Click below to listen to Episode 93 – Dealing with Investment Uncertainty

93 – Dealing with Investment Uncertainty

Bob addresses some of the most recent events that may affect the market.

Over the past few weeks, Christian Financial Advisors has received numerous phone calls, emails, and texts about many of the recent events. In this podcast, Bob addresses some of them including the coronavirus, the new administration and Biden’s numerous executive orders, the massive borrowing of money due to coronavirus unemployment, and last week’s manipulation of GameStop’s stock price.

This podcast encourages you to take a step back from all of the chatter of the news and social media platforms and replace it with prayer, scripture, and God’s outdoor creation. Listen to the 5 ways that Bob and the team at Christian Financial Advisors are combating these economic fears including incorporating biblical wisdom, diversification techniques, and setting emotions aside.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Bailey Theaker

Mentioned In This Episode

Christian Financial Advisors
[dt_soc_icons soc_icon_gap_between=”4px”][dt_single_soc_icon link=”url:https%3A%2F%2Fchristianfinancialadvisors.com|target:_blank” dt_soc_icon=”dt-icon-website” soc_icon_border_width=”0px” soc_icon_color=”#ffffff” soc_icon_border=”n” soc_icon_bg_color=”#7ac9ab” soc_icon_border_hover=”n” soc_icon_bg_color_hover=”#014a8f”][dt_single_soc_icon link=”url:https%3A%2F%2Fwww.facebook.com%2FHelloCFAdvisors|target:_blank” dt_soc_icon=”fab fa-facebook” soc_icon_border_width=”0px” soc_icon_color=”#ffffff” soc_icon_border=”n” soc_icon_bg_color=”#7ac9ab” soc_icon_border_hover=”n” soc_icon_bg_color_hover=”#014a8f”][dt_single_soc_icon link=”url:https%3A%2F%2Fwww.twitter.com%2FHelloCFAdvisors|target:_blank” dt_soc_icon=”Defaults-twitter” soc_icon_border_width=”0px” soc_icon_color=”#ffffff” soc_icon_border=”n” soc_icon_bg_color=”#7ac9ab” soc_icon_border_hover=”n” soc_icon_bg_color_hover=”#014a8f”][dt_single_soc_icon link=”url:https%3A%2F%2Fwww.linkedin.com%2Fcompany%2FHelloCFAdvisors|target:_blank” dt_soc_icon=”fab fa-linkedin” soc_icon_border_width=”0px” soc_icon_color=”#ffffff” soc_icon_border=”n” soc_icon_bg_color=”#7ac9ab” soc_icon_border_hover=”n” soc_icon_bg_color_hover=”#014a8f”][/dt_soc_icons]
Bob Barber, CWS®, CKA®
[dt_soc_icons soc_icon_gap_between=”4px”][dt_single_soc_icon link=”url:https%3A%2F%2Fchristianfinancialadvisors.com%2Fwho-we-are%2Fabout-us%2Fbob-barber%2F|target:_blank” dt_soc_icon=”icomoon-the7-font-the7-login-02″ soc_icon_border_width=”0px” soc_icon_color=”#ffffff” soc_icon_border=”n” soc_icon_bg_color=”#7ac9ab” soc_icon_border_hover=”n” soc_icon_bg_color_hover=”#014a8f”][/dt_soc_icons]
Bailey Theaker
[dt_soc_icons soc_icon_gap_between=”4px”][dt_single_soc_icon link=”url:https%3A%2F%2Fchristianfinancialadvisors.com%2Fwho-we-are%2Fabout-us%2Fbailey-theaker%2F|target:_blank” dt_soc_icon=”icomoon-the7-font-the7-login-02″ soc_icon_border_width=”0px” soc_icon_color=”#ffffff” soc_icon_border=”n” soc_icon_bg_color=”#7ac9ab” soc_icon_border_hover=”n” soc_icon_bg_color_hover=”#014a8f”][/dt_soc_icons]

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

Did you enjoy this episode? Sign up for email updates and never miss an episode.
  • This field is for validation purposes and should be left unchanged.

EPISODE TRANSCRIPT

[INTRODUCTION]

Welcome to “Christian Financial Perspectives”, where you’re invited to gain insight, wisdom and knowledge about how Christians integrate their faith, life and finances with a Biblical Worldview. Here’s your host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

Bob:
Philippians 4:11-13. “I’m not saying I need anything. I’ve learned to be happy with whatever I have. I know how to get along with little and how to live when I have much. I’ve learned the secret of being happy at all times. If I’m full of food and have all I need, I am happy. If I am hungry and need more, I am happy. I can do all things because Christ gives me the strength.” This is from Philippians 4:11-13 again. This is Paul speaking. I believe he was writing this when he was probably in a jail and he was being ridiculed for what he was doing and sharing the gospel of Christ. I love this scripture, because it reminds me that we should not base our feelings on external circumstances, but instead on that relationship with Christ, because there’s just so much happening today in our world.

Bailey:
Amen. Amen. Well, that’s what we’re talking about today. We live in a crazy time, don’t we? I mean, there’s a lot going on.

Bob:
We do. Yeah, it is. I think there’s just so much going on right now.

Bailey:
Yeah. Well, there’s a lot going on right now and it’s created a lot of fear and uncertainty in our clients and our investors. And what are some of the things that you’ve noticed that have contributed to that, Bob?

Bob:
Well, I think the first thing is this, everybody I think is just about fed up with the Coronavirus, and it continues to be a problem that continues to spread and thank goodness for the vaccines that are coming out. I know there’s a lot of conspiracy theories around this vaccine, but I know a lot of people already that have gotten the vaccine and they’ve had no side effects. And it’s funny, yesterday I was getting my haircut and she says, “At the age I’m at, if it helps me to live another 20 years, even if I grow a third arm, I’m going for it.” I said, okay. So I think the Coronavirus has really created a lot of strife and like we’re pinned up. You think about it. It’s like the walls coming in on you. You add on top of this the new administration that’s coming in right now and Biden and gosh, I mean the executive orders that he’s just done in the first couple of weeks is mind boggling. I heard it was over 40 of them. He was talking about unity before, but this doesn’t seem to push unity at all. There’s a lot of people that are very upset about that. Along with that, we continued to borrow massive amounts of money, and we’re printing it. That’s basically how you borrow it. It’s coming out of nowhere to overcome this impact that the coronavirus has had and the unemployment. I think that this could ultimately create high inflation and higher interest rates. And a lot of people were thinking, how are we going to pay this back? We gotta pay all this back. And with the stimulus package, they just keep coming out with more and more and more. And by the way, I always take those stimulus packages, and I divide it by the number of people that are actually unemployed it’s supposed to help. And when you look at the numbers, they should be giving $60,000 – $70,000 per person, and they’re giving them 1500 a month or a thousand a month for a few months. So it’s nothing like that. Where’s all this money going? And I think that has a lot of people concerned. And to add on top of all this uncertainty, like last week out of nowhere, we got this social media organization called Reddit. I’m not into social media. So I didn’t know about Reddit, but they created all this havoc with these hedge fund managers over a company named GameStop. And GameStop’s the biggest news going right now, over a company that’s never really made much money. And they even had negative returns the last few years as far as what they’re making. And it goes up 300% or 500% or 10,000%, just crazy stuff like that. And I think things like this are really pushing into all this uncertainty and this investment fear. And you just start adding all that together.

Bailey:
Yeah. And add into that that we really are on the information overload age, just constantly having information thrown at us. Most of it is just perpetuating fear. I mean, we have 24 hour news channels. We have social media at every turn. We have professionally paid doomsdayers that are making up all kinds of conspiracy theories just to scare people into buying high commission gold and silver. And you think, man, is this the end of the world. And with all of that noise just being thrown at us from every side, the team at CIS is getting tons of phone calls, tons of texts and emails and questions and concerns about what to do about all of this. And so, Bob, what is your advice?

Bob:
My advice, first of all, anytime that it starts getting crazy like this, my advice is first, you got to get on your knees. You gotta get into God’s word and seek God. What would God have you do, and turn off all this noise. Just turn it off. Get completely away from the social media part of it. Don’t look at your Facebook. Don’t look at Instagram and Twitter, all that, just turn that stuff off. The news is bombarding us. I have a relative. I’ll go to her house, and she keeps the news on all day long, and it’s just constantly feeding her spirit. Turn that stuff off, turn the internet off and TV. Turn it off for a few days or even, how about this, a few weeks and get out and take walks and go hiking or fishing. We’re surrounded by so many beautiful parks here in our whole country. Everywhere has some parks available to them within an hour’s drive, and get out of those parks and enjoy God’s creation and just get away from it. Because when you’re in the middle of it, you can’t see it. But when you get away from it and seeking God’s word will definitely get you away from that.

Bailey:
That’s so good. There’s a scripture that I hear you quote all the time. And so, I know it’s a scripture that you love to lean on, really always, but especially in chaotic times like we’re in, and that scripture is Matthew 6:25-34, right?

Bob:
Yes. I love Matthew 6:25-34. I’m a nature freak. I love nature. I love the mountains. I love to go down to Rockport and look out over the bay and watch all the pelicans. And in this time of year, there’s the whooping cranes and it’s just so beautiful. I always take this scripture to heart when I’m looking out onto nature and in those areas and it’s from Matthew 6:25-34. So I’m going to read it for us. “Therefore I tell you, do not worry about your life, what you will eat or drink or about your body or what you will wear. Is not life more than food and the body more than clothes?” This is it right here. “Look at the birds of the air. They do not sow or reap or store away in barns and yet your heavenly father feeds them. Are you not much more valuable than they? Can any of you by worrying add a single hour to your life?” Isn’t that great? I mean, you can’t. It’s not going to add a single hour to your life. Now we’re at the 28th verse. “And why do you worry about clothes? See how the flowers of the field grow. They do not labor or spin, yet I tell you that not even Solomon,” the wealthiest man that probably ever lived in the face of this earth, “in all his splendor was dressed like one of these. If that is not how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you, you of little faith? So do not worry what shall we eat? What shall we drink? Or what shall we wear? For the pagans run after all these things and your Heavenly Father knows that you need them.” And this is the key one, “but seek first his kingdom and his righteousness and all these things will be given to you as well. Therefore, do not worry about tomorrow for tomorrow will worry about itself. Each day has enough trouble of its own.”

Bailey:
Wow, wow. What a timely word. We’re not encouraging people to just bury their head in the sand and act like the world isn’t happening around them. We’re just saying turn your face toward God who sits on the throne.

Bob:
Absolutely. You’ve got that. Can you see when you’re reading that scripture if you’re out in nature and watching nature, you can just see how that applies.

Bailey:
I remember last week we had a couple of people calling in who were really concerned about the world. And you were sitting at home in your home office and talking to me on the phone, and you just said, I’m just looking at my property and the trees around me, and they look like they’re doing okay. If they’re doing okay, I think God cares about us too. So I know that at CIS, we use five principles during chaotic times. Bob, would you walk us through those five principles?

Bob:
Sure will, and these are five principles we use during the good times, too, but I think I need to re-emphasize that during these chaotic times, these principles. The first one is we always use proven, long-term, biblical principles and wisdom for managing the money that God has given us. And these principles, they work through good and bad times. Ecclesiastes 3:1-8 tells us, “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. Okay. So think about plants and everything. 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.” Does that sound like coronavirus right now? “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,” and last, “a time to love and a time to hate, a time for war and a time for peace.” This scriptural reference really lets us know that there’s always going to be chaotic times, but you notice it says there’s going to be good times, too. A time to mend, a time to build up. So when you’re in the midst of chaotic times, you’ve got to take your eyes and look forward, look up, versus looking down and realize this too shall pass. My grandma always said this. This too shall pass. She always said that during tough times and she was right and you are always going to have the good and the bad times.

Bailey:
That’s so encouraging. And yeah, just a reminder that God is sovereign over all of it. I’ve heard it said before that there’s never a time when the Trinity panics. There’s never a time when the Holy Spirit and the Father and Jesus get together and they’re like, “Oh no, what are we going to do? Like, they really messed it up this time.” And so they’re never in panic. And so Bob, what will be the second principle that we use during chaotic times?

Bob:
One of the things that we have to tell ourselves in this is, is that never allow or emotions or feelings or social media or those professional doomsdayers with all their conspiracy theories to dictate to us how we’re going to live our lives, or here at Christian Financial Advisors, how to manage our portfolios. We cannot manage portfolios based on emotions and feelings or what social media is saying. I know I’m saying the same thing again, but you just can’t base it on that. You have to base it on well thought out processes and wisdom.

Bailey:
This is so good to hear because I am on social media. I do watch the news and it feels like every day things get crazier or something new happens. And so, just to hear that steady “We’re going to keep doing what we’ve been doing. We’re going to keep looking at God.” That’s really comforting to hear. So what is the third principle?

Bob:
The third principle is we’re always going to invest in biblically responsible, values-based companies. And along with our partners, we have a very stringent set of rules that we go by in good and bad times and screening processes, and we’re going to follow it. We’re always going to follow those when considering adding any company to our portfolio. So, we’re not going out and putting GameStop in our portfolio. It doesn’t fit. And the way that we do this with biblically responsible investing is first we look at companies to avoid, and then we look at companies to buy. And in avoiding companies, we use the scriptural guideline of Ephesians 5:11. Maybe you’ve heard this one before. It’s kind of a well-known scripture that says, “Have nothing to do with the fruitless deeds of darkness, but rather expose them.” So this means when we look at companies to put in our portfolios, if the company gives money or supports liberal causes or that wants to take away our freedoms, we avoid that or companies that support destructive behaviors and lifestyles, we avoid that. Companies that make money on gambling, tobacco, alcohol, pornography, and abortion. We avoid them. Companies that give money and support organizations like Planned Parenthood or takes away human lives in their most vulnerable state. We avoid them, and companies that are pushing the LGBTQ agenda to our youth. We avoid them. Okay. All right. So people think, okay, what’s left. Believe it or not, there are still thousands left. We consider buying companies when they follow the scriptural guidelines found in Galatians 6:9, “Let us not become weary in doing good, for at the proper time, we will reap a harvest if we do not give up.” So the companies that we consider for our portfolios, when we avoid those, we consider ones that are supporting pro-life values, companies that want to make a world a better place and serve mankind with the things we all need like food, clothing, shelter, technology, healthcare, companies that treat their employees well with fair pay, good benefits, retirement plans, and time off for family. Companies that provide a safe working environment for their employees, companies with good employee training programs, companies that are compassionate toward their employees, and companies that care about the environment and God’s creation. So once all these companies make it through this lengthy filtering process that we go through, so you can see, we’re just not putting anybody in our portfolios. We then start looking at all their financials and their net income and their profit and their debt and their dividend yield and are they over or undervalued and the list goes on. So, we put them through quite a process.

Bailey:
Yeah. That is quite a lengthy process for considering what we’re going to invest in. I mean, you really put a lot of thought and care into managing people’s portfolios, huh?

Bob:
Yes, we do. We certainly do.

Bailey:
All right. And what is the fourth principle?

Bob:
The fourth principle we use is found in Ecclesiastes 11:2, and it says, “Invest in seven ventures. Yes, in eight, for you do not know what disaster may come upon the land.” So how do we take that scripture and apply it? We apply that by investing across many different sectors. So diversification in some sectors may do well in some years, and some sectors may do better in other years. We invest across many different sizes of companies from large to mid-size to small companies, from value-based to growth based to those in the middle. We also invest across many countries and we utilize a strategy that I’ve utilized for years here called our bucket strategy. And we’ve talked about that on some other programs. That strategy is where we set somebody up, as an example, all our retirees that are taking money out right now, we’ve put enough money over in a portfolio that is not driven heavily, if at all, by the markets. And we put aside four years of their retirement income. So we don’t have to worry about what’s happening in the next three to four years. That’s called our bucket strategy. Yet we still have some growth in there and we still have maybe some aggressive growth. So we build this bucket strategy across many different types of portfolios utilizing that scriptural principle.

Bailey:
Wow. Wow. I love that. That is so helpful. And so now we’ve kind of gone over the first four. We have one final principle in handling the chaotic world that we live in. What’s that fifth principle?

Bob:
It might be one of the most important ones. And we consistently monitor and actively manage all our portfolios using a forward looking approach. You can’t look in the rear view mirror. If you’re driving in your car and you’re trying to drive by looking in the rear view mirror, you’re going to crash. So, we always take a forward looking approach. And as a fiduciary based manager, I cannot allow myself to be ever out of touch with where the markets are and where they’re going. We’re constantly making that tweak. We’re tweaking and making those small necessary adjustments along the way. And our client’s assets here, they’ve got to be run like a well-oiled machine where I’m constantly making tweaks along the way to keep it at peak operating conditions. It’s like that old philosophy in baseball. Don’t ever take your eyes off the ball. I don’t know if that makes sense to you or not. I use sports analogy sometimes, cause I was so involved in sports when I was younger.

Bailey:
Yeah. And I’ve heard you say that you are actively managing portfolios and you’re doing it more than ever. I mean, every single day, you are fine tuning people’s portfolios. You spend a lot of time and energy on it. So before we end today’s podcast, at the beginning of the podcast, you had mentioned kind of four big things that are creating all this investment fear and uncertainty today. And so I would love to get your opinion on those four things. And the first thing you said was the Coronavirus and it continuing to be a problem. Could we discuss your opinion on that?

Bob:
My opinion is that we’re going to be over it in about 12 to 18 months. It may not be as soon as we want. I know everybody would love to be over this tomorrow, but we’re seeing the vaccines come out, and I kind of go back to that philosophy of my grandma and Ecclesiastes. And there’s a time to tear down and a time to mend. And I do believe we have a time to mend. I think we can see the light at the end of the tunnel, especially with how we’re learning to adjust to the Coronavirus. And going forward, we all may be a lot healthier because now we’re really in tune with germs and how we need to not be spitting on everybody when we talk now, not getting within a foot from our face. But I don’t think it’s going to continue to be a problem. I think coming out of it, there’s going to be a lot of pent up demand for travel and people are going to want to get out and the economy could be roaring once we get out of this thing.

Bailey:
Wow. Well, here’s hoping. The second thing that you mentioned was the new administration and Biden’s numerous executive orders that he’s put out. What’s your opinion on that?

Bob:
Well, it’s really interesting. My opinion on all these executive orders and this new administration is, and especially since the Democrats have complete control, have you ever heard of the frog in the pot strategy? Like if you put a frog in a pot and there’s and old saying, if you turn the heat up real, real slow, the frog won’t jump out of the pot. But if you turn the heat up real fast and make it so hot quickly, he sees what’s going on. He jumps out in the pot. I believe, actually, with what’s happening right now, they’re turning up the heat so quick and so fast that those of us that are concerned about this new administration, I think the frog is going to want to jump out of the pot quickly. And I think in two years, we’re going to be surprised at the elections in two years and a turnover of Congress.

Bailey:
Wow. Wow. That’s a great analogy. I love it. That’s a great analogy. The third thing you mentioned was the continued massive borrowing and printing of money to overcome the impact of COVID and unemployment in many sections of the country and how this could ultimately create high inflation and higher interest rates and things like that. What’s your opinion on that?

Bob:
My comment is always things do have to be paid back, and we could definitely be looking at higher inflation. So you need to structure your investments in your portfolio, the investments that will take advantage of that inflation, in goods and services that will actually raise their prices as that happens. So, I think it’s something that we all need to be aware of. It’s coming. We can not continue with these low, low interest rates on our fixed income side of the equation for our portfolios. We’re really being careful. We’re going very short term on all of our bond holdings. Because as things go up, if you have long-term holdings, it’s called bond duration. And as an example, if you have a 20 year bond and interest rates just went up by 1%, that bond could drop by 20%. So you want to have bonds that are six months to three years out max. That’s the analogy that we’re taking, but I think it’s eventually going to have to. We’re going to have to pay the Piper.

Bailey:
Sure, sure. And the last thing that you mentioned was the big Reddit crisis from last week, the social media platform that created such havoc with hedge fund managers and the media over GameStop. Can you comment on that a little bit?

Bob:
Sorry, GameStop. But I just think GameStop’s an insignificant company that produces nothing of lasting value. I looked it up we’ve never bought this stock, but I looked it all up, and they’ve had a net loss over the last few years in income, and it’s been a terrible investment until last week’s, what I call, manipulation tactics to falsely drive the stock up. I just don’t think society really needs companies like GameStop. So this whole story has been really blown out of proportion through the social media and in Reddit. That’s part of that, and they’ve manipulated this stock and the way did it is very sad in the long run. It’s probably going to be insignificant, but we may be talking about this thing later. And in my opinion, this is just my opinion, I think some people could be going to jail for front running this stock. Because there was a group of people that made a whole lot of money by pushing this out, and the stock was just not worth anything, but they pushed it to over three or $300-$400 a share, and they sold. Quite frankly, this is not the first time that this has happened. There’s a little company that was in Houston, Texas called Enron that some people may remember from way back. Another one called Lehman Brothers and this kind of thing’s happened before. It’s happened before, it’s happening now, and it’s going to happen again. So I just don’t let it bother me because I’m investing in a well-diversified, thought out portfolio that has processes and filters behind it. And we shared those earlier.

Bailey:
Well, thanks Bob, for such a timely podcast for today’s time in dealing with all of the fear and uncertainty that’s certainly available right now. I think you’ve helped a lot of people. I mean, you’ve helped me and I think that you’ve definitely helped our clients and listeners feel better and more confident that there is a way to find some solid ground amidst all of the shifting, changing things happening around us. And today’s podcast definitely falls in line with the name of our podcast, Christian Financial Perspectives.

Bob:
Thanks Bailey. Those are encouraging words. Sometimes, I don’t know if I’m deserving of that. God’s grace. It’s just God’s grace. I’m telling ya. I’m a sinner like all of us, and God has given me his grace. And based on that, I’d like to end with these four short scriptures for our listeners and they’re not long ones, but 2 Timothy 1:7, “For God has not given us a spirit of fear, but of power and love and of a sound mind.” Next, Psalms 24:1 that you hear me quote often, “The earth is the Lord’s and everything in it and the world who all live in it.” And then the last two, Proverbs 15:22 that, “Plans fail for lack of counsel, but with many advisors, they succeed.” And Ecclesiastes is 4:11-13. One of my favorites too, “If two lie down together, they’ll keep warm, but how can one keep warm alone? The one may be overpowered. Two can defend themselves. A cord of three strands is not quickly broken.” So with that last scripture, please know that I and the whole team are here for you, our listeners, and you never have to walk through your financial life alone because it is lonely out there by yourselves. And the three strands in this case, think of it this way, the CIS team walking with you is one strand, then you’re the other one, and the most important strand is God and his wisdom, found in his word, guiding and leading our decisions as we go through life.

[CONCLUSION]

That’s all for now.

We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.

[DISCLOSURES]

Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the host, Bob Barber. Bob does not provide tax advice and encourages you to seek guidance from a tax professional.