While this may sound somewhat sacrilegious, I think the stock market is a pretty good analogy for one's walk with God. Let us take the Sraits Times Index (STI) as our case in point and assume that how well our life is going is equivalent to the closing price of the STI each day.
For anyone just starting out at trading equities, or the more risky warrants, you know that emotions play a big part in determining where prices will be each day. Stock market guidebooks and gurus often talk about the 2 biggest hurdles that every investor needs to keep in check, namely fear and greed. But often times one cannot help but feel the pinch when a one-day correction wipes out over 5% of your investment (as on 28 Feb 2007).
In the same way, we occasionally face obstacles in life that appear so big that we just feel like throwing in the towel. Whether it's our relationships, or our work, or our spiritual walk, we get coaxed into thinking that all is lost. So we give up, cut our losses and swear never to use our hard-earned money to buy the STI ETF ever again.
However, had we taken a longer term view of the STI over the past 5 years, we see that the upward trend is undeniable, and Feb 07 was just a drop in the ocean. That's comforting for long-term investors, though not very useful info for the short-term punters. But our relationship with God is not meant to be a hit and run. When we said the Sinner's Prayer, we were signing up for the long-term.
The problem is that we don't have the benefit of nice on-line charts to remind us of God's plan for our lives. And that's where journalling comes in. I will be the first to admit that it requires quite a bit of discipline to do, but the benefits are well worth it. As you recall the times when you thought all was lost, we see the hand of God reaching down and plucking you out from the depths of despair.
So we derive our confidence in God from past experience (historical trends) as well as good fundamental knowledge. Looking at the chart below, the STI looks a lot less friendly if we take a super long-term view. So it's ok to sell, but we need to do so for the right reasons.
How do we get insight into the fundamentals? With shares, we look at all the wonderful ratios out there, like P/E, ROE, ROA, P/B, etc. With our spiritual lives, it's all about prayer and reading the Bible, i.e. getting in touch with the most important insider of them all.
Claiming to be a Christian and not praying regularly is kind've like buying a stock and not reading the company's annual report -- you don't really know what's going on and are just hoping for the best. It's no wonder that when 28 Feb 07 hits, you panic and liquidate your holdings, only to regret just 2 months later.
For anyone just starting out at trading equities, or the more risky warrants, you know that emotions play a big part in determining where prices will be each day. Stock market guidebooks and gurus often talk about the 2 biggest hurdles that every investor needs to keep in check, namely fear and greed. But often times one cannot help but feel the pinch when a one-day correction wipes out over 5% of your investment (as on 28 Feb 2007).
In the same way, we occasionally face obstacles in life that appear so big that we just feel like throwing in the towel. Whether it's our relationships, or our work, or our spiritual walk, we get coaxed into thinking that all is lost. So we give up, cut our losses and swear never to use our hard-earned money to buy the STI ETF ever again.
However, had we taken a longer term view of the STI over the past 5 years, we see that the upward trend is undeniable, and Feb 07 was just a drop in the ocean. That's comforting for long-term investors, though not very useful info for the short-term punters. But our relationship with God is not meant to be a hit and run. When we said the Sinner's Prayer, we were signing up for the long-term.
The problem is that we don't have the benefit of nice on-line charts to remind us of God's plan for our lives. And that's where journalling comes in. I will be the first to admit that it requires quite a bit of discipline to do, but the benefits are well worth it. As you recall the times when you thought all was lost, we see the hand of God reaching down and plucking you out from the depths of despair.So we derive our confidence in God from past experience (historical trends) as well as good fundamental knowledge. Looking at the chart below, the STI looks a lot less friendly if we take a super long-term view. So it's ok to sell, but we need to do so for the right reasons.
How do we get insight into the fundamentals? With shares, we look at all the wonderful ratios out there, like P/E, ROE, ROA, P/B, etc. With our spiritual lives, it's all about prayer and reading the Bible, i.e. getting in touch with the most important insider of them all.
Claiming to be a Christian and not praying regularly is kind've like buying a stock and not reading the company's annual report -- you don't really know what's going on and are just hoping for the best. It's no wonder that when 28 Feb 07 hits, you panic and liquidate your holdings, only to regret just 2 months later.
I think some of the ideas may not map very well to the STI analogy, but I hope you get the point :) For avoidance of doubt, this is not an inducement to buy the STI :P
5 comments:
you might be just about the biggest econ nerd i have yet to encounter, but it's kinda endearing.
i think it is analogous in some ways:
1. as a retail investor you are never allowed to short the market. As a believer you are never allowed to walk the other way, away from God, or else there'll be a penalty.
2. Praying regularly is indeed like reading the annual report. It does not necessarily help if (1) you do not have enough faith or guts to ride out the trial, or (2) you're surrounded and are influenced by ppl who don't think likewise. You can read the annual report religiously but still lose faith when the correction comes, same thing goes for prayer.
3. Investing in stocks is like believing in God. It takes a leap of faith and sacrifice and risking our worldly life for spiritual gain. In life, we have to take risks, and understand that with each risk we take there has to be a potential for loss. If one's not prepared to forego other things, should one then invest his time and money in the religion? Likewise, if one's not prepared to bear some losses and take some risks, should one invest in stocks? I think if he's unable to, then maybe he shouldn't.
4. Lastly, every correction and loss made is a valuable lesson learned. Similar to how your walk in faith is, sometimes every chastising and every trial is a lesson that is meant to be.
The main gist is, if u can't take the loss or bear the risks, then dun play the game. There is a risk to be borne in everything one does, even in religion. There is no 100% sure way to riches and glory, or eternal life. The upward trend is also not undeniable - the danger lies in believing that it is.
But as it is in religion and investments, some are more risk-loving, some more risk-averse.
Invest according to your risk profile and appetite - in an instrument that will not rock your faith in times of trial. U can't beat the market just by thinking u've read all the annual reports and guidebooks n the price multiples. And one should never think that one can go to heaven just by praying or believing. Rather, it is by God's grace that determines whether that investment ends up in heaven or hell, and in happiness or regret.
Some pretty insightful extensions... Nonetheless I would have to disagree with you on one important point -- there is a 100% sure way to eternal life and that is through acknowledging Christ as Lord of your life. While you rightly point out that it is ultimately by God's grace that we are saved, salvation is offered as a promise to those who earnestly repent of their sin and seek to live their lives a God directs.
Perhaps the crux of the matter is what we define as "believe". James pointed out that faith without works is dead, meaning that it is through our daily actions and choices that we reveal what our true beliefs are. Like you said, discipleship comes with a cost. Certainly if we claim to be Christian, yet sin without giving a second thought, we need to seriously ask whether we really believe that Christ is who He says He is.
So to sum up, there is a critical difference between the stock market and God. While the stock market is subject to the collective whims of investors, as well as the unpredictable environment, God is ever-constant and never changing. The final annual report has already been issued, and now it's up to us to act on that information.
hmmm... I think I can see some similarities between the day to day walk and the stock market up-down price movement... all life, whether it's a walk with or without Christ, has ups and downs.
The one major difference I see (aside from the one Marcus just pointed out, which is actually related) is that the alternative to not investing in the STI is simply a loss taken on possible earnings/profits, while the alternative to life with Christ is not a simple "lack" of benefits from being a Christian, it has much longer-lasting implications.
Those who, fearful of risking their money in investments, continue putting their savings into the good 'ole safe bank savings account, only miss out on the extra earnings they would have gotten had they been vested. In most cases, they are able to continue to get by, albeit a little less comfortably than they otherwise might have.
However, the alternative to a life with Christ is much more than just a loss taken on possible benefits of knowing Him. It's a decision that has implications on this life, and also on the next, i.e., our life in eternity. Simply put, if life with Christ is the 100% sure way, and the only way, to eternal life, then there only leaves one conclusion for the alternative life. The analogy can't quite capture the "eternity" in the equation of our lives here on earth, which is only but a small blip in the length of the time that we will actually live... If there were a graph for that part of the equation, then it would go off the scale altogether AND not have any ups or downs at all, for eternity.
And I think that part of it should balance out any risks taken in this life! :)
looks like Hui is quickly becoming a risk-taker! i think she's gonna be much better at this than us! we're counting on you, Libbie!
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