Under the best of circumstances, the Bible describes us as strangers in a strange land, exiles living temporarily far from home. But this? Well, this is really strange.
Grocery store shelves picked clean. The kids — even our 5th grader — engaged in “distance learning.” And gas below $2.00 a gallon.
In one sense, it’s horrible beyond words. Many people have died. Many others are sick.
It always feels wrong to turn too quickly to financial matters at time like this, but the extreme volatility and losses in the stock markets have been jarring as well. Even for seasoned investors, it may be unnerving.
Now is a good time to consider all that truly matters, because so much of what truly matters hasn’t changed at all.
I once asked SMI founder Austin Pryor why he used 2 Timothy 1:7 for inspiration in naming his company. I’ve been involved in stewardship ministry for 30 years and, before discovering SMI, had never heard that verse used in the context of financial stewardship.
He explained that when he was on staff with Cru, one of the popular handouts used in staff training was “The Paul Brown Letter,” written by ministry Founder Bill Bright. Here’s a relevant excerpt:
Now you may ask, “What is the ‘Sound-Mind Principle’ of Scripture?” In 2 Timothy 1:7 we are told that “God has not given us the spirit of fear; but of power, and of love and of a sound mind.” The sound mind referred to in this verse means a well-balanced mind: a mind that is under the control of Holy Spirit, “remade” according to Romans 12:1-2.
There is a vast difference between the inclination of the natural or carnal man to use “common sense” and that of the spiritual man to follow the “Sound-Mind Principle.” One, for understanding, depends upon the wisdom of man without benefit of God’s wisdom and power; the latter, having the mind of Christ, receives wisdom and guidance from God moment by moment through faith.
Are your decisions based on unpredictable emotions and chance circumstances, the “common sense” of the natural man? Or do you make your decisions according to the “Sound-Mind Principle” of Scripture?
“My thinking in 1990,” Austin explained, “was that the verse not only points out the Resource we have as Christians to make Spirit-led decisions, but also mentions fear (which many have when it comes to investing and which we hope to help them overcome), as well as self-control or self-discipline (which is a requisite for successful investing).”
At all times, what sets biblical investing apart is making prayerful, Spirit-led decisions with the overriding goal of glorifying God. But especially at times like this, aren’t you glad to have such a “Resource” available?
With so many changes swirling all around us, isn’t it good to remember and reflect on the truth that God’s goodness, greatness, and ability to help never change? (For a wonderfully reassuring review of God’s unchanging nature, read this article by Austin’s son, Matthew: The More Things Change, The More God Stays The Same.)
Two weekends ago, I talked with the parents of one of our son's soccer teammates. The man found out he’s going to lose his job later this year. His wife was completely at peace. She explained that her Jewish grandmother had fled Russia as a young woman, fearing for her life. She came to this country with nothing and built a life. The woman I talked with said the impending loss of her husband’s job could not possibly compare to the trials her grandmother went through, and that as long as she has her family, she will be content. If they have to downsize, so be it. Stuff, she said, is just stuff. It’s family that matters.
I can relate. Years ago, I went through one of the most difficult periods in my life. I’ll spare you the details, but it was a season of deep concern, of wondering where God was in all of the uncertainty I felt, of countless sleepless nights. I remember one night in particular when I decided to look in on our young children as they slept. In that instant, my cares seemed to fall away, replaced by a deep sense of gratitude. My concerns over all that felt so fragile, and any worries about what I might lose, were overtaken by a fresh reminder of all that I have.
Of course, this is an area where much has changed. The markets, and probably your portfolio, are much lower than they were just a month ago. Still, even here, there’s much that hasn’t changed. Or that shouldn’t change, or that doesn’t need to change.
Your asset allocation. While you might feel a lot older, you are still about as old as you were a month ago. And your risk tolerance probably hasn’t changed. While it’s true that there’s nothing like a downturn to find out how risk tolerant you really are, the speed and severity of this downturn has taken everyone by surprise. So I wouldn’t be too quick to conclude that you’ve taken too much risk. Stick with your plan and let the objective rules built in to SMI’s strategies be your guide.
Your investment strategy. The beauty of using a rules-based approach to investing is that the rules will do what they do. If they call for a change, you make the change. But this isn’t the time to change strategies. Hopefully, you chose the approach you’re using because it’s one you could live with in good times and bad.
If this bad time feels worse than you imagined it would, that’s normal. It’s human nature to feel the pain of loss more acutely than the pleasure of gain. Just remember, as we say in the Multiply study, one of the biggest risks investors face is the risk of getting in their own way. It’s okay to feel bad while moving forward.
My wife and I have not made any changes to our portfolio. We manage a large percentage of it using SMI’s Dynamic Asset Allocation strategy and have been grateful for that strategy’s relative stability. The rest is positioned with a higher level of risk. While it’s not pleasant to see declines in value, it would be far less pleasant to try to figure out what to do on our own. Without objective criteria to base decisions on, it’s anyone’s guess what might be helpful and what might only bring about more unpleasantness! And guessing feels like neither a good strategy nor good stewardship.
Your investment habits. This week, I happily added to each of our children’s 529 plan accounts. I always take pleasure in making these monthly contributions, grateful that we can afford to do so. This week, I had one more reason to be happy about making the contributions. A falling market tends to reward those who use dollar-cost averaging.
If you make monthly contributions to a retirement or college account, keep making those contributions.
Some changes to consider
At a time when many are fearful and some seem intent on using social media to further stoke fears, the world needs people of faith to be ambassadors of hope. If you’re not in the habit of checking on an elderly neighbor, why not give them a call to see if they need a grocery run (read about a college student who created a network of “shopping angels”) or just a word of encouragement?
One of our sons takes drum lessons and we got a call from his teacher the other day. He said the school where he teaches is going to be closed for a while but that he’d be happy to give lessons over FaceTime. At first, our son wasn’t crazy about that idea. But as we talked about the economic impact all this “social distancing” may have on his teacher, he saw how important it would be to continue with his lessons.
How could you help someone who may be feeling some economic or emotional strain right now?