We think we can time the market.

the more complex an investment is, the less likely it is to be profitable. Index funds outperform actively managed funds in large part simply because actively managed funds require expensive active managers. Not only are they prone to making investing mistakes, their fees are a continual performance drag on the portfolio.

Since deflation occurs when the price of stuff falls, when the money you’ve lent is paid back, it has more purchasing power. Your money buys more stuff than when you lent it. This increase in value helps to offset the losses deflation will bring to your other assets.

We believe we can pick winning mutual fund managers.

Actively Managed Stock Mutual Funds (funds run by professional managers, as opposed to Index Funds) are a huge and highly profitable business. Profitable for the companies that run them. For their investors, not so much. So profitable that there are actually more mutual funds out there than stocks. According to the U.S. News and World Report,5 as

As an aside, there are studies that indicate holding a 10-25% position in bonds with 75-90% stocks will actually very slightly outperform a position holding 100% stocks. It is also slightly less volatile. If you want to go that route and take on the slightly more complicated process of periodically rebalancing to maintain the allocation, you’ll get

Each year I calculate what income we have and—consistent with remaining in the 15% tax bracket—I shift as much as I can from our regular IRAs to our Roths. This is in preparation for the RMDs coming at age 70 1/2. When that time comes, I want our regular IRA balances to be as low as possible.

Everybody makes money when the market is rising. But what determines whether it will make you wealthy or leave you bleeding on the side of the road is what you do during the times it is collapsing.

This is why you have to toughen up, learn to ignore the noise and ride out the storm; adding still more money to your investments as you go.