Our financial world has been a roller coaster for the past 25 years. That is an especially easy comment to make after the dramatic fall of the market in early 2020 due to the Coronavirus, the rapid recovery, and then the fall again in 2022. At first glance, these up and down swings do not encourage getting onboard for the ride. But take a closer look at any chart from the Internet covering a period of more than 20 years and you see is a nice long-term trend. It is a rising market.
Then 2022 arrived! Between the market dropping a lot and inflation, the public view of investment risk has become a lot more skeptical. Even though the market did recover from 2022, there is grave concern about the 30+ trillion in debt and its impact on our future.
Of course, the questions always remain – “is now a good time to start?” or “is this the right time to _______.” (Fill in the blank with “buy,” “sell,” “diversify,” “panic,” or any of the other many possibilities) And, of course, the honest answer is that no person knows the answer to any of those; they only have opinions.
Here are a few ideas to save you from frustration and needless worry, all of which are a matter of perspective and attitude mixed with a lot of experience (both good and bad).
1. Timing your buying and selling sounds good, but doesn’t work
Buying just before a bull (rising) market sounds like a great idea. But I know people who jumped in right at the end of a bull market and sadly discovered what a bear (declining) market feels like. Studies show that buying and selling based upon timing is a strategy that only works if you know when the market is turning – and no one legally knows that! The number of articles about the market rising or falling soon, or next week, or next year, is endless, the predictions are contradictory, and the experts ultimately admit they don’t know (or they are being less than honest).
Together with the idea of timing is the idea of position. It is great to think that if you have the right stock mix at the right time you can make a lot of money. While that is true, you will always be frustrated because no one knows in advance for certain what the right stock mix is at any given time. There is no perfect portfolio predictable in advance to make the most possible.
2. Although many investment advisers won’t say it, the market is all about God
Let’s just be blunt – there is something hypocritical about believing that people should not drink or do drugs while investing in alcohol or marijuana stocks. Your investment choices should be a reflection of who you are and what you believe.
Have an investment strategy and design that strategy to reflect your values and beliefs. Having a Christian world view means looking at every decision through the lens of the Bible. God, our Creator and Sustainer is real and we should make daily decisions with that thought in mind.
Make your decisions to buy or sell a particular stock after prayer and thought, not just because someone you know said this new stock was a “sure thing” or a “good deal.” Anyone who tries to sell you a particular stock as a great buy for you without knowing your beliefs and without knowing all of the details of your investments and your personal investment goals, is probably not doing you a favor.
There was a sure thing in the 1980’s, SH Oil. But it turned out to be a Ponzi (pyramid) scheme. The owner took over $125 million dollars from a wide variety of investors including many people I know. The owner of SH Oil spent 15 years in prison and still owes millions. Many lost their life savings in that “sure thing.” As another more recent example, the name Bernie Madoff may sound familiar. He was a trusted NY financial adviser who holds the record for the largest Ponzi scheme to date, about $50 billion taken from investors. He had a sure thing for his victims – until his fraud was discovered in 2008. He spent the rest of his life in prison.
Sure things and great deals usually aren’t very sure at all.
Be deliberate and careful – it’s God’s money you are investing. Don’t try for quick large gains – investments like that tend to turn into slow painful losses. Be a good steward of His money.
3. Patience is a fruit of the Spirit and a good investment strategy
I will admit that there is a danger in referring to this particular fruit of the Spirit in an article about investing, because the King James Version translates the word “patience” as “long-suffering” and no one wants to suffer for a long time!
Seek Christian counsel in the form of a Christian financial adviser who can guide you to kingdom-focused and wise investments. These are decisions that will have consequences throughout the rest of your life. These are decisions that put the money of the King of Kings and the Lord of Lords at risk. Yes, He can handle a bad day in the market; you could never lose all that He owns, but since it is His money and He wants you to act as a good steward of it, you should be responsible and patient with your investment decisions.
4. Ignorance is not bliss
Do not approach investing in the stock market, in real estate, or in any other means of making money thinking that you can just put a dollar in and get two out without thought or effort. That does happen a few rare odd times, but those are the exceptions that test the general rule. The general rule still holds true, smart investors generally do better than people who invest blindly, just as people who practice and study how to throw darts hit the bulls-eye more often than people wearing blindfolds who just wildly toss darts.
Where do you start? Start with the basic terminology, see Investing for Dummies or a future resource we will publish, Help, I Don’t Speak Woman! (or Financial Adviser). Then attend a few free seminars (better known as sales events) and listen to the sales pitches. Do NOT buy, just listen and learn through your first few (or many) sales pitches. Read and study articles, including a book from the always present Dummies series such as Investing for Dummies, or any of a dozen other articles or books available with a general search for beginning investors.
You should consider hiring a professional financial adviser simply because you will not learn in a short period of time what a financial adviser has learned from years of experience. But before you do, learn how to find and hire a financial adviser who will be able to pay you and your future the attention you need. It will also be helpful if you will learn the basic terminology of investing. It can ultimately save you many questions and much confusion. Knowing what an ETF is, knowing what before-tax and after-tax means, and knowing some of the other basic concepts will make your adviser’s job easier and your life better.
Once you have a grasp of the basics, you should settle into a pattern of investments that follows this strategy: The right investment plan for you is the plan where you understand what you are doing, why you are doing it, and how you expect it to make money for you.
5. Be flexible and willing to change
There is a counter-balance to being patient and that is being flexible. No, you should not be patient in the face of an obvious problem, that is the time for taking action and changing your investment mix to something that is likely to work better. As the economy and political situation changes, so should you and your investment strategies.
Here’s a rarely used idea, but a wise one: use “common sense.” If you don’t understand how the financial product can safely make you money or it sounds a bit odd – do not buy it! And the best investment advice is always, “never invest more in a risky investment than you can afford to lose.”
Many people are afraid to invest because they are afraid they will make a bad decision, Many others who do invest are afraid to make changes because they are afraid they will make a bad decision. Always remember that deciding not to invest or not to change an investment is a decision too, and it could easily be a bad one. Life is full of decisions and the truth is that you will make mistakes. Learn from them and become a wise investor.
6. The life of an investment is long-term, not short-term
If you approach investing in the market as a short-term way to make money, there is a high likelihood that you will be disappointed. Go back to the first section of this blog and take a close look at that chart. Find the year 2000. If you started then, you would doubtless be disappointed because shortly after that the market fell dramatically. But if you pulled out money out just before 2009, you would be even more disappointed because you missed the recovery from what has been called the great recession.
Investing is not a sprint, it is a lot more like a slow walk.
Before investing, start an education process with a time of study. Set some reasonable goals and then start slowly and with prayer and reflection. If you would like some ideas of a few Christian financial advisers, or just to discuss the process of starting or improving your investing, give us a call at The Idlewild Foundation at (813) 264-8713. The Foundation was created to promote Godly stewardship and we would love to help.
About the Author
John Campbell has retired from a 40-year legal practice as a trial attorney in Tampa. He has served in multiple volunteer roles at Idlewild Baptist Church in Lutz, Florida, where he met Jesus. He began serving as the Executive Director of the Idlewild Foundation in 2016. He has been married to the love of his life, Mona Puckett Campbell, since 1972.