What a year for investors! The stock market is down double digits. The bond market is down big, as well. Inflation and interest rates, war and politics are complicating the issue.
After years of believing the only direction was up and growth every year was the norm, this is the first major correction many of us have ever experienced. And the result is panic, fear and concern about what the future holds.
So, what gives, and what should an investor do? Go all in, pull out, redirect, or crawl up into a fetal position?! 😊
Well, what does God have to say about the matter? If up is good and down is bad, and our emotions just ride the roller coaster of temporal gains and losses connected to earthly outcomes, do we even have the right objectives? What is God’s will for us when investing?
My blog today represents no endorsement of any investment product or person. Instead, we can go to His word for answers.
I encourage you to prayerfully consider these five themes when thinking about what to do:
- Count the Cost. In Luke 14:28-30, Jesus tells us we should not be investing if we don’t have the money.
When budgeting, Compass advises folks to allocate at least 10% of what they make toward saving/investing. Meaning, we can invest as a result of controlling our spending on income earned, not as a result of borrowing.
- Diversify. In Ecclesiastes 11:2, Solomon counsels us to divide our investments among many places (seven to eight), because we don’t know what risks lie ahead. Said another way, don’t put all the eggs in one basket, and avoid risky investments where everything could be lost. Great advice from maybe the wisest human to ever live.
- Have a Plan. In Proverbs 21:5, Solomon teaches us planning plus hard work leads to prosperity, while hasty shortcuts lead to poverty.
Do you have a long-term plan for investing, or is your hope to get rich quick? Are you willing to commit to steady plodding and stick with it through the ups and the downs?
Interestingly, the S&P 500, a benchmark index for U.S. stocks, grew by an average of 6% per year over the last 20 years. However, if you’d missed just the top 20 days of its growth over that period, your 20-year return would have averaged 0.1% per year, basically breakeven.
- Be Clear on His Objective. In Matthew 25:14-30 (Parable of the Talents), Jesus drives home two important points on investing. First, He tells us we are stewards investing God’s money (God owns it all). Therefore, whatever we do, we better be faithful. Second, He tells us God expects a return on His investment, which likely includes His investment in our time, talents and treasures. In the parable, the only difference between hearing “well done” and “you wicked and lazy servant,” was that two servants multiplied what they were given and the third didn’t.
- Connect to His Purpose. For many, the goal of investing is to accumulate wealth for the sake of being wealthy. But in Luke 16, Jesus warns us this is a slippery slope. In fact, He says God’s purpose for wealth is for us to use it to serve others and glorify Him.
Is your investing priority to glorify God and use wealth to advance His kingdom?
To continue growing on your financial discipleship journey and learn more about what the Bible says about investing, check out www.compass1.org for videos, stories and calculators.
Ultimately, the eternal prize of hearing Jesus say, “Well done, my good and faithful servant” is greater than any gain or loss we could ever imagine or realize here on earth. So, align your investment strategy with the will and word of God. In the long run, you will be just fine.
Keep charging for Christ,
CEO, Compass Global
After nearly three years in a mentoring relationship with Founder and Chairman Howard Dayton, Brandon joined Compass-finances God’s Way as president and CEO in September 2019. Brandon graduated with a B.S. in finance from the University of Illinois and an MBA from the University of Iowa; and also studied international business at the Universidad de Alicante in Spain, and Latin American business and culture at the Instituto de Idioma Español in Cuernavaca, Mexico. Brandon and his wife, Deb, are actively involved in ministry in their local church and community. They have three daughters, Kay, Nina, and Georgia, and currently reside in Iowa City, Iowa.