Investing, in the final analysis, is a matter of faith. This, I think, is an important fundamental to understand. I am not writing of “blind faith.” Nor, necessarily, religious faith. It is my conviction that there is no such thing as blind faith. If a person acts blindly, it is not out of faith; it is out of foolishness. Faith always has content, whether well articulated or not.

The content of an investor’s faith includes faith in human nature. Human beings have a natural drive to want to do better for themselves and for the world in which they live. We easily understand the part about bettering ourselves, some would call it greed. For some people, this drive is greed, for others it is an honorable desire to provide for themselves and their loved ones.

The part about bettering the world in which we live may be altruistic or it may simply mean that I want the community in which I live to be more pleasant for my own enjoyment and my own enjoyment is hindered if my neighbors are in poverty and squalor, therefore I want them to do well also. That is part of why people move into “better neighborhoods.”

As an investor, whether I articulate it or not, I am counting on these kinds of forces to continue to be in effect in the corporate world where I invest my money. I count on the fact that the CEO wants to be “a winner” and wants his bonus – either because of his drive to provide for himself and his loved ones or to fulfill his insatiable greed. I also count on the fact that corporate leaders know that in order for their products to sell, they have to be making the community better in some way – or at least it has to be perceived that way, otherwise, consumers will not consume that product.

Economic policies and government programs come and go, but as long as human nature continues to be free to be expressed in commerce, I can invest successfully. This is a basic tenet of the investor’s faith. It doesn’t require religion; it just requires a realistic view of human nature.

This is basic to free market economics and is heresy in the economic theories of socialists or communists. Those economic systems have a different view of human nature.

There are other much more academic parts of the investor’s statement of faith and this blog is full of those statements that have come from the work of men like Harry Markowitz, Eugene Fama and Ken French and others. Investing is not, in the short run, a sure deal. There are risks (another of the tenets of the investor’s faith) and there are techniques to mitigate risk. Just keep the faith.

about the author: Charles L. Stanley CFP®, CHFC® & CKA®

CharlesStanley640x640Charles L. Stanley CFP®, CHFC® & AIF® is a CERTIFIED FINANCIAL PLANNER™ professional and a Chartered Financial Consultant, and he holds the Accredited Investment Fiduciary® designation. For more than 20 years, Charles has served retired physicians, business owners, corporate executives, retirees, and widows, helping them with their estate planning, tax strategies, risk management, investment selection, business succession, and retirement planning.

Charles is a co-author of T.A.S.K. – The Trusted Advisors Survival Kit, published by LexisNexis and is the founder and editor of Capital Markets U.com Magazine: He has published an e-book, Forewarned is Forearmed: How to Make an Annuity Purchase (or not) You Will Never Regret, and was also a contributing author on How To Manage a Million Dollars Or Less. Charles has been quoted or published in the Journal of Financial Planning, San Diego Union Tribune, San Diego Daily Transcript, American Funeral Director Magazine, Canadian Funeral Director Magazine, The Bottom Line: Independent Voice for Canada’s Accounting and Financial Professionals, Financial AdvisorPro, The Family Business Advisor, and Christian Businessman Magazine. He also hosted Senior Money, a radio talk show heard on KCEO AM 1000 and he has appeared as an expert witness in both NASD arbitration and San Diego Superior Court. He is also a Five Star Wealth Manager.

Learn more and/or Contact Charles

Continue Reading

Other articles filed under LA/OC CFP Team Posts

How Small Businesses Are Applying for Disaster Relief

May 18, 2020 - The unprecedented effect of COVID-19 on the economy has resulted in a number of disaster relief alternatives being available to small businesses — and things seem to change rapidly as they scramble for funds. WorthPointe advisor John Chapman spoke with...
Continue Reading

3 Reasons You Should Care About John’s New Letters

March 11, 2020 - John Chapman, CFP®, CKA®, has recently earned the Certified Kingdom Advisor® designation. This certification reflects his training and expertise in biblically informed financial practices and the use of money with a sense of purpose and view of eternity. What does...
Continue Reading

The Intrapreneur’s Wealth-Building Toolkit

July 17, 2019 - That’s not a typo in the headline; this blog is directed toward intrapreneurs — folks who hold manager, VP and director positions at public companies. These ambitious leaders often self-select as, but since they work within large organizations, they have...
Continue Reading

Your Sequential Investing Hierarchy: First Things First

June 12, 2019 - As I’ve noted in a previous blog, I like to break down where money goes into four buckets: Live, Give, Owe and Grow. Today, I’m going to expand on that concept by introducing the five sub-categories to the Grow bucket...
Continue Reading

Start With the End in Mind

May 14, 2019 - The younger you are, the less you’re likely able — or willing — to think about what your retirement might be like. That’s OK, but you probably do know one thing, even if you’re a millennial with years and years...
Continue Reading

Return to Blog Home