Dear Financial Samurai,
I'm getting a serious case of déjà vu with this March sell-off.
Last year, I sold my house and dumped about 80% of the proceeds into the stock market after a 4% to 7% correction. Then the S&P 500 tanked another 13% to 16%, bottoming out on April 6th.
This time around, I targeted 6,600 on the S&P 500 as an aggressive entry point, roughly the 200-day moving average, and finished deploying about 80% of my cash into the market by Friday. So in essence, I learned nothing about the risk of buying too early and too aggressively.
Well, not quite. I still have strategic reserves in the form of a large 10-year Treasury bond position I can sell and deploy if things get worse. And I will if the S&P 500 gets to 6,500. Then I'm out of excess cash and must live paycheck to paycheck temporarily as I build back my reserves one month at a time.
I feel the exact same way I did in March 2025: uncomfortable and unwise. But then one day last year, the selling stopped, the skies parted, and the market ran for months.
Investing For Your Family During The Dip
Given the current correction, you should not only consider buying the dip for yourself but also for your children. If you have been holding off on contributing to your 401(k), SEP-IRA, IRA, or Roth IRA, now is a reasonable time to start legging in.
What always makes me feel better about losing money in my main portfolio is shifting some cash into my children's custodial investment accounts. Since those accounts are smaller, each contribution makes a proportionally bigger difference.
I will be writing more about this on Monday.
Real Estate Selling Regret And Bonanza
Something strange is happening in San Francisco. Every single property I am tracking goes into contract within two weeks and sells well above asking price. Not by a little. By a new record high.
A remodeled 4 bedroom, 3 bathroom home with 2,560 square feet that would have sold for around $2.85 million two years ago just closed at $4.1 million. I would have been shocked at $3.2 million for the final selling price. The house is seriously nothing fancy.
So what is driving this?
My best guesses are AI employees getting liquid through secondary share sales, foreign buyers returning in force, or the Bank of Mom and Dad coming out in full support to help their kids buy homes. That last reason was true for the buyer of my previous home last spring, where a father paid all cash in 13 days for his son, daughter-in-law, and newborn.
If you sold a property recently and have been watching prices surge, you may relate to this new post: The Pain Of Selling Too Soon In A Rising Market.
It is wild to see record bids happening while bombs are flying and the stock market is selling off. But perhaps there is another simple explanation: during times of uncertainty, the desire to own real, tangible assets that provide utility goes up.
Dealing With Higher Oil Prices
The last time WTI crude was above $100 was the spring of 2022, after Russia invaded Ukraine. That year, the S&P 500 declined about 20%. If oil stays elevated this time, we should mentally prepare for a similar outcome.
The good news is we have been here before and come out the other side. I wrote a practical post on exactly this: How To Survive Higher Oil Prices After The Bombing Of Iran.
After running the numbers for my family of four, higher oil prices will cost us roughly $100 more per month, about $55 from increased gas costs and $45 from everything else where oil is an input. That assumes we change nothing about our habits.
Will that move the needle on consumer spending, the largest driver of GDP? I doubt it, at least in the short run. Americans are fantastic at spending all of our money living in the moment. I'd venture to guess less than 1% of Americans will even bother to calculate how much higher oil prices increase their budget.
In 2022, oil stayed above $100 for about five months before pulling back. We spiked to $119 last weekend and are hovering around $99 today. I do not think oil stays above $100 for more than one month, let alone five. So I will keep buying the dip if elevated oil prices drive the market lower.
Acting With More Information Than Others
Finally, some of you have been wondering when Fundrise's venture product will list. It had originally filed with the NYSE to list on March 9th but was then delayed.
I am glad it was. Last week was about as difficult an environment to launch as we have seen since the tariff tantrum this time last year. I would rate last week a 3 out of 10 for listing conditions, with 10 being ideal.
Because the shocks of higher oil prices and the bombings are now known, I would rate next week a 4 or 5. Even if the S&P 500 continues to slide, at least we understand why. And the more certainty there is about the cause, the easier it becomes to deploy capital with conviction.
For closed end funds specifically, strong management matters more than it does for a typical ETF. Fundrise's decision to delay is a small but meaningful positive signal about how they think.
Read more here: Having Position Is Only Valuable If You Use It Wisely.
Think Of Corrections As Opportunities
I know it is hard to watch your portfolio shrink. But if you are fortunate enough to have steady cash flow and cash reserves, try to reframe every correction as an opportunity to put some of that cash to work.
Historically, March tends to be one of the worst months for stocks. Keep the faith. And don't forget to diversify as well!
Let me leave you with a hopeful chart about just having to survive March and April.
To your financial freedom,
Sam
If you'd like to receive my posts via e-mail as soon as they come out, you can sign up here. If this newsletter was forwarded to you, you can join 60,000+ readers and sign up here.