I first published this column back in 2015, when the stock market had a few hiccups. Now that the market is going through a particularly tough stretch, I thought it was time to revisit it—both for my own peace-of-mind and that of any readers who have money invested in the market.
If you’re like me, and you have money invested in a 401K account, the last few weeks have been more than stressful. The stock market has been moving steadily downward and it’s unclear if the bottom is yet in sight. So how do you stay calm and spiritually centered as you watch your retirement fund dwindle and the scared voice inside you yells sell-sell-sell?
As I frequently do, I turned to a wise source for advice—the late-John Templeton, the billionaire businessman turned life philosopher best known for the mutual fund that bears his name. In the book Spiritual Investments, Wall Street Wisdom from the Career of John Templeton, author Gary Moore looked at the principles that guided his thinking. (It should be noted that Moore worked for Templeton for many years.)
Spiritual Investments explores 17 key investment principles of Templeton, and how they were informed by his spirituality. I’ve edited the list to what I believe are the core 7 tenets of his philosophy. (If you’re looking for deeper insights, I recommend picking up the book.) In each example below, the investing principle is backed up by the spiritual principle it relates to, which is indicated in italics.
7 Keys to Spiritual Investing
- Invest—don’t trade or speculate. As Moore points out, “we do better in the long run by viewing the stock market as a ‘home base’ rather than as a trip to the casino.” That means not overreacting to a sudden market downturn, chasing the latest hot stock or jumping in and out of the market on a whim. Over time, the market invariably goes up. Calm your mind and stay relaxed as you pursue your life’s goals. Constantly jumping from one relationship, job or spiritual calling to another seldom offers long-term gains or happiness.
- Buy low—at the point of maximum pessimism. This is a key maxim of Templeton’s philosophy and is the best way to make money in the market. Yet while every investor knows to buy low/sell high, few follow through on it. Many jump into the market when stock prices, and enthusiasm, are high—and stay out of the market during downturns, which is actually the best time to buy. Don’t follow the crowd. And remember that just like in real life, those who hit bottom often learn from their experience and turn things around, ultimately becoming success stories.
- Search for quality. Invest in funds that are well known and companies that are leaders in their category. Look for categories that are consistently growing. When you surround yourself with quality people, it can’t but help you grow as a person. Associate with individuals who you trust and admire.
- Diversify. In stocks and bonds, there is greater safety in numbers. Do the necessary research, and then spread out your investment dollars, diversifying by company, industry, country and risk. Don’t dedicate your energies to just one facet of life, ignoring everything else. Balance and diversify when it comes to devoting time to your family, friends, hobbies and your spiritual life.
- Don’t panic. It’s the worst thing you can do as an investor, because acting out of fear often results in bad decision-making. The only reason to sell during a market downturn, is to buy other, more attractive stocks that have also dropped in price. If your portfolio performed well before a crash, there’s no reason to think it won’t do well after one. During challenging times, relax. Breathe. Rely on your faith, because faith and fear cannot coexist.
- Learn from your mistakes. The only way to avoid mistakes is to not invest, which is the biggest mistake of all. When something goes wrong, figure out how you might avoid the same error in the future. Turn each mistake you make in life into a learning experience. Your progress in life is based on the mistakes you make and how you learn from them and grow.
- Use prayer to gain perspective and quiet your mind. Before you make a financial decision, pray. The serenity that comes from prayer can help you think more clearly when making an investment decision. The simple act of prayer or asking for guidance can help you with any life choice. Often the answers only come when we are still enough to hear them.
In closing, I should point out that John Templeton was a great humanitarian who gave away much of his fortune before he died. Moore reminds us that Templeton believed that “those who do good, do well.” He suggests we give 10% of our income to charities and that “giving an even greater percentage of our time and energy to worthwhile causes” is an investment that pays rewards money can’t offer.