As the world grappled with the COVID-19 pandemic in 2020, the investing world grappled with its own upheavals. If you had money in the markets, you’ll likely long remember the period from mid-February to mid-March when the U.S. stock market fell 35% in just 16 trading days. Never before has the market so quickly switched gears from an all-time high to a bear market.
For those doing their best to take a long-term approach to investing, there were other unsettling events. With pro sports shut down, the founder of a sports betting site turned his attention to the stock market, live-streaming his day trading as millions of loyal followers tagged along. Then WallStreetBets, a popular group within the social media site Reddit, rallied its legions of followers to bid up the price of several beaten-down stocks, such as GameStop, driving huge profits while battering hedge funds that had short positions on those stocks. (It was difficult to tell what delighted the WallStreetBets crowd more — the money they were making or the harm they were inflicting on the Wall Street establishment.)
The prospect of quick riches (and a fistful of stimulus money from Uncle Sam) surely played a role in the astounding 10 million new brokerage accounts opened in 2020. A sizable percentage of new investors chose a brokerage firm that “gameified” investing by showering digital confetti on the screens of members who made a trade.
To me, it felt like investing was becoming gambling, and any notion that “steady plodding brings prosperity, hasty speculation brings poverty” was being cast aside as quaint, uninspired, and irrelevant.
But then we sent out a survey of our members, asking about their experience in the market last year. I can’t begin to tell you how your responses brightened my spirits.
When we asked what helped our SMI members navigate the big downturn in early 2020, 97% agreed with the statement, “Having faith that God would provide, no matter what happened in the market.” Wow!
Many respondents cited practical factors that helped, too, each reflecting a good-stewardship, steady-hand-on-the-wheel perspective about investing — such as, “Knowing enough market history to understand that the market will experience periods of extreme volatility from time to time” (94%), and, “Following a mechanical, objective investment strategy I trusted” (86%).
Another 85% said, “Prayer.” Prayer!
The faithful response of God’s people who had money in the markets last year never made a single headline. But I’m confident in saying that it surely delighted God’s heart.
The encouragement of God’s Word
When we asked if there was a particular passage of Scripture that readers turned to during last year’s downturn, more than one-third of respondents said, “Yes.”
As the market plummeted, SMI members leaned into verses such as: “Cast all your anxiety on Him because He cares for you” (1 Peter 5:7) and “When I am afraid, I put my trust in you” (Psalm 56:3).
As volatility spiked, they took comfort from biblical affirmations such as “You will keep in perfect peace those whose minds are steadfast, because they trust in you” (Isaiah 26:3) and “I will say of the LORD, ‘He is my refuge and my fortress, my God, in whom I trust’” (Psalm 91:2).
As millions flocked to online forums in a quest for quick riches, our members turned to God’s Word, meditating on verses such as “Some trust in chariots and some in horses, but we trust in the name of the LORD our God” (Psalm 20:7) and “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs” (1 Timothy 6:10).
I read every verse our readers cited, and I was deeply encouraged. We think you will be as well, so we’ve put all of the verses into a document that you can find in the Resources section of our website. Please read them, meditate on them, and be encouraged by them.
The stock market moves in cycles. No one knows when the next bear market will begin, but we know one will begin eventually. We can be prepared by committing to a strategy that fits with our time horizon and temperament, and by filling our hearts with the timeless Truths of God’s Word. As the Bible reminds us in the most-cited verse in the survey, “Trust in the LORD with all your heart and lean not on your own understanding; in all your ways, submit to Him, and He will make your paths straight” (Proverbs 3:5-6).