In this month's cover article on faith, I kept seeing investing principles being taught as well. With apologies to John Ortberg for borrowing his observations and applying them in an entirely new direction, here are some of my thoughts.

  • Stewardship, managing God's wealth with His priorities and purposes in mind, is an assignment given every Christ-follower.
    Just as this story begins with Jesus giving His disciples an assignment ("get into the boat and go ahead of him to the other side" – Matthew 14:22), so you have your wealth-related marching orders as well. You're on a journey during which you're forewarned you will have your share of trouble. (John 16:33) It will require obedience and faith.
     
  • You need an investing boat that will carry you safely across occasionally turbulent economic waters.
    In stewardship terms, your boat is a biblically sound, personalized money-management strategy. It's a plan that guides your spending, saving, investing, and generosity. Every financial, investing, and giving decision should flow from your plan. It should be designed to assure your safe arrival at the end of your financial journey. It would be foolish to think you could survive the wind and violent waves for long without being in a well-built boat.
     
  • Unlike Peter, you need to stay in your boat.
    It's generally not safe to "think outside the boat." Unfortunately, many Christians don't even take the time to build their boat. Or, if they have one, they don't always stay in it. Being in the boat is a lot safer than being in churning waters. This should be familiar advice to SMI readers: stay with your plan.
     
  • Expect the wind.
    The disciples had been on the lake before. They knew ahead of time that heavy headwinds were a possibility, if not a likelihood. So they pressed on. In the same way, you know there will be challenges on your financial journey. They can take many forms — unemployment, unexpected expenses, health setbacks, a bad economy and weak markets to name a few. When they arise, you shouldn't be surprised. You should anticipate and plan for them. Be prepared.
     
  • Ignore the wind and focus on Christ.
    You can slow down your progress by focusing your attention on the wind around you. It can cause you to grow fearful and react inappropriately. Stay in your boat, and trust the One who has said, "Never will I leave you; never will I forsake you." (Hebrews 13:5)

Let's look at some of Mr. Ortberg's other takeaways from the passage and see how they might apply to your investment life.

  • "Everything is risky."
    That's the conclusion from scientist Larry Laudan's study of risk-management. Still, some things are riskier than others. Navigating risk is essentially what selecting your portfolio mix is all about. Own more stocks and you have more potential for reward but with a greater risk of loss. Own more T-bills and CDs and you have more safety but with more risk of losing purchasing power in the face of inflation. The challenge is to balance the reward you seek with the risk you are willing to take. We do the research and give you the articles and tools to help with that.
     
  • "The decision to grow always involves a choice between risk and comfort."
    You might long for a smooth ride and a great investment return, but the journey doesn't unfold that way. Even with the best of strategies, there will be occasional setbacks that can cause emotional distress. SMI's investing temperament quiz will help you identify your comfort level, whether it be the security-conscious "Preserver" or the risk-tolerant "Daredevil."

    Quoting from Blood in the Streets: "Nothing is more surely condemned to failure than a high-risk strategy pursued by a low-risk man; he will always flinch at the point before the strategy has succeeded, and will throw away his potential gains in an attempt to leap back to the security he actually prefers.… To be a successful investor you have to be right, but in your own way. It is not only a matter of knowing yourself. It is even more important to be yourself."
     
  • "Failure is not an event, but rather a judgment about an event."
    The markets don't always offer positive reinforcement. In the short run, you can lose money following your plan, or you can make money deviating from it. When that happens, "good" behavior is looked at as a failure and "bad" behavior is rewarded. The judgment you make about any financial "failure" must be made within the context of your personalized plan. Decisions you make that are consistent with your plan are, by definition, "wins" — regardless of the profit outcome. In the long run, staying with a structured, unemotional strategy for making investment decisions will serve you well on your financial journey through life.