SHOULD THE CORONAVIRUS CHANGE YOUR INVESTMENT STRATEGY? — Faith and Finances Ministry
Author: Patrick Blair
For the first time in over a year, the stock market has taken a significant drop. This is big news because most people’s retirement accounts and other investable assets are in the stock market. But is it cause for worry, since the market has been steadily rising since 2009? Hasn’t every dip been a great buying opportunity? Isn’t this just a chance for dollar-cost averaging to work its magic?
Is This Time Different?
The financial news media would have you believe the drop was caused by the recent coronavirus (a.k.a. COVID-19) outbreak. Some commentators believe the market was already overvalued and primed for a drop (i.e. that the outbreak is simply a catalyst). Could this be the beginning of a 2008-style market collapse? Most investors won’t sell, because they are so conditioned by central bank money printing which has levitated markets.
I’m not going to opine on what I think will happen with the market. Frankly, I have no idea. You should be wary of anyone who tells you they are certain of what will happen, because no one can really know. Yes, that includes you too!
Invest in seven ventures, yes, in eight;
you do not know what disaster may come upon the land. –Ecclesiastes 11:2
The Bible doesn’t give us stock tips, but it does help us understand that nothing is certain. Can COVID-19 bring down the world economy? Maybe. Will the economy brush off COVID-19 as it did with SARS and H1N1? Maybe. When it comes to money and investments, the Bible tells us to be diversified.
What About My Investment Strategy?
Should the COVID-19 outbreak change your investment strategy? The answer depends. If you were broadly diversified in a way that anticipates sharp market downturns, then no. If you are a buy-and-hold investor with all your money in the stock market, then yes.
Because we can’t time markets or predict the future, we need to have a broadly diversified approach to investing. This advice isn’t just for high-net worth individuals, it’s for everyone. To learn more, read my book Faith and Finances, which explains the biblical investing mindset. Also, check out this promotional video for my new church course: Building Faith and Finances.
Let’s make sure we take time to pray for victims of COVID-19 and that God will limit its spread.
Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God. -Philippians 4:6
David said to Gad, “I am in deep distress. Let me fall into the hands of the Lord, for his mercy is very great; but do not let me fall into human hands.” -1 Chronicles 21:13
