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Stay in the Market Or Go? With Cole Pearson

FaithFi: Faith & Finance | Jun 7, 2023


Show Notes

When it comes to the stock market these days, many investors are asking a question reminiscent of an old song lyric: “Should I stay or should I go?” With a possible recession looming, is it time to bail out of the market? We’ll talk about that with Cole Pearson on this Faith and Finance. 

  • Cole Pearson is President of Investment Solutions at OneAscent, which is a family of companies in the faith-based investing space, and an underwriter of this program.
  • The problem with this particular question is that you then have to answer another question, which is … ”When do I get back in?”
  • In times like these it’s important to remember that ”Investing is about time IN the market, not TIMING the market.”
  • One of the most powerful tools that can help combat fear and emotional decision-making with our investments is to have a philosophy or guiding principles that we determine ahead of time.
  • At OneAscent, they employ 3 overarching principles – Values-Based, Globally Diversified, and Long-Term.
  • VALUES BASED: God created us to be thoughtful stewards. And as stewards, we should consider aligning His assets with His principles and companies that bless people instead of causing harm.
  • GLOBALLY DIVERSIFIED: Did you know diversification predates the stock market and modern portfolio theory? Ecclesiastes 11:2 says “Divide your portion to 7 or 8 for you know not what calamity may come”
  • LONG TERM:Given time, maintaining a long-term perspective is key. And investors who talk with their advisor, choose the right allocation, and can stay the course in the long run, find the most success.
  • According to a JP Morgan study from a few years ago, the average investor underperforms a moderate portfolio by about 3% annualized over 20 years. In other words, if you started with $100,000, over 20 years, the average investor misses out on $125,000 in growth, a difference of 78%. This is largely because the average investor makes below-average decisions when the going gets tough.
  • Most investors don’t have a better than 50/50 chance at being right on any particular decision; when to get out and when to get back in are two different market-timing decisions
  • Two decisions that are both the flip of the coin only give you a 25% chance of being right
  • Can anything be done to recession-proof one’s portfolio?
  • No portfolio is recession-proof, but there are things you can do to make your portfolio recession-friendly.
  • Remember Ecclesiastes. Diversification is key. Some timely questions you might consider or ask your advisor about if you have one are:
  • Do I have sufficient international exposure, in both developed and emerging markets? The past decade saw US stocks outperform International by an average of 6% per year but the long-term trend is more balanced. Valuation is one of the primary determinants of long-term returns; today international stocks are far less expensive than US stocks. US stocks trade at a P/E ratio of around 18x, but international stocks are around 13x earnings.
  • Another would be whether I am investing in alternatives or non-traditional assets like gold, commodities, or hedging strategies to minimize volatility. Many times WE can be the biggest risk that our portfolios face – so minimizing volatility (or smoothing out the ride) can help us stay invested.
  • Bear markets are a fact of life, so what is important is how an investor responds to them:
  • You should not invest money that you need for next month’s groceries.
  • Mike Tyson famously said ‘everyone has a plan until they get punched in the face’, and that’s what a bear market can feel like.Here’s what you can do:
  • Take the opportunity to sell something at a loss if it would benefit your taxes
  • Rebalance your portfolio to align with your long-term plan.
  • Evaluate your plan – make sure that you are still on track.
  • Most importantly, don’t make an emotional decision.
  • Preparation and planning will allow investors to weather the storm and come out the other side.
  • OneAscent approaches faith-based investing using the following steps: 
  • 1. ELIMINATE from our universe those companies whose products or practices are causing harm.
  • 2. EVALUATE companies to make sure they meet the client’s investment objectives.
  • 3. ELEVATE companies who are making the world a better place.
  • Thankfully faith-based investing is a maturing but also rapidly growing space within this industry.  There are several great funds and options that have strong 10+ year track records.  Even more exciting than that is that more and more great managers and funds are coming out each month giving investors who desire to align their faith and wealth options.
  • For more information, visit OneAscent.com

On this program, Rob also answers listener questions: 

  • If you have a traditional IRA with a company like Vanguard and find that your money is supporting things you don’t believe in, what are your alternative investment options? 
  • Can balance transfers be an effective way to pay down debt and avoid interest? 
  • What are the key differences between life insurance policies and annuities and which might be right for you? 


Remember, you can call in to ask your questions most days at (800) 525-7000. Also, visit our website at FaithFi.com where you can join the FaithFi Community, and give as we expand our outreach. 

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