There is so much uncertainty today…
- The Coronavirus continues
- The new administration’s agenda and Biden’s numerous executive orders
- Continued massive borrowing of money to overcome the impact of the Coronavirus and how could this ultimately create high inflation and higher interest rates
- And then last week, out of nowhere, Reddit users manipulated the price of a company named GameStop against hedge fund managers.
In addition to the above, 24 hour news channels and professionally paid doomsayers are making up all kinds of conspiracy theories to scare people into buying high commission gold and silver. According to them, you would think mankind and the world as we know is about to end.
With all this “NOISE”, the team at CIS has received many phone calls, emails and questions about these concerns. Yet the S&P 500 index is down less than half a percent over the last month, as of January 28, 2021, nowhere even close to correction territory.
My advice? Pray and seek God’s wisdom. Turn off all the “noise” (i.e. social media, the news, the internet and TV) for a few days or maybe even a few weeks. Use the extra time to go for a walk, go hiking, or go fishing in the many parks surrounding all of us. Just find ways to enjoy God’s creation and, while you’re at it, study Matthew 6:25-34.
Matthew 6:25 – Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes?
What will Christian Financial Advisors® do? We will continue to our job by:
- Using long-term Biblical principles and wisdom for managing money that has worked through many good and bad times.
- Never allow emotions, feelings, social media or professional doomsayers with their conspiracy theories to dictate to us how to manage our portfolios.
- Continue investing in Biblically-Responsible, Values-Based companies that do not violate Biblical principles (Ephesians 5:11). They serve mankind with the things we all need like food, clothing, shelter, technology, healthcare, transportation, and more.
- Stay diversified by the wisdom given to us in Ecclesiastes 11:2 and 3:1-8 using long-term strategies built for good and bad times like our “bucket investment strategy”.
- Consistently, monitor and actively manage all our portfolios using a forward-looking approach
What about GameStop? To be frank, it’s an insignificant company that produces nothing of lasting value, has consistently earned a net loss over the last few years and has been a terrible investment until last week’s manipulation tactics which falsely drove the stock up. In my opinion, society does not need companies like GameStop to survive.
It is sad to see how users of the social media platform Reddit manipulated the price of GameStop to far exceed any underlying value of the company to try to hurt hedge funds. In the long run, this will not be significant to the overall markets because the pricing is not sustainable. My opinion? Some people may be going to jail for front-running this stock for their own personal gain at the expense of thousands of naïve and novice investors. This is not the first time this sort of thing has happened, and it will not be the last. Anyone remember Enron?
As always, the team at CIS is here to serve you. Feel free to comment via email reply or phone call to any of the staff.
Bob Barber – Senior Wealth Advisor and Owner
Want to hear more?
Bob’s latest podcast episode dives further into the issues above. Click below to listen!
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The views expressed represent the opinion of Christian Financial Advisors® (“CIS”). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While CIS believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the CIS’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not indicative of future results.
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By Bob Barber, CWS®
Counterproductive – something that has the opposite of the intended affect or that goes against what you are trying to achieve.
Polarization – division into two sharply contrasting groups or sets of opinions or beliefs at the same time.
Adding one and taking away one = nothing
Does being counterproductive, polarized, or going forward and backwards or right and left at the same time make sense? Of course it doesn’t. It’s expelling energy without a positive or negative affect. But, this very thing will happen in just a few months as millions of conservatives vote right while unknowingly investing left at the same time thereby polarizing or making their votes counterproductive.
Ask yourself, “Why do you vote?” Is it because of your beliefs? It is for me. I vote for candidates that hopefully align with my pro-family, pro-life, and pro-marriage values. I vote for candidates that believe in freedom and free enterprise, limited government and limited taxation and will abide by the United States Constitution.
A few weeks ago a headline appeared on the CNBC.com financial website about how the majority of employees that work at large tech firms, including the CEO’s and their leaders are for some reason financially supporting liberal candidates whose values align with socialism.
This is counterproductive when it’s free enterprise that allowed these companies to get to where they are today. Here is a link to the CNBC article if you would like to read it yourself:
https://ciswealth.link/CNBCTrump
In the next few months many of us will be voting for either conservative or liberal candidates that will take America down a path of freedom or socialism, free enterprise or more government control, less or more taxes.
Millions of conservatives will be voting one way while unknowingly supporting another way. How can this be? Conservatives unknowingly invest millions of dollars every day in major companies that support liberal candidates and agendas through their retirement plans, brokerage accounts, banks and financial advisors. For a conservative voter this IS totally counterproductive, polarizing and makes no sense at all.
Welcome to Values Based Investing where conservative voters can align how they invest with how they vote. Values based Investing is always looking to invest in companies that are making a positive impact in our society.
So how can your vote align with your investments? Values and Faith based Investing.
For over 25 years Christian Financial Advisors® has been committed to helping those who vote for pro life, pro family, candidates to invest the same way with these same values in their retirement and savings plans. There are more choices today than ever before as conservatives continue to find out they CAN ACTUALLY invest the same way they vote and believe. CIS continues to be committed solely to Valued Based Investing and as long as I’m the CEO you can rest assured it will stay this way because I hate being counterproductive.
Matthew 12:25 – Jesus knew their thoughts and said to them, “Every kingdom divided against itself will be ruined, and every city or household divided against itself will not stand.
Psalm 1:1 – Blessed is the one who does not walk in step with the wicked or stand in the way that sinners take or sit in the company of mockers.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]
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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”10812″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]Bear markets cause panic as the sell off period causes people to believe it’s different this time and the markets will never come back. So, those who panic sell to those who know it’s NOT different, and it will come back. After bear markets, the markets have always gone on to new highs. What makes this time any different?
Past Bear Markets & Chaotic Times Where Markets Rebounded
2008 – Subprime mortgage, housing bubble, Lehman Brothers Scandal
2000 – Dot.com bubble, Enron
1987 – Black Monday. Caused by programming and investor panic
1989 – Savings and Loan Bailout
1970 to 1974 – Vietnam, oil embargo, and quadrupling of oil prices by OPEC, Nixon impeachment, and high unemployment.
1958 – Major Recession
1929 – Stock market crash and the great depression following
1918 – Spanish Flu that took an estimated 20- 50 million lives
Every single time in history, the rebound has gone on to newer highs (But for disclosure purposes, I must say: Past performance is no indication of future results)
If You Can, Buy More While Markets Are On Sale
Share Price before decline $100 a share: $1,000 buys 10 shares
Share Price declines to $70 a share: $1000 buys 14.28 shares
Share Price bottoms at $50 a share: $1,000 buys 20 shares
Total Investment: $3,000 and 44.28 shares owned
If price goes back to where it was when things were normal within 2 years, 44.28 shares would be worth $4,428 which computes to a total return of approximately 47.6%, not including any dividends you may receive.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]
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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”10811″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]1. Account statement values reflect only current share values. If the share value is down, it does not mean your account has a realized loss. You still own the same amount of shares which will normally gain value again as the markets go back up. You only realize losses if you sell during a down period.
2. It is normal for account values to fluctuate dramatically from day to day and month to month, especially during a down market. Volatility is something you have to endure if you want to participate in significant gains.
3. Bull (up) markets and bear (down) markets are normal and are part of the investing process.
4. Today’s markets are moving up or down as much as 5-10% in just one day. Missing just 10-20 days when markets rebound can cut returns in half over the long run. The chart below illustrates this:
5. It’s human nature to only want to be in the markets when they are going up, and get out when they are declining, but timing the markets has never been proven to work in the long term. It’s time in the markets, not timing the markets that matters the most.
6. What happens over days, weeks, and even a few months should not interfere with a long term, well thought-out, sound investment strategy.
7. When stocks are on sale, it’s a good time to buy more of them, not sell them. For some reason, people love to buy everything on sale except stocks. They love to buy stocks when they are at all time highs which is just the opposite of what you should do.
8. Bear markets cause people to panic, believing it’s always different this time and that the markets will never come back. So, those who panic sell to those who know it’s NOT different this time, and the markets will come back someday. After bear markets, the markets have always historically gone on to new highs.
9. Control your Fight-or-Flight response when it comes to investing. In response to acute stress, the body’s sympathetic nervous system is activated due to the sudden release of hormones that tell us to get away from anything that might hurt us quickly. This is the exact opposite of what someone should do in a well thought out diversified investment strategy.
10. There will always be good and bad times. It’s a normal part of life’s process. Read Ecclesiastes 3:1-8 that we’ve included below.[/vc_column_text][vc_empty_space][vc_column_text css=”.vc_custom_1586880952486{padding-top: 15px !important;padding-right: 15px !important;padding-bottom: 15px !important;padding-left: 15px !important;background-color: #294566 !important;}”]ECCLESIASTES 3:1-8 (NIV)
There is a time for everything, and a season for every activity under the heavens: a time to be born and a time to die, a time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build, a time to weep and a time to laugh, a time to mourn and a time to dance, a time to scatter stones and a time to gather them, a time to embrace and a time to refrain from embracing, a time to search and a time to give up, a time to keep and a time to throw away, a time to tear and a time to mend, a time to be silent and a time to speak, a time to love and a time to hate, a time for war and a time for peace.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]
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[vc_row top=”20px” bottom=”20px”][vc_column][vc_single_image image=”10817″ img_size=”Full” alignment=”center”][vc_row_inner][vc_column_inner][vc_column_text]As both Wealth Advisors and Certified Kingdom Advisors®, our role is to help people integrate their faith with their finances. During this unprecedented health and financial crisis, there is no better time to rely on our faith, even when it may be tested beyond measure. We don’t know the future, but remain confident that the strategies we invest in, those that support Biblical values, will recover, but this will take time. In the past, time in the market, not timing the market, has always proven to be the answer in periods of volatility.
We take seriously your concerns and understand that your fears are real and your situation is truly unique. We walk this same path as you and are invested in the same investment strategies. We are approaching this time with a long term perspective, and we continue to follow sound investing principles. We hope we can be a valuable resource for you during these chaotic times. As always, feel free to call, text, or email us. We are here for you. You can also go to ciswealth.com/covid19 for more updates from Christian Financial Advisors® during this time.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row top=”20px” bottom=”20px”][vc_column][vc_column_text]
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As a member of the Baby Boomers, I can say we have failed in passing on several important life values to the next generation(s) – be content to live within your means, prepare for the future, and pass a blessing on to your offspring. Instead, we fostered the concept of instant gratification. It was not that long ago when a core financial value was “They make money the old fashioned way ….. They earn it,” as British-American actor, John Houseman so aptly mentioned in his commercial for brokerage firm Smith Barney depicted in the 80’s. This approach of financial responsibility and preparing for the future is now a lost art.
This past election year was full of talk of taxes and economic hard times. The phrase “the wealthy don’t pay their fair share in taxes” was mentioned so many times, I have lost count. I am a math geek, so naturally I decided to look into the IRS tax tables (Page 37, table 7) to see what every politician, newscaster, and talk show host were talking about when they said, “the wealthy don’t pay their fair share in taxes.”