7 Spirit-led Investing: Spurious or Inspired?

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1 Wilfred J. Hahn is the founder of The Mulberry Ministry, and publisher of Eternal Value Review, written for thinking Christians seeking to understand the times. An executive and chief investment officer in the global financial industry, his views and research are particularly relevant to Christians living in the endtimes, a time of great prosperity, financial slavery and economic injustice. Wilfred J. Hahn 7 Spirit-led Investing: Spurious or Inspired? The Mulberry Ministry, publishers of Eternal Value Review. All rights reserved worldwide. One-time reproductions and excerpts are encouraged without permission. For multiple reproductions please provide and acknowledgement to The Mulberry Ministry, P.0. Box 2609, Station R, Kelowna BC, Canada V1X 6A7. The use of this publication for the promotion of any other commercial activity or pursuit is expressly prohibited. The Mulberry Ministry does not endorse any thirdparty financial product, service or any promotion of an investment scheme. If not otherwise noted, all scripture references are taken from the New International Version (NIV) of the Bible. PO Box 2609 Station R Kelowna BC CANADA V1X 6A7 Wilfred J. Hahn MMP-007

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3 7 Spirit-led Investing: Wilfred J. Hahn 11 Copyright 2005, Mulberry Press Inc.

4 7 Spirit-led Investing: T his booklet tackles a difficult subject spirit-led investing. As such, the views expressed may trigger some sensitivities and bump against deeply-held beliefs. So why bother to write it? Because I am very concerned that some people may be being led astray by spurious claims. I would dearly like to save them from possible financial harm. For obvious reasons, anything to do with money is fertile ground for deception and confidence schemes. It has been that way since the dawn of time. Therefore, this same vulnerability will apply to both those who make claims of being spirit-led investors and the people that believe them. I have heard more than a few people claim the gift of Spirit-led investing. What immediately roused my concern in every instance was the context in which this statement was made. Invariably, the individual claiming this capability was selling their service perhaps financial planning, brokerage or a financial advisory newsletter for a fee or commission. Clearly, the services of this spirit were up for sale. Several years ago I received a number of promotional mailings from a Christian investment advisor who was offering his service of Spirit-led investing for a commission of 10% to management. In other words, his spirit-led investment recommendations 1 were available for a cut of 10% of all the capital gains you would earn through the benefit of his advice. If 10

5 9 borders on the occult. It is not much different than a host of other techniques used in the secular world to forecast the movement of financial markets. Arcane wave patterns, astrology and beliefs in mystical market forces, are all approaches that fall into the same category. What they all have in common is a fee usually a rich one. Good stewardship advice is obviously beneficial. However, the next time an individual makes the claim of being a Spiritled investor, alarms should ring. A high level of scrutiny is required especially if the person making this claim is making their living selling investments or by providing financial advice to others. Ignore their spiritual advice (and give them a copy of this booklet). Separate the investment advice from the implied guarantee of spiritual infallibility. Consider their counsel on earthly merits alone. And, importantly, ensure that your spiritual fidelity your Spirit-led life is under your management alone, not someone else s. you made $10, he wanted $1. This individual would make stock recommendations, and claimed fantastical gains of 50% to 300% and more on specific security selections he had made in the past. Moreover, the reader was lured with the hope that $5,000 could be turned into millions in a matter of only a few years. I found it difficult to believe that many will have found these advertisements credible, let alone believable. Yet, his firm advertised similar claims with full-page ads in one of the largestselling Christian magazines in North America. Of course, it is not always the case that claims of Spirit-led investing will be seen to be so obviously self-serving as in the previous example. Yet, the same bias may underlie the motivations of any provider of financial services that is claiming other worldly visionary skills in predicting the future whether stock market movements, interest rate trends etc. A local Christian radio station broadcasts the advertisements of a financial planner (an individual who will receive the bulk of his remuneration through the sale of mutual funds). In one of these clips, he openly claims to offer Spirit-led advice with respect to financial market investments. Though I do not know this individual personally, I would not be surprised to learn that he honestly desires to serve his clients with good advice in picking mutual funds. However, claiming the Spirit as a good housekeeping seal of approval for any investment recommendations makes some spurious representations that will surely lead to misuse and abuse not to mention financial harm. Wealth management professionals making such claims may not know that they could be deceived. Even worse, some of their clients may not either. To make or believe such claims is at best the result of muddled and wishful thinking. In the interest of equipping investors with safeguarding perspectives, let s examine the inherent risks and dangers of spirit-led investing in the following pages. 2

6 Can people be Spirit-led in the management of their financial resources? For people whose lives are Spirit-led in general, it would only be reasonable to conclude that their finances and material wealth should be governed in the same way. That would only be consistent and in fact should be the case in the lives of all Christians. But to conclude that this should be so is not to presume that a Spirit-led life is a sure route to great wealth or an above-average investment performance record. To believe this would be to ignore Scripture, simple logic and actual experience. For one, it doesn t follow that people will experience ups and downs in virtually every area of their lives with the sole exception of their finances and investments. Isn t it part of God s order that our relationships, situations and state of personal health will experience highs and lows, adversities and blessing? Scripture makes clear that God himself takes an active role in our hardships, using such situations to perfect us in faith. If fact, we are even counseled to take joy in such trials. (James 1:2) Yet, when it comes to our finances some would believe that our wealth and prosperity is preserved to enjoy only an up-trend forever so long as we are Christians and Spirit-led. To be sure, it is a view that is enticingly sweet. However, I find that the whole counsel of the Bible does not support this thesis. Neither can I find any facts or principles in the secular world to support this view. No Evidence of a Guarantee. Why is it that Christians do not all buy and sell things at the same time? This may seem like a frivolous question. Yet, it is an important one. If indeed everyone was led by the Spirit of Truth or had access to a Spirit-inspired prophet, wouldn t they all benefit from the same advice? Presumably, there is only one Spirit. That being the case, the advice Truth, in other words must be changeless and the same. If investment guidance given to or by Christians is Spirit-led, then it only follows that every Spirit-led Christian 3 will receive the same holy tip. Therefore, every believer buying or selling houses, stocks or mutual funds would led business management Godly principles in action, in other words has given them the sufficient advantage to be amongst the most successful firms in their industries. Corruption is everywhere and good guys all too often finish last in the world s sweepstakes. At times, godliness may in fact be a disadvantage in material terms. The same observation applies to financial investing. Surveying the top-rated investors around the world, it is rare to find any that are declared Christians (or easily identified). Among the investment greats (as the world may see them), I can think of none that are full-bible-believing and practicing Christians. Spiritual advice for sale In our day, many people connect stewardship with investing more particularly with buying mutual funds. A number of socalled Christian financial newsletters thrive on this association. In my view, being a good steward of one s resources does not necessarily mean that one must invest and save heavily. Neither does Spirit-led investment presume that one must invest in stocks and bonds or mutual funds. To invest may be a good thing, it may not be. As our firm frequently counsels, it will more often depend on motivations and individual situations. As mentioned, stewardship and investing are not one and the same. In the popular sense, investing is something entirely different. It is partly skill and knowledge; partly forecasting even divining as some see it. After all, in financial markets nothing is certain, not even a long-term trend. Certainly, being a good steward will have no connection to being able to play the world s financial markets successfully. Being a good steward and a Spirit-led investor may not mean that one will have accumulated a lot of money at all. Actually, more likely than not, you may be Spirit-led to give much of your wealth to the poor. Conclusions In short, claiming to be a spirit-led investment adviser is claiming to be a seer and of being able to look into the future. Some even 8 go so far as to imply that being a spirit-led investor is to have the Midas touch. Claiming such a spiritual power

7 tended to see peace and prosperity. It was only God s true Spirit-led prophets that spoke the truth and had a perfect forecasting record. The only problem apparently was that the truth wasn t usually agreeable. More often that not, their messages were not positive. There is evident an inconsistency in the fact that today s spirit-led forecasters are more anguished when predicting financial downturns than in upturns. They seem to be much more worried about being wrong in predicting a downturn which would prompt advice that could preserve people s wealth as opposed to a wrong up forecast that ends up in disaster for their clients. By implication, it is more acceptable to be wrong in predicting an upturn that leads to great financial loss than it is to be incorrect in a forecast that intends to protect people s fortune. It is a reflection of the human spirit. When I was still a novice securities analyst, I remember an experienced stockbroker warning me: People will hate you more for missing an upturn, than they will for recommending a stock that sewers. As a general statement, he was right. True Spirit-led advice, however, wouldn t reflect such a bias. To be Spirit-led, the spirit of love should be evident. Benevolent advice should seek to serve people s best interests rather than cater to their worst weaknesses. Moreover, whether a forecast may be negative or positive, it should receive the same standards of scrutiny and integrity. Good stewardship, a spiritual gift or a talent? I take the position that skilled investing is a talent one that isn t confined to Christians alone. This talent appears to be distributed to people in the same way that the sun [rises] on the evil and the good. (Matthew 5:45) Christians will exhibit this skill as will non-believers. But does it follow that Christians would be better-than-average (or even just average) investment practitioners in a worldly financial system? If the world and its markets are driven by godless motivations and corrupt principles, wouldn t it be surprising to discover that Christians might be at a distinct 7 disadvantage? I have met very few business people who claim that Spirit- do so at the same time and at the same price. Is this phenomenon observed in the real world? No. For one, the advice from different so-called spirit led advisors that I have heard was not exactly the same. Conflicts were evident between their two views. Secondly, it is true that not all Christians are rich even though it may be true that they are Spirit-led. Thirdly, I have not found any record of Christians all buying and selling at the same price simultaneously. I have witnessed many blow-offs and meltdowns in financial markets. No evidence is available that these were the result of Christian masses trying to either get in or out of financial markets on the same day. To the contrary, these abrupt market shifts were more the result of a large number of people stirred to sudden action either because of greed or of fear. Neither of these motivations are evidence of Spirit-led living according to the Bible. You may have noted that the whole discussion to this point has depended on one unstated assumption. If we are to receive the benefit of Spirit-led investment advice then what should be its advantage? Those who claim this gift mean to imply that the benefit of their spirit-led counsel is to be better able to buy low and sell high. The evidence that they are led by a spirit will be found in your enlarged portfolio mostly gains and few losses. However, if that were to be true, then this benefit would need to be observed in the marketplace. Again, I can find no evidence to support this delicious premise. In fact, I know people who have prayed days for guidance that they might buy a house of God s leading only to see it decline in price after their purchase. They may have bought the right house at the right time just as God may have willed for a specific and personally-designed reason. As it was, the tide of housing prices proved to be down and true to the popular saying All ships fall and rise with the tide. So it seems evident that the laws of supply and demand are not repealed so that Christians can exclusively be sure to get the market s top bid. That is not to deny that anything is possible with God. 4 Yet, at the same time there is no evidence of a surefire formula that can be invoked at our will, always to produce

8 gain and profit. In conclusion, we must agree that Christians do not buy or sell at the same time, nor do they all sell high and buy low. Spirit-led action is important in our lives, but it doesn t necessarily mean that we all will be bathed in profits. Wasn t Joseph a Spirit-led Investor? Joseph of the Bible is often cited as the precedent for modern-day financial prophets meaning spirit-led investors. If Joseph could corner both the spot and futures markets in wheat on the advice of a vision from God, couldn t the same benefit be possibly demonstrated today? In my view, the situation is hardly comparable. For one, Joseph didn t receive this significant vision all by himself. The Pharaoh received it. Joseph was given the interpretation, an exercise that was entirely devoid of any conflict of interest. He had no opportunity to delude himself under the pressure of great temptation to gain riches. At that time, called out of prison, he had no reason to believe that he could possibly benefit materially from his interpretation let alone receive a senior government appointment. His spiritual leading was not clouded by the bias of greed and avarice. In any case, Joseph s interpretation and advice was of epic proportions. It was not a trivial leading to help him make money in the agricultural commodity markets. To the contrary, his God-given interpretation led to the edification and benefit of others. It spurred him to make defensive preparations for a major seven-year depression in order that lives might be preserved. The goal was not simply to preserve high-living lifestyles and temporal wealth, but to save a nation from starvation. He wasn t trying to call the next up-leg in the stock market, discern the next best-performing mutual fund manager, or a little recession that will be a mild one as one advisor predicted who claimed to be Spirit-led. This prophet was hardly selling his advice, nor was he preoccupied with preserving people s wealth. As it turned out, God s providential leading through Joseph served to preserve His very 5 own seed. The nation of Israel came out of Egypt, later giving rise to the line of King David, the ancestor to the Messiah. In my view, Joseph isn t a suitable candidate to support the claims of the Spirit-led investment proponents today. If any Biblical reference fits, it is the case of the slave girl in Acts 16 who was a spirit-led fortune teller. Her owners made a fortune with the aid of her divinations. This account appears to be a clear case of spirit-led enterprise (though perhaps not investing). As it turned out, it wasn t a spirit that Apostle Paul could find kinship with. He drove it out of the slave girl. Not surprisingly, her owners were very upset at the loss of the income-producing potential of their chattel. There are some valuable lessons in this story of the slave girl. First, we should test the spirits. Second, we can expect that much of the world will not be happy to learn that there is no such thing as a sure-fire Spirit led advisor or investment guru. Good Times Roll for as Far as the Eye Can See. Most spirit-led advice seems to be more concerned with capturing the upside of good-time financial markets. Invariably, what these financial prophets conjure is a positive trend, if not over the short-term, certainly over the far horizon. Here we see a lopsided emphasis. For one, there is a greater weight on the positive winning and gaining than there is preserving and fortifying against an unexpected negative event. This is exactly the same bias evident in the secular financial world that is supposedly not Spirit-led. For example, stock market analysts make more buy recommendations than sells by a factor of up to 100 times and more. It is rare that investment strategists and economists will predict a downturn in the economy and financial markets. Yet, recessions and financial downturns occur all the same. In fact, many of these seers continue to deny that a recession can happen until well past the point of its inception. However, they do not shrink from making forecasts of great prosperity far into the future some predictions spanning across decades and centuries. Most have no hesitation predicting economic bottoms in the hope that a near-term upturn in financial fortunes is in the offing. The Bible 6 speaks of many prophets who exhibited the same bias false prophets. Invariably, they were in the majority and