 and the dividend 1.21%] the present margin of safety to buying it today would be 3.64% + 1.21% = 4.85% – 4.65% =0.20/4.65 = 4.3% margin of safety which is far too small to risk putting money in the stock market. A good target is at least 33%.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing. So, use any downtime you might have to your advantage by gaining this knowledge and learning these skills and techniques (https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/).

Make it your goal to learn these investment techniques so that you can progress towards achieving the financial freedom and independence you’ve always dreamed of. I would have done so much better if I had learned this stuff years ago!

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond).

#selfimprovement, #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket