Ask Chuck: Investment Advice During a Crisis

Dear Chuck,

I’m fatigued from all the “fake news,” flawed forecasts, imagined scenarios, and conspiracy theories that are circulating in the world today. How do I know what is true or false anymore! I am trying to decide what to do with my investments but feel paralyzed right now.

In a Holding Pattern

 

Dear In a Holding Pattern,

I too have struggled with the very same fatigue. It has caused me to question if we are experiencing a “great delusion” that God sends when the lie becomes the truth and the truth becomes a lie. (See: II Thessalonians 2:11)

Whatever God’s purpose is in this time, we must be vigilant to guard our minds from deception. Let’s talk about that, and then I will offer some investment advice. 

Avoiding Deception

Jeff Hancock, founding director of the Stanford Social Media Lab and a professor of communication in Stanford’s School of Humanities wrote an article that reveals the reasons why people are deceived in the uncertainty about the coronavirus and how to guard against it.

Hancock says social media is a platform that provides information quickly. Because we are naturally drawn to bad news, anxiety builds within us. We believe wrong or deceptive information to reduce uncertainty. Conspiracy theories, for example, allow us to place blame somewhere, making us feel better. 

The motivation for fake news, misinformation and disinformation:

  • To make money
  • Partisanship – blame political opponents
  • To disrupt and confuse

Some Tips for Sorting Fact from Fiction

Do your homework. Don’t believe it or share it until you verify it. Coronavirus news (or any topic for that matter) should be double-checked. Look for cues like unknown sources, unusual number of endorsements, and a focus on partisan topics. Do research to see if there is any contrarian opinion or thoughts about an issue or data or theory.  Often, I will search for information about the writer or author as well as the people in the story. After learning more, ask yourself, should I increase or decrease my confidence in the story based upon what I learned about the individual? 

Be Slow to Make Judgements, Decisions and Investment Changes

Imagine that you are hiking on an unfamiliar trail and suddenly realize that your map is not accurate. What it is showing you and reality do not match. Here is what would most likely happen next: You would stop hiking and slowly try to determine reality.  Pausing is okay. Pausing is normal. That does not mean you are fearful; it means you are taking the time to discern what to do. 

Next, you would resume your hike based upon the best information you have available to you: the knowledge of your circumstances and what you believe is best to get to your destination. No doubt, you would be praying for His guidance to get you safely out of the woods while you cautiously take the next steps.

Since we are in a time of unknowns, it can be helpful to watch the market to determine what others are sensing regarding reality. If nothing else, financial markets tell us when people are generally optimistic (markets are going up) or when people are generally pessimistic (markets are going down).  I have found this simple analysis to help me with investment decisions.

Some Current Investment Advice

If we compare the stock market to a roller coaster, we took a sharp dive then climbed quickly back up the next hill. I think we are in for another big drop through the summer. The economic damage is far-ranging, and political solutions look too slow and misguided. This will likely begin to reflect in the markets. Get good, professional advice before making a hasty decision. If you are squeamish, be sure your investments or retirement funds are in a defensive posture. If you are an aggressive investor, many more opportunities for buying low will likely happen in the near term. Diversification was Solomon’s advice and remains an important strategy. (Ecclesiastes 11:2 and 11:6)

Focus on Truth from God’s Word

I’m reminded of a man who questioned God and struggled with how to live during turbulent times. The man: Habakkuk. Impending judgement and questions run throughout this Old Testament book, but he ultimately rests in the Lord.

In the middle of the book we read “…the righteous shall live by his faith.” (Habakkuk 2:4 ESV)

This is a dependency on a sovereign God whose ways we cannot understand with our finite minds. 

Habakkuk demonstrates a trust that results in the reality that no matter what happens, we can rejoice in the Lord. Though we lose our jobs, though we lost money in the stock market, though our retirement fund fades away (etc.) God will be with us and He will enable us to carry on. 

Though the fig tree should not blossom, nor fruit be on the vines, the produce of the olive fail and the fields yield no food, the flock be cut off from the fold and there be no herd in the stalls, yet I will rejoice in the Lord; I will take joy in the God of my salvation.

God, the Lord, is my strength; he makes my feet like the deer’s; he makes me tread on my high places. (Habakkuk 3:17-19)

God Provides is a Crown video teaching series of six short films, each portraying a biblical account of God proving Himself to be a faithful Provider. The series has reached millions of lives around the globe and is now available for free on Crown.org. I hope it will be an encouragement to you in times of uncertainty. God is our ultimate strength, joy, and help. May He also be our source for wisdom as we navigate the information that comes our way. 

 

 

This article was originally published by the Christian Post, May 15, 2020.

Click here for free resources to navigate the financial affects of COVID-19