On Friday morning, all three major averages (the S&P 500, the Dow and Nasdaq Composite), which track the stock market’s overall performance, were on pace to closing with weekly losses. In fact, the S&P 500 was headed toward its worst performing week in two months.
There’s no doubt this up-and-down ride in the markets has been the regular since 2020. So, what should investors be doing?
Many financial experts will tell investors to look at this as an opportunity to buy stocks, bonds and other investment vehicles at a bargain, avoid unnecessary risk, diversify and be patient. But what should a financial disciple who invests be doing?
Well, the same, really…
While there is some good advice coming from the finance world, God’s Word is full of it, too. For instance, we’re instructed to spread among seven, even eight, because we do not know what evil will come (Ecclesiastes 11:2).
Understanding the importance of investing isn’t just a worldly thing—it’s a biblical thing. So, no matter what is happening in the market, keep these tips in mind:
- Timing is everything
Interestingly enough, the Bible even warns us that there is a time and place for everything…
Ecclesiastes 3 begins with, “To everything there is a season, A time for every purpose under heaven.” And Ecclesiastes 3:6 says there is, “a time to gain, and a time to lose.”
Investing is always a wise practice. But doing so at the wrong time is not wise.
What I mean is, if you do not have cash (that is, enough to cover an emergency), investing now would be bad timing. When you cross paths with the unexpected—and expensive—you may end up falling into debt, such as credit cards, or dipping into your investments (or retirement savings for many of us). And that may come with extra taxes and other penalties.
- Don’t invest money you cannot afford to lose
Only invest with money you wouldn’t miss if you never got it back. Investing requires patience, because returns typically take time. The Bible warns us not to be hasty (Proverbs 21:5). So, watch out for those “get rich quick” ideas.
What we use to invest should only come from our disposable income. That means the bills must be paid first, food must be put on the table and the emergency savings account must be funded; because any investment could lose its value, even all of it. And if that happens, you don’t want to end up in a tough situation, simply because you were counting on using that money to cover your needs.
- Diversify your assets
Remember what it says in Ecclesiastes 11:2: spread among seven or eight.
In other words, don’t put all your eggs in one basket.
I think of my mom every time I hear this saying. She’d continue with, “Because when the basket drops, all the eggs break.”
Traditional portfolios look something like 60% stocks, 30% bonds and 10% cash. But depending on your financial situation, your age, your goals and needs, this may look very different.
But the point is: invest the money you have in different assets. Getting a good idea of which assets to invest in (precious metals, cryptocurrency, stocks, real estate, etc.) and how much leads me to the next tip…
- Seek wise counsel
Yep. This is encouraged in the Bible, too.
It says that it’s foolish to lean on your own understanding, but it’s wise to get advice (Proverbs 12:15).
It doesn’t hurt to seek advice from others. After all, we’re not expected to know everything; and for many of us, investing can be intimidating.
For counsel from a biblical perspective, you can speak with a Kingdom Advisor, a Christian financial professional who is trained in biblical financial advice. Or you can get information from Sound Mind Investing, an organization that provides biblically based strategies to do-it-yourself investors.
(Learn more about them here: https://kingdomadvisors.com and here: https://soundmindinvesting.com.)
- Maintain an eternal perspective
Certainly not least, keep God at the forefront of your mind and heart.
To me, this is actually the most important, because it has helped me ignore negativity, trust no one but God and be a better person.
When you’re conscious of keeping God at the center of your life, especially when it comes to money and possessions, you learn not to be swayed by things that make most people nervous. You learn to be content. You learn to depend on Him as your Provider. You learn to believe in God’s economy. You learn what’s really important.
I strongly encourage you to read the entire chapter of Ecclesiastes 3, where this verse is found: “…nothing is better for them than to rejoice, and to do good in their lives” (Ecclesiastes 3:12).
God wants us to practice wisdom, because He wants us to have a good life. He doesn’t want us to work so hard but never enjoy the fruits of our labor. He wants us to have an abundant life.
But He wants us to be able to do good.
So, if you hear Him telling you to be a little unorthodox… be unorthodox.
If He tells you to sell your possessions and give them to the poor, do it. If He tells you to travel abroad to share the Gospel, do it. If He tells you to give more than you invest, do it. Because as you give, so will He give back to you… in good measure, pressed down, shaken together and running over (Luke 6:38).
Melody is the founder of financial coaching business Centsible Finance LLC. She earned a bachelor’s in public relations from the University of Florida in 2014, and a master’s in global strategic communications from Florida International University in 2017; but she discovered her passion in personal finance and writing, as well as a closer relationship with the Lord, after joining a Compass – finances God’s way study in 2020. She now serves as a volunteer on the Compass Florida board, is the editor for the Compass blog, and a facilitator and trainer for financial discipleship studies. Melody and her husband, Nate, live in South Florida.