[Editor's Note: Two of The White Coat Investor columnists are at the opposite ends of their investing careers. Anthony Ellis semi-retired at 58 years old, and though he still works part-time as a psychiatrist, he's spending plenty of time in the next phase of his life. Francis Bayes recently graduated from his MD/PhD program, and he's near the beginning of his investing career. We thought it'd be fun to gather them together and ask them questions about investing and retirement planning to see how far apart (or close) their perspective is when it comes to building wealth. Here is the product of our email conversation.]


By Dr. Anthony Ellis, WCI Columnist


By Dr. Francis Bayes, WCI Columnist

Here is the conversation between Anthony Ellis and Francis Bayes.


What’s your asset allocation these days, and why did you decide on that? How much has that allocation changed in, say, the past 5-10 years?

Anthony Ellis: 

My current asset allocation is not very indicative of my past investing habits, as it is in flux. I am in the process of moving my 401(a), 457(b), and an old 403(b) over to Fidelity, where I have the bulk of my retirement funds. As part of this process, these accounts have been de-risked to some degree, and the 457 and 403(b) are in “fixed income” type funds. The 401(a) is in a stodgy Fidelity 60/40 Puritan fund.

Prior to this, the 457 “bucket” had been 93% equities and 7% bonds that actually beat the S&P 500 for a few years and returned about 15% across seven years at my last full-time job. The 403(b) from a prior job was all in one specialty technology mutual fund. The 401(a) “bucket” was a 70/30 mix that had returned about 11% across seven years. Then, the pandemic changed the game a bit, and 2022 was a tough year for most allocations.

The exact current percentages are as follows:

  • US equities: 46%
  • International equities: 12%
  • Cash: 33%
  • Bonds: 4%
  • Other, miscellaneous: 4%

So, the allocation currently looks like a 60/40 portfolio with the 40% in cash and other yield investments, rather than bonds. This overweight cash position is related to the transition to Fidelity and the Fed’s anti-inflation interest rate increases. The rapid increase in rates has created a historically unique environment and demolished bonds in 2022 while also crushing the common 60/40 portfolio. The most recent bump had taken rates to a 22-year high with mortgage rates also at a 20-year high. That’s a time frame spanning two-thirds of my investing “career.”

I’m guilty of “market timing” since the 2020 pandemic bear—my old portfolio was generally 70/30, but it held bonds. I sold the bulk of the bonds after the Fed rescued the market in the spring of 2020, and I never fully repurchased them. This turned out well for me. As you know from prior columns of mine, I day-traded my bond money across 2020 and into 2021 and did well as the market recovered quickly in 2020. It was not difficult to trade stocks in a rising market.

I’ve also done a very “non-WCI” thing, having given about half of our nest egg to a fiduciary investment management company. It now manages the bulk of our equities for an AUM fee. My reasoning was that I felt the post-pandemic situation required stock-picking skills I did not have, and I wanted to reduce the stress of “doing it all myself” as I have since 2017. In addition, the company provides market insights and retirement Social Security planning. During my “go-it-alone” tenure from 2017-2022, our nest egg grew three times due to high contributions, decent returns, luck, and the 2022 sale of our McMansion.

Francis Bayes:

Do you plan to compare how well your DIY portfolio does compared to the investment management company’s portfolio?

Anthony Ellis:

No, I do not. They are managing a 100% equity portfolio, and I am managing the rest. Clearly, the equity-only half will take more risk and likely will have higher returns. If you mean my tenure from 2017-2022 as my own money manager, I’d also say no. I hoped that the management company would do better than an S&P index fund in the context of “post-pandemic inflation world,” the historical changes in interest rates, and the “AI tech bubble of 2023.” I may turn out to be wrong, but I think that the company might be better at spotting trends in this “new world.” I’m sure others think there is nothing new about the current situation.

Francis Bayes:

My asset allocation is ~98% stocks and < 2% crypto. More specifically, my stock allocation is: 60% US large caps, 15% US small cap value, 20% international large caps, and 5% international small cap value. I own just enough of each sub-asset class to minimize future regret.

The WCI philosophy may advise against 100% stocks, but I think 2022 has validated that my asset allocation is appropriate. I was excited to not only buy stocks but even crypto! My asset allocation was 100% stocks until I started buying crypto in 2021. I prefaced my crypto column by saying that I follow the WCI principles (e.g., insurance, saving rate, staying the course, index funds) because I expected to receive pushback from some readers. I wonder if any of them were Millennials or Gen Z. Maybe crypto will go to zero many years later, but if I listened to them, I would not have just kept buying before the current rally.


Anthony, knowing that Francis, while still an intern, already knows so much about investing and has already made big strides in his financial literacy, can you think back to what you would do if you were in his spot?

Anthony Ellis:

Well, the biggest mistakes I’ve made have been elucidated in a prior WCI column about all the money miscues I made. Overall, picking index funds, avoiding individual stocks, building a smaller house, and developing some Roth money would have worked out better. Having an investment plan at age 30 instead of at age 50 would have been nice, too.

Francis Bayes:

Now that I am a psychiatry intern, I am curious as to how you would have started your career in psychiatry differently had you been financially literate.

Anthony Ellis:

I started at a local hospital with a combined inpatient/outpatient position. It paid a salary and a bonus based on productivity. I was doing consults at one hospital at 7am, then rounding at another hospital from 8:30-10:30, and then splitting my outpatient time from 11am to 5:30pm with another partial hospital site and regular outpatient work at yet another site. This schedule—along with a growing family, increasing administrative duties, and more hours—led to my first brush with burnout in only seven years. Looking back, I think I chose the most difficult schedule and always ended up becoming the medical director of more sites to establish and then advance my career.

It dawned on me during the 2007-2010 recession that I needed to diversify my income and not have all of my eggs in the same basket at the whim of the economic cycles and ever-changing administrative managers. I was given a bad contract in 2011 by a new administrator and two of the three psychiatrists in our system left, along with other specialty physicians. Instead of doing weekends as part of a job, I changed to an all-outpatient position with a shorter commute and sold my inpatient weekends to another hospital. This change to 8:30-4:30 and no unpaid weekends or holidays boosted my income with the side gig dollars, a large percentage of which went into optimizing all retirement accounts. In addition, I started taking full advantage of a 457 plan and making catch-up contributions in all accounts.

So, the answer for me was to optimize leverage, work outpatient, take no unpaid call, and sell weekend work to stoke retirement accounts. The outpatient positions generally had all holidays and weekends off, and the inpatient units had to pay a premium for this coverage.

As I wrote in prior posts, I should have used the Backdoor Roth IRA strategy, invested more and earlier while being more frugal, stuck to index funds, had a written plan at the start of my career, and perhaps not built the McMansion. It also helped tremendously to work in a position that had a defined benefit pension plan for physician executives.


According to a Bank of America study written about by Nick Maggiulli, “Younger wealthy households (those aged 21-42) were more skeptical of traditional investments and more likely to support sustainable investing (i.e. ESG) than older wealthy households (those 43 and up).” Francis, do you think that’s true?

Francis Bayes:

Morgan Housel wrote about how the circumstances in which we grow up and start earning money shape our investing worldview. My generation likely has fewer gold bugs than previous generations because we have only known secular bull markets for stocks and bonds as well as low inflation. But I think a lot of us (especially Millennial physicians) feel like we are late to the party and have FOMO. We read bloggers like Mr. Money Mustache, WCI, and Physician on Fire and cannot imagine how we would be FI before 60, let alone 50. We feel like we need alternative investments like crypto to achieve FI as quickly as those whose prime working years followed the Global Financial Crisis.

older investor vs younger investor

Although Millennials and Gen Z might be more likely than other generations to regard medicine as a “job” rather than a “calling,” I suspect we are more likely to own “meaningful” investments because we also like meaningful consumerism. The marketing behind ESG is similar to those of brands that sell products and “do good” with each sale of socks, glasses, toothbrushes, etc. If Millennials and Gen Z are more financially literate, they would be less interested in ESG. But it is a BIG if.

I am not sure that Millennials and Gen Z would bother to look under the hood of ESG investments because they would ask Reddit a question that has been asked myriad times rather than read a couple of columns that answer their question. For example, I predict that the majority of retail investors who have owned ESG funds were upset at Facebook for how they affected the 2016 election, even though Facebook’s parent company, Meta, is still one of the top 10-20 holdings of the biggest ESG ETF at the three biggest ETF issuers: BlackRock (ESGU), Vanguard (ESGV), and State Street (SPYX). Even Exxon Mobil is in ESGU! Those who sell these funds know what they are doing, and they are betting on younger generations to not educate themselves—just as others (shrewdly) bet on prior generations to not educate themselves about index funds.

If anyone wants to support sustainable investing, I think the best strategy might be FRDM as an alternative to emerging market index ETFs. Its fund manager focuses on “countries with higher personal and economic freedom scores.” I do not own it. But I don't like to oppose something without suggesting an alternative.


Anthony, what are your thoughts about more alternative investments, like ESG investing or crypto? We already know that Francis invests at least some in crypto.

Anthony Ellis:

I have dabbled in crypto but really have no long-term investment or interest there. I’m interested in investments that give me the highest return for the lowest risk, since I am now almost 60 years old. I’m much more likely to invest in an exchange traded fund full of healthy large company dividend payers—like SCHD or NOBL—rather than cryptocurrencies.

At some point, I feel like I might have less cash and more bonds again even though bonds have been mostly losers since the pandemic.


Anthony is wealthy enough to have retired in his 50s. On your current trajectory, Francis, when would you want to retire?

Francis Bayes:

If my mind and body allow (as Dr. Ellis wrote about in his column on functional longevity in retirement), I want to be doing research in any capacity beyond age 70. Even if I stop doing research at some point, I hope that I can work with those who have mental illness into my 60s. I want to be working part-time and volunteering part-time in community clinics and churches once I’m financially independent.


Anthony, at this point in your life, now that you’re semi-retired, what’s your end goal? Do you want to use up every nickel on yourself and your wife? Do you want to leave an inheritance to your kids? Is there something else that you’ve earmarked the money for?

Anthony Ellis:

I would like to leave my children an investment education and a chunk of money each. We also will have paid for a four-year degree for each of them.

Recently, I was given a chance to take a lump sum buyout on a pension I earned from 2001-2011. When I left that hospital in 2011, the pension was only worth $140,000. Recently, the payout amount was $422,000, having almost tripled in the intervening 12 years. I can invest that money and try to achieve a fairly safe 5% return approximating the noninflation-adjusted fixed benefit of around $24,000 per year. But, having taken the lump sum, the original nest egg will stay with us instead of disappearing when my wife and I die. It’s currently invested in a money market fund at around 5%, although it may be harder to safely achieve that amount when the Fed starts cutting interest rates in 2024.


Francis, you’re pretty young in your investing career. Map out the next, say, 40 years of your investing life. Do you have a path you want to take?

Francis Bayes:

As I wrote in my “If you want more money” column, I view stocks as a 20-year investment. Once I’m 50-ish, my wife and I will reconsider my allocation to stocks and start buying bonds depending on how much risk we want to tolerate in my 60s. I think I will be as conservative in “peri-retirement” as I am aggressive now. After buying some T bills for my parents recently, I agree with Dr. Bill Bernstein that the hassle of directly buying nominal Treasuries and TIPS is better than buying funds for “liability-matching.”

Maybe I will dabble in a few other alternative investments (eg, I like art!). I do not think I would want to go through the hassle of K-1s or managing real estate properties, but we will see if my tolerance for hassle changes. After all, I have churned through credit cards, which some view as a bigger hassle. I have a constant struggle between aversion to hassle and curiosity about new opportunities.

Which of these investors do you relate to most? What advice do you have for Francis? What can you learn from Anthony's investing career? Comment below!