Investment Conundrum?

If you were invested in the stock market during the past year, most likely you experienced a dramatic decline in your portfolio. Such performance causes a person to pause and reflect. Perhaps you wondered about investing in the stock market. You may even question whether or not you want to be an investor.

If you have assets, you are an investor—like it or not. If you are willing to face this reality and desire to invest wisely, then what assets are worthy of your investment capital?

The stock market provides opportunities to own equity interests in companies. It also provides opportunities to loan money to companies, municipalities, the federal government (i.e., the taxpayers of the US), and other entities. There are various other investment vehicles such as mutual funds, exchange-trade funds, commodities, preferred stock, options, futures, and so forth.

Insurance companies offer a variety of investment vehicles such as annuities. Other organizations offer life settlement contracts, which are tied to life insurance policies.

In addition, you can invest in privately held companies, real estate, precious metals, jewelry, and collectables (art, antiques, and rare collections). You can also invest in savings accounts and certificates of deposit offered by financial institutions.

Given this plethora of options, how should a person with a biblical worldview invest? What would be a biblical criterion for making investment decisions?

As with everything in life, investing is an act of faith. A common term used to characterize an investment, particularly in the public markets, is “security.” The term implies not only faith but also trust and stability. Of course there is nothing trustworthy and stable except that which is built on Christ (see Colossians 1:16–17).

In the investment world, a security is a vehicle of implicit trust. The investor entrusts his capital to another party believing that the capital will earn a profit. Since trust is so important in an investment decision, how do you discern whom to trust?

Until recently many investors trusted Bernard Madoff. Sadly, they discovered their trust was misplaced when Mr. Madoff disclosed that his investment company was engaged in a Ponzi scheme. Since he was widely respected and this deception had been going on for nearly thirty years, it impacted an enoromous number of people and organizations. By Madoff’s reckoning, the losses have been estimated at fifty billion dollars.

These are days of shaking and purging. What is not built on Christ—that is, biblical values and principles—will not stand. In Proverbs 11:5, Solomon said:

“The wicked are brought down by their own wickedness.” (NIV)

Bernard Madoff—a trusted financial professional—experienced the reality that his own wickedness brought him down.

If one of the most respected investment professionals proved to be untrustworthy, whom can you trust? May I suggest that the only people worthy of trust are true disciples of Jesus Christ—people who are being transformed into Christ’s image. True followers of Jesus Christ are the only people who are honest enough, humble enough, and truthful enough to be worthy of investment capital.

Since God is in control of His universe and is executing His will (see Isaiah 46:9–11), the only investments that will produce long term success are those aligned with His will. The best way to discern investments aligned with the will of God is to invest in disciples of Jesus who are seeking to fulfill their divinely ordained life purpose.

This means that investment decisions should be focused on people—not on ideas, products, or services. Wise investors should seek people who have accepted Christ and are committed to a life based on biblical values and principles, and who are committed to fulfilling the purpose of God in their lives. When a person finds their divinely ordained work, there is wisdom and divine favor to do that work. These are the people who will succeed and produce a profit with entrusted capital.

DEMDACO is a Kansas-based company with this type of investment philosophy(1). Known as an “angel investor,” the company looks hard to find the right people to invest in, trusting that God will bless people who align themselves with His purpose. There is no better place to invest than in those whom God will bless.

If you believe that the best way to invest is with disciples of Jesus Christ, then as an investor seeking to glorify God with your investments, you must engage in identifying and training disciples. Then you must be committed to helping these disciples fulfill their divinely ordained purpose in the workplace. As you do this you will invest time, talent, and treasure in people who will enjoy the favor of God in their work. Can there be any better investment?

Bernard Madoff was not a disciple of Jesus Christ. He concealed his sins and did not prosper. Note Solomon's words in Proverbs 28:13:

"He who conceals his sins does not prosper. . ." (NIV)

On the other hand, you will earn a return on your investment if you invest in disciples seeking to do God's will in the workplace.

In Proverbs 22:4, Solomon reminded us that financial blessings are rooted in biblical values:

“Humility and the fear of the Lord bring wealth and honor and life.” (NIV)

May the Lord give you wisdom and grace to be a good investor!

Happy New Year!

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(1) http://www.worldmag.com/printer.cfm?id=14692&CFID=9117989&CFTOKEN=56555988