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Investing in Uncertain Times

by | Tue, Sep 1 2020

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Stock market graph during Coronavirus pandemic

Uncertainty is an investor’s greatest enemy, and at the moment it seems to be the only thing we can rely on. Yet the current climate also provides opportunities for investing wisely. So as Christians, how should we be stewarding our money in times like these?

Darren Laudenbach is the founder and CEO of God’s Money Matters. With more than 30 years’ experience in finance, he argues things haven’t changed as much as the media might suggest.

Talking to Neil Johnson on Vision’s 20Twenty, he explained that people hoping to invest should make sure they have money quickly available in case of emergencies. But that’s no different to the advice he gave before COVID-19.

Investment, by definition, is putting money into something with hope of a return over a long period of time. “The long period’s the key,” he said. If we’re speculating, we’re going to jump into the property market, the share market, to try to get a quick return, that’s similar to betting. It may not be a win/lose situation, but I’m not a speculator.”

Darren Laudenbach
Darren Laudenbach

Neil asked Darren about the prediction from some economists that we will see a “V-shaped recovery” as a vaccine arrives. “Investment markets are very forward looking, so those kinds of things would be somewhat built into prices we’ve seen already. And in fact we could argue now that it’s been a V-shaped recovery. The US market certainly is on its way to recovery.”

Darren has spoken before on 20Twenty about an 18-year financial cycle, a consistent pattern in the US market for more than 300 years. He says that cycle is still alive and well. We expected what was called a mid-cycle slowdown. We expected that about now. The Coronavirus certainly caused that.”

If the cycle continues as expected, we will see a major market correction, perhaps in the form of another GFC, in the second half of this decade. “The timing is never perfect. We don’t know exactly when. But it’s based on human behaviours of fear and greed, and those behaviours haven’t changed since Adam was a boy.”

So how can our Faith inform our financial decisions? Laudenbach warns that being a Christian doesn’t guarantee prosperity. “God uses natural consequences well. So he will allow us, as Christians, and his followers, to fail in investing, for the purposes either of teaching us something, or for us to lean on him more.”

But the Bible does give us clues as to how we can be wiser investors. For example, when Paul suggests Timothy should model his behaviour as a successful believer, he’s offering advice that can also apply to investors. Laudenbach says we should seek mentors who have made good decisions, and do our best to model their decision-making process.

He also says people who are successful generally are well-educated about the investments they make. He argues that if you’re not considering an option because you don’t understand it, you should work to educate yourself. “I don’t think God ever accepts ignorance. He wants us to learn, grow and develop.”

Laudenbach says the Parable of the Talents as a useful guide. God gives us gifts, and asks us to pray and be discerning about how we use them. “That’s a great example of where we’re called to take some measured risk, we might call it, so be an intelligent opportunist. And we’re looking at particular opportunities, and saying where can I make a return on this money?”

As Christians, we know that all the money on Earth is God’s anyway. Rather than being scared of losing money as an individual, we should always ask God what he wants us to do with His money. “What is the purpose behind it? And what would God have us do with those funds that he’s entrusted to us?”

“What is it that we’re trying to achieve? And then have we got the right instruments to achieve that? Are we using the right tools? And then if we are, sit back, and relax, and let the market do what it does. And don’t watch the daily news and all the bad reports.”

Tune into 20Twenty and join the conversation with Neil Johnson, weekdays on Vision Christian Radio. Click here for your local times.

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