What I wish I could share with people during bear markets… 

What I wish I could share with people during bear markets…

If you think your life is about your money, you’re in for a rough time. You’ll be too attached to your money and will rely on it for too much of your self. It’s a practical necessity, I get that. But it’s too narrow of a lens.

Suppose you rely on your money for your sense of security. If you have a market decline of 50%, does that mean you are half as secure as you were before? Maybe. It certainly seems that way if you have made money your primary pursuit and used money as the primary source of your security. But is it the ultimate source? Should it be? Can money ever provide total security?

No.

For starters, your wealth is only as good as your society’s commitment to honoring and protecting your assets. If we were to devolve into anarchy, your “property” shrinks down to whatever you can defend with force. Conversely, with a tyrannical government, your ownership is only good up to the point where the government decides it needs your wealth more than you do. Your wealth can easily be seized, commandeered, or frozen.

Try though you might, such massive societal shifts are probably beyond your ability to prevent, though you certainly have a responsibility not to make them worse than they have to be.

But let’s set aside the big picture for a moment. What about a more mundane but far more common scenario, like a life-threatening illness. There are several forms of cancer that no amount of money can cure. What good does your money do you then? Again, money proves insufficient for helping you cope with life. And even if you aren’t afflicted with a disease, you will still die anyway. Money does not solve this problem, nor does it provide a clear answer to the question of what to do with your finite existence.

So whether the market is up 50% or down 50%, your fundamental relationship to the universe remains essentially the same. You are very small and relatively powerless, and the universe is very, very, vast. You inhabit a reality that is beyond your comprehension. But despite those conditions of extreme uncertainty and unknowability, you must still live, exist, and take action. Money does not provide an ultimate answer to those questions (even if money does take the edge off. Like Dolly Parton said, “I’ve been rich, I’ve been poor. And all else being equal, I’d rather be rich.”)

I think if you’re looking for a deeper source of security, it will have more to do with your fundamental stance towards the universe than with the amount of power you can exercise within it. “The Lord giveth and the Lord taketh away…” Indeed, you can try to fight or outwit God (or the universe, or whatever you call the vastness beyond human comprehension), but good luck with that. I think a sane attitude to take is one of cooperation and connection with that infinitude. “Yes God, the market is down 50%. I trust you. I trust that I will be ok. I surrender my will to yours and will look for the opportunities you are giving me to grow in my faith and connection.” Even if your external life really becomes more and more chaotic and unmanageable, you can still grow your internal sense of peace and well-being. How odd! How counterintuitive! You can learn to find joy in the mundane moments of daily life, learn to laugh more, learn to be a better friend, learn to treat others with kindness and patience instead of righteous anger. You will continue growing even as the world crumbles all around you.

This is a tough pill to swallow for some people. Sometimes people come to me and want to know that everything will absolutely be ok no matter what. That’s not a promise I can make them. I can illustrate that, under normal conditions, they will most likely be fine. But life isn’t normal. Life is weird, unpredictable, and mysterious.

This whole investing thing is a dance with uncertainty. It has less to do with “historic averages,” “valuation ratios,” and “economic indicators” than it does with faith. But not faith in the US economy, the dollar, government, or corporations. Those aren’t things that deserve your ultimate faith. After all, every great economy fails at some point. As does every great government, every great corporation. And every great currency too.

People understand this, actually. They appreciate the fact that economies can collapse, that stock markets can go to zero. Hence, when there arises a crisis of existential proportions (like the 2008/2009 financial crisis, COVID, or even 9/11), they consider the worst case scenario and try to salvage what they can. And despite being the ones selling at the exact bottom of the market crash, they aren’t totally irrational. France has gone through something 5 different governments over the time the US has existed. Germany’s stock market has gone to zero twice since 1900, as has Russia’s. Their paranoia isn’t totally unfounded. But the solution they turn to is wholly misguided. They are trusting to cash, or gold, or guns & canned food rather than to something higher. They are relying on self-will, rather than trusting in God. If they really had faith in a Higher Power, they would understand that their God will even guide them through a civilizational collapse. Even in the worst-case scenario, you can rely on God. What you’re left with in that moment, when everything else has been stripped away, is your connection with God. Thus, in a well-ordered life, your faith, not your money, should be the bedrock foundation upon which your rest everything else.

Outside those scenarios, things usually tend to work out pretty well. That’s why investing is for people who are optimistic in the human endeavor. But again, there isn’t any real certainty offered there. Do you get that? Mankind is fallible. Our best thinking doesn’t always lead to triumph. Sometimes it leads to outright disaster. But still, when things don’t go horribly wrong, stocks usually go up phenomenally over time.

So my big takeaway is this. It still makes sense to invest, to make smart choices with your money, prepare for emergencies, grow your income, and provide some cushion against life’s slings and arrows. However, do so only with the understanding that there is no ultimate form of safety that can be obtained. Do not make money your god. Nor should you expect that faith will prevent bad things from happening to you. Bad things still happen to people of great faith.

The point of faith is simply that you can handle it better when bad things do happen. You can know that you will still be fundamentally OK no matter what the outcome. Even unto death.

With investing, I just have to pray something like this, “God, I am trusting this to you. Though I believe I have done my homework, I know there are always some important things I won’t know in advance. Whether for my personal good, or financial good, I trust that you will use this for my long term good. Let me seek those lessons, and that connection to you, not just riches. I surrender control of the ultimate outcome, and trust in you to guide me along the way. Amen.”

Or more simply, “God, handle this for me. Amen.”

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