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Biblical Perspective on Stock Market Volatility

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
April 14, 2021 8:03 am

Biblical Perspective on Stock Market Volatility

MoneyWise / Rob West and Steve Moore

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April 14, 2021 8:03 am

Weathering the market’s ups and downs at times can seem like a roller coaster ride. Volatility is nothing unusual, but how can we endure those downward turns without panicking? On the next MoneyWise Live, host Rob West talks with Robert Netzly of Inspire Investing to get a biblical perspective on market volatility. Then Rob will answer your calls and financial questions. That's MoneyWise Live at 4pm Eastern/3pm Central on Moody Radio.

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This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage. My best friend is blessed with three kids and a big house. All the kids have their own rooms, but recently life in that big old house has been different. In an effort to solve kid boredom, my friend bought one of those massive blue tarps and created a full room tent in the spare bedroom.

They put each of the kids' mattresses under the tent in the shape of a T. And every night, for now five weeks, the kids have slept with their heads feet apart instead of rooms apart. It's Ryan from United Faith Mortgage, and when I see a home, I can't help but see interest rates, escrows, and trying to help listeners pay the least amount possible. But for me, that story was a needed reminder that it doesn't matter whether our homes are big or small.

It only matters whether we're willing to enjoy the little things that God gave us today, like a tarp tent. If you happen to be looking for a new place to put up a tarp of your own, we are United Faith Mortgage. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. Licensed mortgage banker. For all licensing information, go to Corporate NMLS number 1330. Equal housing lender.

Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Wall Street legend Peter Lynch once said, you get recessions, you have stock market declines. If you don't understand that's going to happen, you don't do well in the markets.

Lynch once managed the most successful mutual fund in history, weathering the markets ups and downs. Hi, I'm Rob West. Today I talk with Robert Netzle of Inspire Investing to get a biblical perspective on market volatility. Then it's onto your calls at 800-525-7000.

800-525-7000. This is Money Wise Live at the intersection of faith and finance. Well, Robert Netzle is CEO of Inspire Investing, an underwriter of Money Wise, where they're playing a critical role in the fast growing faith-based investing movement. Robert, a real privilege to have you back on the program. It's my pleasure.

Thanks for having me, Rob. Absolutely. I know you have some fascinating stories to share about certain companies, both good and bad from the faith perspective.

We'll get into that in just a moment. I want to first talk about applying biblical principles to investing when things are less than steady, you might say, on Wall Street. How should a Christian investor react during turbulent times in the stock market? There's basic mantras that every investor should follow. You have a long-term plan. You stick to it. You avoid making short-term emotional decisions.

You get good advice. You invest in a diversified portfolio. There's these principles that every investor should follow. I think really the interesting question is, is there anything different about the way a Christian investor should react during market turbulence compared to a non-Christian investor?

I think the answer is yes. The reason is because our hope is in our Lord. We put our trust in God.

We have these promises from God. I've seen the reaction of investors across the spectrum working in a secular bank like Wells Fargo previously and now working with primarily Christian investors. I got to tell you, back in 2008 when I was at Wells Fargo, the reactions of some of these clients we had, their life was coming to an end. They were panicked. Terror was not too strong a word for what some of these people were feeling.

I can't blame them because really their hope was in their wealth and they saw it evaporating before their eyes. In the Bible, 1 Timothy tells us not to set our hopes on the uncertainty of riches but on God who richly provides us with everything to enjoy. Really the number one response of a Christian should be to trust God in the ups and downs. When you put your trust in God, really we have a peace that passes all understanding.

That's such a good word. We have an abundance before the first dollar. We entrusted our Lord sending His Son to pay the penalty for our sins so we could be reconciled to the Father. You start there and you have an abundance more than you could ever imagine.

Then you go to God's promises, I will never leave you or forsake you. Again, before you get to your financial provision, we have so much. Obviously, as you said so well, Robert, that's where our hope should be. It's often said that fear and greed are the two most dangerous emotions for investors. Why do you think that's the case?

Talk to us about a biblical perspective of those. Well, I mean, just ask yourself, do you intend to make better decisions or worse decisions when you're stressed out, fearful, anxious? I know I don't make good decisions in those situations. We've all been driving on the highway and you look in your rear-view mirror and you see the highway patrol. Their lights aren't on. I mean, they're not following you. They're just driving behind you, but your heart rate goes up. You kind of get jittery. That's when I get the ticket.

I'm not doing anything wrong. I get fearful, anxious. The same thing is with investing. When we have emotions gripping our heart, that is not a time to make decisions, important decisions. I think we've all been there where we've made some sort of decision when we were caught up in maybe it's anxiety or depression or fear or anger or whatever that emotion may be that later we regret and we look back and think, what was I thinking? Ironically, when we make those fear-based decisions, we're trying to take matters into our own hands and avoid pain or loss. But it's sort of this self-fulfilling prophecy oftentimes where the very actions we take in those times are the very things that ended up hurting us in the long run. Well, that's a great counsel and words that we should really heed when it comes to our investing.

One of the other things that can really help is having a financial advisor, somebody who can keep you grounded and make those decisions for you so they're not emotional. We'll talk about that and much more just around the corner. We're joined today by Robert Netsley, CEO of Inspire Investing.

We're going to have time for your questions a bit later in the program as well, 800-525-7000. This is MoneyWise Live. We'll be right back. Welcome back to MoneyWise Live.

I'm Rob West. Today, our guest, Robert Netsley, CEO of Inspire Investing. We're talking about how we approach turbulent markets as believers.

What can we draw from scripture that informs how we should approach handling God's money when it comes to seeking a return? A little later in the broadcast, we'll be taking your questions. Robert, just before the break, you were talking about fear and greed, which can grip us as it relates to turbulent markets. It can lead us to making decisions emotionally, which is never a good thing. We find ourselves at an interesting point right now. We're 12 years plus into a raging bull market.

Yes, we've had some blips along the way, including last year through the pandemic, although that was pretty short-lived. Perhaps some are experiencing greed right now. We've seen that play out recently in the markets with some high-flying tech stocks and some shorts on some other companies. But we could have a fear situation here before too long. I think folks are quick to point out the mounting debt we're taking on in this nation, the fact that, cyclically speaking, we should be rolling over into some sort of a recession before too long, even though it may not be anytime soon.

Which do you think is more prevalent right now? I think there's an aspect of really our personalities. Some people are prone towards fear all the time. Some people are more prone towards greed, more risk-takers. But I think in general, as you mentioned, we've seen stocks come so far off the bottoms in 2008, such a long time ago, and yet this market just continues to go higher. And I think you mentioned recent examples like GameStop and the Robinhood saga that is ongoing, and Bitcoin, and so many other examples of exuberance in the marketplace, where I think the real danger is people have gotten complacent. And they tend to get greedy in those times, where maybe they have made some kind of risky bets in their investment account, if you want to call it that. And they've turned out well.

They made money. And so what do you do? You make another one, a little bigger this time, and you think, well, I'm really doing a great job. I'm a smart guy.

I'm a smart gal. And you keep doing that. And it kind of lures you into this false sense of security that either one, you're just an infallible investor, or two, it always goes up all the time. But the reality is the market is just going up. Everything's going up. And eventually they're going to go down. And you don't want to get caught in a situation where you've taken on excessive risk because you're chasing this market higher. And when that turns around very quickly, you find out, as Warren Buffett says, when the tide goes out, you find out who's been skinny dipping. And you don't want to be in that kind of caught off guard situation.

Yes, that's for sure. Let's talk about using an advisor. Why do you think, Robert, it's especially valuable to work with a Christian financial advisor, we'll say someone with the certified kingdom advisor designation, when the stock market is turbulent in particular?

Yeah, working with a kingdom advisor, somebody who's skilled in providing biblically wise financial advice is, I think, paramount. Because when we manage our own money, when we're listening to our own thoughts only, we just get in tunnel vision. We don't know what we don't know. We can't see what we can't see.

And it's true in all areas of our life, whether it's relationships or whatever it is. And I had a doctor come into our office, I think it was 2013, 2014, very smart man, very high income. And he wanted to become a client. He saw that we were a Christian financial firm and was seeking some biblical advice.

And as he told me his story, it was just jaw-dropping. In 2008, he had been managing his own money. In 2008, he saw his account value drop in half and completely panicked and sold out and went to cash, as many people did at that time.

The world was in a very precarious situation and he made this decision. And then the market, of course, rallied back, started a very sharp rebound. But he was still scared to get back in because he was convinced that the moment he got back into the market, the market was going to fall out from under him again and so on and so forth. So here we were several years later, he was still in cash. And so if he had just left his account alone and done nothing with it, he would have had about twice as much money as he started with in the beginning of 2008. But because of that fear-based decision, he had no counsel to help kind of talk him off the ledge and give him some wise advice.

He had half as much as what he started with. And in his case, that was a difference of millions a difference of millions of dollars. And so it took some real humble soul searching on his behalf to come in and seek that wise counsel, but it was a wise decision. And I think that example always sticks with me as really the reason why we need biblically wise counselors, particularly in our financial life.

Very well said. You know, Robert, we want to guard against fear and greed. We want some accountability and some professional counsel, biblical counsel, when it comes to our investing. We also want to think about our convictions and how we want our faith to be reflected in our investments.

And I know that's what you're all about at Inspire. And you have tons of stories about companies that you're investing in, that our listeners can invest in, that really align with their values and priorities as Christians. Would you give us an example perhaps of a company doing some really good things right now?

Robert Leonard Sure. Well, I love talking about the J.M. Smucker company, right? With a name like Smuckers, it has to be good.

So it's a personal connection with this company. My grandfather, my dad's side was a VP with them and worked his whole career at Smuckers. He grew up on a farm in Ohio and worked his way through college, started as a lab chemist, kind of bottom of the run with Smuckers and worked his way up. And there's this story that he used to tell. One day, Paul Smucker called him into his office one Friday afternoon and said, you know, this point in time, he was just a kind of a low level, again, kind of lab chemist. He said, Vern, we're fixing to set up our first shop west of the Mississippi out in California. And we think you're the man for the job. And he said, well, you know, why?

I'm not even in management. He said, well, we see you as somebody who has the same values that we can trust to take that out in California and keep those really family friendly, Midwestern faith based values alive in this new facility. And he said, no pressure, but we want an answer by Monday. And so he went home and my grandma and he prayed about it and made the move out to California so many years ago. But all through his career there and through our experience with that, that company, we see integrity, we see caring for their workers. My grandfather opened that plant in Salinas, California, employing hundreds of people, ran it for 40 years, retired. And then the Smuckers closed the plant. But before they closed the plant, they found a job for every single person who was working in that plant before they closed it, helped them find a job elsewhere or with the company. They really care about people.

They really do. And the founders and the owners, the Smucker family is a faith based family. And, you know, that kind of integrity that permeates an organization that we think not just isn't just a warm and fuzzy story, but actually has results in the bottom line, right? This is a company that is doing things right. They're not violating human rights and their supply chains that go all over the world.

They're not cooking the books. It's a great story. I love it. And it's just an example of the kind of investments that are out there that can align with your values. There's also some companies to avoid as well.

You can do all of that screening at, or you can learn more about Inspire Investing at Robert, thanks for being with us today. My pleasure.

Thanks, Rob. That was Robert Netzle, CEO of Inspire Investing. This is MoneyWise Live. We'll be right back with your calls.

800-525-7000. Welcome back to MoneyWise Live. Great to have Robert Netzle along today. Appreciate his comments as we think biblically about managing our money. And yes, that includes the stock market and our investments in good times and in difficult ones, always placing our trust and our hope in Jesus, not our stock portfolios. It's time to turn our attention to your calls today. We'd love to hear from you on any financial topic, whatever's on your mind and your heart today, whether it's giving, debt, perhaps it's your saving for the future, or just wondering how to handle your kids in terms of passing on these biblical financial principles to the next generation. Whatever you have for us today, we'd love to hear from you. We have just a few lines open. Here's the number 800-525-7000.

That's 800-525-7000. Before I go to the phones, this is a great time to remind you as we here are at mid-month that MoneyWise is listener supported. We can't do what we do without your financial partnership and support. And we're certainly grateful that you allow us through your support to share God's financial wisdom every day through our MoneyWise coaches answering thousands of questions each year, through our certified kingdom advisors and our, of course, radio listeners, you out there listening each day, the ability to bring you to the website, aggregating all the content that we do, and just being able to serve you in so many ways through our online communities and, of course, the MoneyWise app. We do all of that only because of your support, and if you would prayerfully consider investing in this ministry, we'd certainly be grateful.

It's a tax-deductible gift, and you can give safely and securely at Just click the donate button. We would certainly be grateful. Let's head to our phones. Joanne, you're first up today on MoneyWise Live. Go ahead.

Yes, I have $30,000 in a CD that just matured, and I don't know exactly what to do with it. Okay, let me ask you a couple of questions, Joanne. I didn't mean to interrupt, though. Go ahead.

No, and I have an investment advisor who has my money in annuity, and I'm curious about whether it's time to just get out of the annuity and get into the regular stock market. And he's in Colorado, and I'm in Washington. Okay, very good. So does that make a difference in who you would choose? Not necessarily. I think the key is that you find someone that you feel really comfortable with, where you have open communication that meets your expectations. I think it's important that this individual is understanding what your goals and objectives are to help you meet those who understand a biblical perspective of money and really understands the counsel of Scripture. But certainly that person does not need to be right there in your city, unless that's important to you, to be able to sit down face to face.

But in this environment, we're finding more than ever that people are more and more comfortable using technology to have meetings and connect with one another, and so I think the physical location of your advisor is less and less important all the time. Let me ask you a couple of questions, Joanne, just about your situation. Are you retired? Yes. Okay, and are you living off of the income from this annuity? Part of it, yes. I have my social security, and then I still have to draw from it. Okay, so has this annuity been what's called annuitized in the sense that you're receiving a monthly check every month?

No. Okay, so it's still accumulating, it's in the accumulation phase, and is it a fixed annuity giving you a guaranteed return every year, or is it variable, meaning it has investments inside it? It has investments inside. Okay, and how has it been doing? Have you been happy with the results?

I have been, except I've been told that it's a little bit more aggressive than someone my age and need should have. Okay, very good. Well, I think the key for you is to have a real good sense of, first of all, what are your needs? So you mentioned that you have social security, but that doesn't quite cover your living expenses, and so you have a need to supplement that. You've been handling that by pulling out some of the cash value out of this policy, some of the accumulation that you've been withdrawing periodically.

This account is still continuing to grow. Annuities can be somewhat complicated, so I think perhaps it's time for you to either go back to this advisor and have this individual explain to you exactly what you're invested in, and as it relates to the variable portion, I assume you're getting a portion of the upside, the returns on the investments inside the annuity, but there's probably some sort of floor in there that doesn't allow it to go down beyond a certain point in the event that we were in a down market. You need to understand that, just so you know what your risk is, and then determine whether this is the very best place for you to be so that you can have this money growing for you in a way that's conservative or reflects where you're at in your age and stage of life, your income needs now and in the future, and the ability for this money to last throughout the rest of your life or until the Lord returns. And I think getting not only your current advisor to weigh in on that and perhaps provide some explanation as to why this investment was recommended is important, and then if you wanted to seek out a second or third opinion from somebody who might offer an objective scenario that's different, that's perhaps outside of an insurance product, I think that would be a good idea as well, because it sounds like you at least have some uneasiness with what you're currently in. As to whether it makes sense for you to stay right where you are or pull your money out and do something else, that would be a little bit beyond what I would be able to give you an answer on right now, just because annuities tend to be complex, and I certainly wouldn't be able to get into all of those details in a way that would allow me to give you a good decision. With regard to the $30,000, I think the key is to make sure that you have, first of all, a year's worth of living expenses in a safe and liquid account.

If you do, then that's great. You could redeploy this into some other investments, again, that are conservative and could be there for you growing, but also available down the road if you need them. If you don't have that one year's worth of expenses in a liquid savings account, I would move this right there, so you've got it if you need it for the unexpected, but it's safe and secure.

You're not going to lose any value. To find another advisor to check with, just go to our website,, click Find a CKA. We're going to take a break. We'll be right back. Welcome back to MoneyWise Live at the intersection of faith and finance. Taking your calls and questions today, a few lines open, 800-525-7000. On to Frisco, Texas, Suzy, you're next up on MoneyWise Live. Go ahead. Awesome.

I love your program. I'm calling because I am, I sold my house. I've had the money 245,000 in the bank for the last six months. I have about another six months lease, so I'll pay out a total of 2,400 for the year.

To me, it was well worth it because I'm getting familiar with Texas, so on and so forth. However, there's a big bubble that's about to burst. I don't know when it'll burst. I'm wondering if I should try to buy something.

Things sell here in three days and they're way overpriced or what can I do with that money that would be fairly safe because right now that 245,000 has not been earning any interest. Right, right. Yeah, you know, this is a challenge all over the country, Suzy. I know what you're facing there in Texas. We're certainly seeing it here in Georgia. I just read an article yesterday about a home that was listed and had 88 offers within 24 hours. You know, it's just a really hot stock market right now and, excuse me, real estate market for a number of reasons. Certainly, you know, because the economy is reopening, people have disposable income right now. You know, we're seeing historically low interest rates. I mean, all of that is really fueling this housing market that's been on an upward trend for quite some time. The challenge is, you know, you mentioned a bubble bursting and, you know, I think we will see a rollover in the housing market cyclically speaking because it does tend to move in cycles just like the economy and the stock market does. I don't see any reason that we would see a bubble bursting.

I mean, in 2008, we had a real systemic problem in our system that had to be worked through. I don't think we have something like that going on right now, but clearly we could see housing prices begin to cool, move from a seller's market to a buyer's market in concert with kind of moving beyond the reopening of our economy, getting beyond some of what's fueling this due to the stimulus that's out there and the easy money and all of that. Once that works its way through the system, I could see us beginning to temper economically and that would carry over to the housing market. The question is, are these prices going to continue to rise for the next couple of years, and if so, you know, could you be in a situation where you're paying rent, you know, beyond what you might want to, you continue to see housing prices move up and then when the housing prices begin to, you know, taper off or we see a dip, you know, you don't get back to where we even are today. And so, you know, the challenge with buying a house is it's not a pure investment because it's also where we live, right? So if it was a pure investment, we would buy it based on only the price that we're entering at and when it accomplished its purpose from an investment standpoint, we'd sell it.

Well, that's just not the way we operate with our homes. We buy them to raise our families and to live in and, you know, we buy them based on the location and, you know, what we can afford, of course, but it's a lot more than an investment, although we certainly move in with the expectation that we're going to be there long enough to see some appreciation. So I guess what I would say to you is, number one, if you're buying, you know, within something you can afford, meaning if your budget will support it, and so a typical rule of thumb on that would be the principal interest taxes and insurance payments should be no more than 25% of your take-home pay. If that's the case and you have at least 20% down, it sounds like you have probably a lot more than that, and you're planning to stay in this home for, you know, seven years plus, then even though you're buying in a seller's market and you are saying things are overpriced, and I would tend to concur in most parts of the country, as long as you're in it for the long haul, you should still do quite well and you don't get yourself into this position where you're paying rent prices that are already higher than normal and trying to time the market as to, you know, when you enter the housing market, which is just a kind of a losing proposition and may require that you wait longer than you're willing to wait and ultimately buy higher than you would be able to buy today. So I think for all of those reasons, I would tend to say as long as you've kind of checked all the boxes in terms of not buying more house than you can actually afford, I would tend to encourage you to go ahead and proceed and make that purchase. Before we get to where you would put the money if you decided not to do that, tell me what questions or thoughts you have. Well, if I find it, I could probably send another six months lease or another year, but if we do another year, that's almost $50,000 that went into rent for two years versus into, you know, so I don't know how to do the math, like to figure out if that was a bad move, because I love where I'm at right now.

The joy I get from this rental is amazing. Okay. And I'm going to have a hard time finding something like this. So that's what's difficult to figure out. And I thought, well, maybe if I could put some of that money into something that was semi-safe, but it either seems like it's a CD, which is still not paying, you know, or you're going into the risk of the market, which I think is it's pretty risky still with all the money that the government is spending and who knows when that's going to, you know, be a bigger problem. Well, the key would be your time horizon. And if you expect to use this money in less than five years, I don't think it should be at the risk of the stock market. The challenge is even the bond market has the potential for loss because as interest rates move up, bond prices are going to go down.

So you have, you could have a principal loss there, even while you're earning some income. There are some other options. You could go into TIPS, Treasury Inflation Protected Securities, things like that. But I think, you know, for money that you're going to need in two to five years, I'm saying even though interest rates are low, you're just going to need to, I think from my perspective, take the, you know, point six percent and it's moving higher that would come with a high yield savings account.

I think you just need to continue to think and pray through about where, you know, God is leading you. It sounds like, you know, you really like where you're at. I wouldn't, you know, be concerned about continuing to rent. If you enjoy the place you are, don't see it necessarily as money you're throwing away because, you know, it's your home. And, you know, there's the non-financial side to this as well that always needs to be considered. So I would say either stay where you're at, put that in a high yield savings and just wait for the interest rates to recover and improve over time or see if the Lord might lead you to something where you'll get just as much joy. You can buy it at a price point that fits with your budget and then stay there a long, long time and we appreciate your call today.

Quickly to Lake Carroll, Illinois. Suzanne, you're next on the program. Go ahead.

Hi there. I have a situation where I don't feel that I was acting out of fear, but as a steward of our investments back in September, we have a portfolio of just under about 800,000. We're already retired. We have no debts. We have emergency cash, but, um, I pulled out of our portfolio, which is mostly IRA accounts, um, pulled out, sold all the stocks, kept the bonds, sold all the stocks. So I've had about $600,000 in cash sitting there for six months and earning nothing, doing nothing. And I don't want to just dump it all back in. I was considering like dollar cost averaging back into the market and I'm just looking for advice. Yeah.

I appreciate your call. Uh, do you need, uh, an income stream from this money or is it just money that can continue to grow? We're already retired, but between my husband's pension and social security, we're doing just fine. So we don't really even need to pull out money. So in that case, why have 600 of 800,000 at the risk of the stock market? Um, well, it probably shouldn't be that much anyway.

I was at a 60, 40 kind of, you know, situation and it, you know, stocks just went up so much that when I sold it ended up to be 75, 25. Sure. Okay.

Oh, that makes sense. Do me a favor. We're going to take a quick break.

Just pause for a moment. When we come back, I'll give you my thoughts on where you go from here. We appreciate your call today. You're listening to MoneyWise Live. We're going to take a brief break, but we'll be right back. Stay with us. Welcome back to MoneyWise Live. I'm Rob West.

Thanks for being along with us today. Hey, would you like somebody to walk alongside you as you set up your spending plan? Perhaps think about, uh, getting your finances in order, developing a debt repayment plan or a giving plan. Well, our MoneyWise coaches would be delighted to walk alongside you. These are trained volunteers that do this as a part of their ministry. They do it virtually by meeting with you weekly, using technology to get you all set up in the MoneyWise app and answer your questions.

Also teach you some biblical principles along the way over what is typically six to eight weeks. We've got, uh, coaches available. Typically we have a month or two wait to get connected with a coach, but we've trained a whole new team of coaches in the last month. And so we've got some coaches that are ready to go. So if you'd like to connect with a coach at no cost, other than the digital workbook of $29, if you have the ability to pay for it, um, we'd love to connect with you.

Just head to our website,, and click connect with a coach. Suzanne, thank you for your patience. Just before the break, Suzanne called from Lake Carroll, Illinois, uh, describing her situation, uh, an account of roughly a portfolio of roughly $800,000. She saw some nice growth leading up to, um, the beginning of the pandemic last year. At that time, she pulled out the stock portion, which had grown to about 600,000 of the 800,000, uh, in the portfolio, about 200,000 in bonds, which is still there.

And she's wondering what to do with this money. And Suzanne, I think the first thing is just to recognize what you have, what a blessing that is. Secondly, that sounds like you did quite well leading up to that. So I wouldn't, you know, have any regrets about, you know, pulling out, even though the market has done quite well since then, you're still sitting on a large portfolio of God's money and you're asking the right question. And that is, how can I be the most effective and faithful steward of what God has entrusted to me?

I think thirdly, I would concur with this line of thinking that we were talking about just before the break. And that is that, you know, given your situation, that your husband's pension plus social security really covers your lifestyle. And this is surplus that is there. If you need it down the road, you had a major medical event. One of you or both of you needed long-term care. You want to do additional giving the Lord leads you to. It's there for those reasons or to pass on as an inheritance. And so it's not necessary to take risk, you know, in a way that is not appropriate for your situation.

So you and your husband have the opportunity to pray and say, Lord, what would you have us to do with this? And you can be as conservative as you want to be. I would say, perhaps as a starting point, think about maybe 30 percent in stocks and 70 percent in fixed income type investments that are more stable, that, you know, can throw off some income, but are not as much at the risk of the stock market. The benefit of that is even if you began with that 30 percent of the 800,000 or about a quarter of a million dollars to dollar cost average into the market over time, even if by the time you got it fully deployed, we hit a recession, you know, a year or two down the road once, you know, all the stimulus is worked through the system. And once the, you know, we've gotten past the reopening of the economy that's creating all this economic growth right now and the economy starts to cool and it rolls over, you know, even if it lasted two or three years, you would need to touch that money. Any of those investments could just remain there while you wait for them to come back. The key would be that you don't react emotionally at that point, not that you did before, but you would want to make sure that you would be prepared to leave it there and let it recover, knowing that the bulk of that money, maybe as much as 70 percent or more, you know, is in a more stable type investment portfolio.

The last thing I would say is I would really encourage you to consider having an investment professional come alongside you to help you deploy the strategy that you all both agree to that's consistent with your goals and objectives. Does that make sense though? It does, yes.

Thank you. I was, yeah, probably to be investing less riskily at this point sounds like a great idea. So yeah, so the dollar cost averaging, that would work?

It would, and I would be thinking in terms of maybe 30 percent. Again, it's, you know, you're the steward, so you and your husband need to think and pray through how much risk you want to take. But I think dollar cost averaging, whatever portion of this you decide you want to put at the risk of the stock market specifically, and if you wanted to connect with a Certified Kingdom Advisor there in Lake Carroll, you could find one at Just click find a CKA, and we appreciate your call. South to Chattanooga, Tennessee. Rod, you're next on the program. Go ahead, sir. Thank you for taking my call.

I appreciate it. I'm calling with my sister. She lives in Montana, and in the mid-70s, my parents and I bought a building lot in West Palm Beach there close to the Lion's Safari, and early 80s we decided we didn't want it. We sold it to my sister and her husband. They thought maybe they could build down there when he retired.

Unfortunately, a few years ago he passed away. They did not get to do that. She is concerned about capital gains tax. We should pay it in Montana or Florida, and we'll hit her very hard. Yeah, well, because it's not anyone's domicile, there will be capital gains on the property. Assets held longer than a year are either going to be, you know, 0, 15, or 20 percent, depending upon your tax bracket as a long-term capital gain. You know, the capital gains for individuals are reported on your federal income tax return, but also the state can have a capital gains tax as well. Since Florida has no income tax, there's no capital gains for individuals, only corporations, so you won't have any state capital gains there in Florida. Montana piggybacks on the federal government's income and capital gains taxes, so Montana will likely assess capital gains taxes on her state income tax return, even if the gains are required out of state. But they do offer, I believe, a 2 percent capital gains tax credit.

My team is telling me that effectively lowers its top rate down to about 4.9 percent. Bottom line is, if there's gain there, this is an investment property, there's going to be capital gains owed at the federal level for sure, and then some amount for the state of Montana, if that's where she files. So I think this is a year, certainly, if she doesn't normally use a tax preparer to have a professional helping her file that return. Anytime you have anything unusual, I think it's even more important to have a competent professional walking alongside you. I would actually advocate for a tax professional every year for most people, but I think certainly this year, and she should expect to pay that.

You want to get that determined in advance so it's not a surprise, and she can get that paid on a timely basis, and we appreciate your call. Let's go to Nebraska. Becky, you're next on the program. Go ahead.

Yes, I gotta take a speech. My son has switched jobs. He's 23. He's got a 401k that's got about 13,000 in it, and he has a chance to roll it into the new job that he has, but I recently came across him rolling it into gold or silver.

Any ideas? Yeah, that would not be my favorite option for him, Becky. I think either rolling it into that new 401k just to keep things simple so he can just continue to build that account up, making sure he either does his research on the investment options in the plan to pick the very best mix of investments for him at his age and stage of life, or getting somebody to advise him in that.

That's going to be the simplest because he's going to have one account. He could roll it to an IRA, which would allow him to have a little more control over it and open up a lot more investment options because at that point he could invest in any stock, bond, or mutual fund. Gold is getting a lot of attention lately just because of the fear of inflation, and anytime we have uncertainty like what we've been through the last year for sure with the pandemic causes folks to take another look at the precious metals. What I tend to look at is the longer term performance and volatility of the precious metals, and the data just isn't there again over a long period of time.

I'm talking the last 100 years, even if we look at the last 25 years. He's got a lot of time ahead of him if the Lord tarries and he has good health for this money to grow, and the very best performance is going to be in a properly diversified stock portfolio just in terms of the annualized return he can expect based on historical norms and the volatility. So I'm thinking at his age that's going to be the best option for him, and then at that point he would just need to decide does he roll it into the 401k or an IRA, and if he chooses the IRA he's going to have to have an investment strategy to go along with it, and our friends at can help with that. So hopefully that's helpful to you. We appreciate your call today.

Dee in Miami, Florida, you're going to be our last caller today. Go ahead. Yes, I just wanted to know, I wanted to start an investment of sorts for grandkids two and four, so what would you suggest other than the college funds? Yeah, so you'd like to keep this outside of a college fund, is that right?

Yes. Okay, yeah Dee, what I would recommend is that you open an investment account, it'd be a brokerage account in your name, or if you're married you and your husband's name, perhaps jointly, making the kids or, you know, their parents the beneficiary, but the idea would be that you begin to segregate this money, you begin to invest it systematically, and I would use either the Schwab Intelligent Portfolios or Betterment, you know, or even Vanguard has a new robo advisor solution, but the idea would be that you'd be systematic in your contributions to this taxable portfolio, it would be in your name, so you could decide when you ultimately give them these funds as a gift, but, you know, you'd have control over it, so if at that point down the road they were not making wise decisions with their money, you could decide to hang on to it for a little bit longer, so you're not supporting an unhealthy lifestyle, let's say, but that's going to give you a good broad diversified approach and at very low costs, so Betterment, Vanguard, Schwab Intelligent Portfolios, any of those would be a great place for you to go. We appreciate your call today. Hey, thanks for tuning into the broadcast. This is MoneyWise Live where biblical wisdom meets today's financial decisions. I want to say thank you to my team today, producing Deb Solomon, engineering Amy Rios, on research today, Jim Henry, Gabby T answering phones. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I hope you'll come back and join us tomorrow. We'll be here as we talk about vacation tips for this summer. God bless you.
Whisper: medium.en / 2023-12-02 00:47:14 / 2023-12-02 01:05:02 / 18

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