Creating an investment game plan is a crucial part of building lasting wealth. Without one, you’re likely to accumulate far less over your lifetime. Now that the S&P 500 briefly corrected by 20% in 2025, we’ve officially entered another bear market. Historically, bear markets have lasted about two years on average, but this one is likely to be much shorter given it is self-inflicted.<\/p>\n
One reason I pinned my post\u00a0How I\u2019d Invest $250,000 Cash Today<\/a><\/strong>\u00a0<\/em>is because I get this question constantly. The amount doesn’t have to be $250,000 in cash, but any amount of money. It\u2019s my real-time roadmap and a way to stay consistent with both thought and action, especially during turbulent times.<\/p>\n After back-to-back 20%+ gains in the S&P 500 in 2023 and 2024, I didn\u2019t want to give back too much of my 2021 gains like I did in 2022. Let\u2019s revisit the investment game plan and see where I could have improved and what I\u2019m adjusting now that the stock market has plummeted. <\/p>\n This isn\u2019t investment advice for you, as we\u2019re in different financial situations. It\u2019s a look into how I\u2019m thinking about managing my own money during a bear market. Please make your own investment decisions appropriate to your goals.<\/p>\n <\/p>\n For background, I\u2019ve been investing since 1996 and have lived through the 1997 Asian Financial Crisis, the 2000 dot-com bust and the 2008 global financial crisis<\/a>\u2014the latter with over $1.5 million invested. During the 2008 collapse, I lost 35%\u201340% of the net worth it took me a decade to build, all within six months. I never<\/em> want to go through that experience again, especially now that I have a family to support.<\/p>\n Our #1 goal in a bear market:<\/strong> Remain DUPs<\/a>, which stands for Dual Unemployed Parents, as opposed to DINKs<\/a> or HENRYs<\/a>. My wife and I share the goal of never having to work for anyone again. We can’t go back at our age. Right now, what we value most is having the time and energy to be with our kids (ages 8 and 5) before they leave home at 18.<\/p>\n We don\u2019t want to come home exhausted after a long day of work. Instead of needing an escape from work and family on the weekends, we want to spend the entire weekend together. And during school breaks, we aim to travel as a family for longer stretches of time. As older parents<\/a>, we already don’t have as much energy as the average younger parent.<\/p>\n As moderate-risk investors, this is our investment game plan to maintain our freedom using the investments and passive income<\/a> we\u2019ve already built. Given my wife and I don’t have steady paychecks, our main goal is to survive the bear market until better times return. <\/p>\n We cannot afford to lose 40% of our net worth again at this stage of our lives. At the same time, we want to take advantage of investment opportunities. This is how we are deploying cash.<\/p>\n With Treasury yields now around 4.3% from 5%, bonds are less attractive than before at 5%. Still, earning ~4.3% risk-free beats losing 20%+ in the stock market. So if you\u2019ve looked down on Treasury bonds before, it\u2019s time to reconsider. The goal isn\u2019t to generate outsized returns\u2014it\u2019s to protect you from downside risk in more volatile assets.<\/p>\n If you are in a high marginal federal income tax bracket, Treasury bonds provide an additional boost since the interest earned is state-tax free. In a bear market, I always want to have at least six months of living expenses in cash. Not only does cash provide psychological comfort, it also enables you to invest in value opportunities. <\/p>\n Given the recent stock market correction, I\u2019m reducing this bond deployment allocation from 30% to\u00a020%, and moving the money to the stock market. Although, I have to admit the sell-off in bonds during the trade wars makes them more enticing. I just think stocks provide greater potential upside now. Less than 5% of our net worth is in Treasury bonds.<\/p>\n I was cautious entering 2025, with the S&P 500\u2019s forward P\/E around 22X\u2014well above the historical average of 18X. After two blockbuster years, some mean reversion seemed inevitable.<\/p>\n At the time, I wrote:\u00a0\u201cGiven expensive valuations, I’m only buying in $1,000\u2013$5,000 tranches after every 0.5%\u20131% decline. The S&P 500 could go back down to 5,000 if valuations mean revert.\u201d<\/em>\u00a0I stuck to that plan and started buying after a 3% dip\u2026 but now the index is down much more, with the S&P 500 falling to\u00a0as low as -4,850\u00a0from an expected floor of 5,500.<\/p>\n Unfortunately, I was not<\/em> cautious or patient enough. I’ve been buying the dip to bloody results and it\u2019s been frustrating and painful. That said, I\u2019ve been buying the dip for 26+ years, and over the long run, it\u2019s worked out. It\u2019s in the short term when it always feels the worst. This latest correction reaffirms why I prefer the steadier returns of\u00a0real estate<\/a>\u00a0over the gut-wrenching volatility of stocks.<\/p>\n In light of the pullback, I\u2019m upgrading my stock allocation from\u00a025% to 35%. Valuations are back down to 19 forward earnings and I have hope things won\u2019t get too much worse. That said, there now seems to be a decent probability the S&P 500 could correct to 4,500, or 2 multiples below the long-term forward P\/E multiple average of 18. Why pay an average valuation multiple when the government is purposefully sacrificing the stock market for potentially lower rates? A recession seems 70% likely now.<\/p>\n About 27% of our net worth is in public equities, with the goal of getting it up to 30%. I will continue to buy the dip, no matter how depressing it is achieve my asset allocation goal. <\/p>\n Here\u2019s a snapshot of me buying the dip\u2014and losing\u2014until Trump, on April 9, unexpectedly announced a 90-day pause on his higher tariffs for all countries except China. The markets quickly rebounded by 9.5%, one of the biggest single-day moves in history.<\/p>\n I expect continued volatility all year, but am hopeful of a resolution to the trade wars by summer. Further, potentially tax cuts and deregulation will help spur more interest in the stock market in the second half of the year.<\/p>\n Investing in venture capital has been a good move so far. I wanted exposure to private AI companies<\/a> because I anticipate a challenging future for our children. I also value the ability to invest in companies I believe are performing well and poised to raise their next funding round at a higher valuation. This type of almost arbitrage and transparency is why I’m a fan of open-ended venture funds<\/a>.<\/p>\n OpenAI recently closed a new $40 billion funding round<\/a>, valuing the company at $300 billion\u2014double its valuation less than 10 months ago. This kind of momentum bodes well for other private AI companies, which may also raise at higher valuations, though nothing is guaranteed.<\/p>\n In hindsight, I should have allocated more than just 20% to venture capital. Still, with public markets in turmoil, we\u2019re seeing IPO delays (e.g., Klarna) and valuation compression. As a result, venture investors must stay disciplined and avoid overpaying.<\/p>\n Below is my Fundrise Venture Capital investment dashboard<\/a><\/strong>. Returns have been steady so far. Once I sell a rental property, I plan to increase my allocation.<\/p>\n For now, I\u2019m\u00a0keeping my Venture Capital allocation to 20%. But I\u2019m open to increasing the percentage to 25% if there are more opportunities. There is likely much more volatility under the surface<\/em>. But mentally, it’s nice not to see it. Hopefully, there will be better valuations in the private markets given the forth has come out of the public markets. Fundrise is a long-time sponsor of Financial Samurai.<\/p>\n About 8% of our net worth is in venture capital, with the goal of getting it to about 10%.<\/p>\n My Fundrise venture capital dashboard <\/p>\n 2025 is shaping up to be real estate\u2019s time to shine and potentially outperform stocks by a wide margin. I\u2019ve been waiting for this moment since 2022, after the Fed hiked rates 11 times in record time. Now, amidst all the uncertainty and chaos<\/a>, expectations are back for\u00a0three-to-five<\/em>\u00a0rate cuts in 2025, from zero-to-two cuts at the beginning of the year.<\/p>\n Pent-up demand, lower mortgage rates, and capital rotating out of funny money stocks<\/a> and into tangible assets are setting the stage for continued strength in many real estate markets. That said, markets that boomed the most and have ample room to build new supply\u2014like Austin, Dallas, Punta Gorda, and Cape Coral\u2014are showing signs of weakness.<\/p>\n The gap between the S&P 500 index and U.S. single-family home prices is large and likely unsustainable. Real estate prices should catch up while the S&P 500 corrects. If the government is going to purposefully crash the stock market<\/a>, then it should do everything it can to support the real estate market, where ~66% of Americans own homes.<\/p>\n Here’s a major tell: Rocket Companies (owner of Rocket Mortgage, formerly Quicken Loans) just agreed to acquire mortgage servicing giant Mr. Cooper for $9.4 billion. This follows their $1.75 billion acquisition of Redfin. You don\u2019t spend that kind of money unless you\u2019re bullish on a real estate and mortgage rebound.<\/p>\n I\u2019m comfortable with this 24.9% allocation to real estate because I\u2019m already heavily exposed\u2014about 50% of my net worth is tied to real estate. Earlier this year, I spoke with Ben Miller, CEO of Fundrise<\/a><\/strong>, and we both agreed that residential commercial real estate<\/a><\/strong> is one of the most attractive asset classes today due to its relatively low valuations.<\/p>\n When faced with the decision to invest in the S&P 500 trading at 22X forward earnings or in residential commercial real estate trading at 20\u201330% discounts from March 2022 highs, I chose the latter.<\/p>\n Since I allocated 0% to debt paydown because most of us refinanced our mortgages and (hopefully) don\u2019t carry revolving credit card balances, the final category to bring my allocation to 100% is financial education.<\/p>\n I strongly believe that financial education is key to building lasting wealth. It\u2019s why I majored in economics at William & Mary, earned my MBA from Berkeley, started\u00a0Financial Samurai<\/em>, and continue to write books. A foundational understanding of asset allocation, risk and return, tax strategy, and the various ways to grow wealth is incredibly valuable.<\/p>\n Unfortunately, most people don\u2019t take the time to read articles\u2014let alone books\u2014about personal finance anymore. I saw this lack of careful reading with my latest April Fool’s Day post<\/a> and the subsequent comments! GotAs a result, they often get blindsided during bear markets<\/a>.<\/p>\n I\u2019ve witnessed this cycle of financial destruction repeatedly since I began working in finance in 1999. People over-allocate to risk assets or go on margin before a big collapse. Others panic sell near the bottom and hold cash for an unreasonably long time. Once you fall behind during a recession, it becomes extremely difficult to catch up to your peers.<\/p>\n Spending just 0.1% of $250,000\u2014$250\u2014on books like\u00a0Buy This, Not That<\/a><\/strong><\/em>\u00a0or\u00a0Millionaire Milestones<\/a><\/strong><\/em>\u00a0is negligible in the grand scheme. But the potential return on that investment can be thousands of percent. <\/p>\n Sadly, it often takes significant financial loss for people to finally take action. That was the case for me during the 2008\u20132009 Global Financial Crisis, which ultimately motivated me to launch\u00a0Financial Samurai<\/em>.<\/p>\n If you don\u2019t develop an investment game plan, you\u2019re likely to accumulate far less wealth than your peers who do. Worse, you might lose a significant amount of net worth due to improper risk exposure and allocation.<\/p>\n Establish your financial goals, then create a plan to get there. If you\u2019re not sure where to start, consider working with a fee-only financial advisor or financial professional<\/a> of some sort. Or, if you have the means and want more hands-on attention, a wealth manager could be an option. Just be prepared to pay up given they charge based on a percentage of assets.<\/p>\n Too many people wing it when it comes to their personal finances. And in 10 years, those who do often wonder where all their money went. Please come up with an investment game plan to help you prepare for the worst of times. <\/p>\nA Review Of My Investment Game Plan In A Bear Market<\/h2>\n
1)\u00a0Treasury Bonds (30% of Cash Holdings -> Down To 20%)<\/strong><\/h3>\n
![\"Kalshi,](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/IMG_1815-1.png\")
2)\u00a0Stocks (25% of Cash Holdings -> Up To 35%)<\/strong><\/h3>\n
![\"Buying](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/buying-the-dip-1.png\")
3)\u00a0Venture Capital (20% of Cash Holdings Staying The Same)<\/strong><\/h3>\n
![\"Financial](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/Financial-Samurai-Venture-Dashboard-Fundrise.png\")
<\/figure>\n4)\u00a0Real Estate (24.9% of Cash Holdings)<\/strong><\/h3>\n
![\"Unsustainable](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/04\/IMG_2091.png\")
<\/figure>\nStrong M&A In Real Estate Bodes Well<\/h3>\n
![\"Commercial](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2025\/01\/IMG_6745.jpeg\")
<\/figure>\n5)\u00a0Financial Education (0.1% of Cash Holdings)<\/h3>\n
![\"Millionaire](\"https:\/\/i2.wp.com\/financialsamurai.com\/wp-content\/uploads\/2021\/01\/millionaire-milestones.jpeg\")
<\/a>Please Develop Your Own Investment Game Plan<\/h2>\n