Part 3 of the “Parable of the Talents” Series

16He who had received the five talents went at once and traded with them, and he gained five talents more.     17And likewise he who had received the two talents–he also gained two talents more. (Matthew 25: 16-17, Amp.)

Here we see the response of two of those servants in which the Master entrusted his property.  They immediately went and “traded.”  The word “traded” come from the Greek word ergazomai. In this context, these servants “put this money to work.”  Perhaps they invested it in the first century equivalent of the stock market.  We can’t say for sure.  Regardless, they invested these funds in a vehicle that resulted in a 100% return on the Master’s money.  Not bad.

These servants already had their basic needs met by virtue of their relationship with the Master.  They had food, clothing, and shelter as members of His household.  This money apparently was not for these basic needs.  Although the money belongs to the Master, He is giving His servants a great deal of freedom regarding its disposition.

What are we doing with our money once our basic needs are met?  What avenues of increase are available to us?  Are we taking advantage of them?

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Related posts:

1. Applying the “Herd Mentality” to Your Finances: The Care & Feeding of Your Money
2. Talent for Multiplying: Heavenly Returns
3. Talent for Wealth Multiplication
4. Talent For Stewardship
5. Talent for Wealth: Digging is Not Good Exercise

I am intrigued by super-investors such as Warren Buffet and Peter Lynch. These individuals have enjoyed ginormous investment rates of return over years. I have wondered if their investment principles have Biblical parallels.

Please understand that I am not making any spiritual assessments regarding these gentlemen. While I have studied their investment methods, I have never met them nor had dealings with them. What I am asserting is that very often long-term success strategies very often can be tied to biblical principles even if the practitioners are unaware of or deny such comparisons.

Bible wisdom very often has very practical and tangible benefits in addition to the invaluable, incalculable spiritual blessings that we normally associate with scriptural truths.

So, having said that, here is my list of Biblical Guidelines for successful stock-picking:

Invest in what you know

“Desire without knowledge is not good, and to be overhasty is to sin and miss the mark.” Proverbs 19:2 (AMP.)

Don’t fall prey to some “hot tip.” Your experience along with some research can lead you to investment opportunities. “Invest in what you know” was a phrase that Peter Lynch made famous. Mr. Buffet has passed on opportunities that he did not understand.

If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them.” Peter Lynch.

Invest in quality companies

“But others fell on good ground and yielded a crop: some a hundredfold, some sixty, some thirty.” Matthew 13:8 (NKJ)

“You will know them by their fruits. Do men gather grapes from thornbushes or figs from thistles?” Matthew 7:16 (NKJ)

Superior, well-managed companies tend to do well year after year. These are the ideal “ground” to plant your seed (i.e. money). Such companies typically do not resort to dishonesty or ethical gray areas. The results of such efforts (i.e. profits) are evident.  As in farming, good ground can produce abundant fruit season after season.

“If a business does well, the stock eventually follows.” Warren Buffet.

Examine a Company’s Management

“ The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5 (NIV)

“You only have to do a very few things right in your life as long as you don’t do too many things wrong.” Warren Buffet.

Invest for the Long Term

“Dishonest money dwindles away, but he who gathers money little by little makes it grow.” Proverbs 13:11 (NIV)

Oftentimes, investors may get discouraged or stressed during times of underwhelming market performance. During such times, the superstar investors typically remain calmly confident in their investment strategies. They know that quality portfolios will endure till more prosperous times.

“Our favorite holding period is forever.” Warren Buffet

“Just because the price goes up doesn’t mean you’re right. Just because it goes

Be Patient

“The plans of the diligent lead surely to advantage, But everyone who is hasty comes surely to poverty.” Proverbs 21:5 (NASB)

Warren Buffet on investing: “There are no called strikes.” Mr. Buffet occasionally is criticized for not buying anything during long stretches of time. However, he knows that the rewards of buying that one great company outweigh those of buying a few mediocre ones.

Have I missed anything? What Biblical principles do you know of that will assist in evaluating an investment opportunity?

Related posts:

1. Talent Tips: Bad Relationships Can Be Hazardous to Your Wealth
2. The Bible is the (First and) Last Word
3. 8 Biblical Reasons to Invest
4. Talent Management Tip: At Least Act With Interest
5. Talent For Putting God’s Money to Work for You

The Wisest King Advocates True Investment Diversification

Give portions to seven, yes to eight,
for you do not know what disaster may come upon the land. (Ecclesiastes 11:2, NIV)

In 1990, Harry Markowitz won the Nobel Prize in Economics. Dr. Markowitz was one of the founding architects of  Modern Portfolio Theory (MPT). One of the key underlying tenets of MPT is the use of diversification to optimize investment portfolios.

Nowadays, diversification is a mainstream principle within the realm of financial management.  It makes sense from a number of perspectives.  You can design a portfolio so that when the economy is not so hot, at least a portion of your investments should fare better.  Diversification is regularly touted as an advantage in investing in mutual funds as this investment vehicle offers diversity that may not normally be available to “small-fry” investors.

However, this verse goes beyond investments as we typically think of them.  To get a greater perspective, let’s examine the prior verse:

Cast your bread upon the waters,
for after many days you will find it again. (Ecclesiastes 11:1, NIV)

Bible scholars often interpret this verse as an exhortation to charitable giving.  Certainly, “bread” is indicative of provisions necessary for life.  “Waters” can represent multitudes (see Rev. 17:15).  Water also gravitates to the lowest levels.  Therefore giving substance to the poor is not lost.  We will “find” it again and in our time of greatest need — when disaster strikes (as we can infer from verse 2).

Thus we have an expanded definition of “investment diversification.”  These verses examine wise investing.  Waters are described as a place of sowing seed (Isa 32:20).  “Investing” however goes beyond the marketable securities and savings of everyday business.  God views the use of our substance in meeting the physical needs of those less fortunate than ourselves as wise stewardship that will generate “returns.”

While these verses reinforce some basic principles of wise financial management that we should follow (e.g. maintaining an emergency fund and investing in diverse areas), do not overlook the “investment potential” of those in need around you.

Related posts:

1. Giving: Unless It Feels Good Don’t Do It!
2. 8 Biblical Reasons to Invest
3. Is Tithing Obsolete?
4. God Distributes Wealth Where He Sees Fit
5. Talent Management Tip: At Least Act With Interest

There is a train of thought that the Bible is not relevant as far as money matters are concerned. However, the Bible has a lot to say about money.  Furthermore, scripture encourages wise investment of our finances.  Following are eight specific scriptural reasons for profitably putting our money to work for us.

1. To Prepare for Lean Times6 Go to the ant, you sluggard!
   Consider her ways and be wise,
   7 Which, having no captain,
   Overseer or ruler,
   8 Provides her supplies in the summer,
   And gathers her food in the harvest. (Proverbs 6:6-8)
2. It’s Considered Lazy Not to!
   See Proverbs 6:6 above. The Bible does not have anything good to say about laziness! (Example: Proverbs 6:9-11) It is definitely a poor lifestyle!
3. To position yourself to receive God’s bounty
   20 “So he who had received five talents came and brought five other talents, saying, ‘Lord, you delivered to me five talents; look, I have gained five more talents besides them.’ 21 His lord said to him, ‘Well done, good and faithful servant; you were faithful over a few things, I will make you ruler over many things. Enter into the joy of your lord.’ (Matthew 25:20-21)God not only encourages investing but provides the funds to invest! He has a reward system in which His servants keep the proceeds, are promoted, and share in His best.
4. It Pleases God
   “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’ (Matthew 25:21, NIV) God truly delights in the prosperity of His servants. (Psalm 35:27)
5. It’s a Great testimony
   1 If you fully obey the LORD your God and carefully follow all his commands I give you today, the LORD your God will set you high above all the nations on earth. (Deuteronomy 28:1, NIV) The verses immediately following describe these Divine manifestations of prosperity.
6. A Chance to Do Good
   Therefore, to one who knows the right thing to do and does not do it, to him it is sin. (James 4:17, NASB)For one of the companies in which I am a stockholder, there was a proxy vote concerning a matter in which I thought was morally wrong. Through my vote, I was able to take a stand for righteousness.

   Additionally, if Christians increase their investments in businesses or, conversely, withdraw from other market segments; the Body of Christ can influence the marketplace (Proverbs 1:20).

7. Develop Trust in God
   For where your treasure is, there your heart will be also. (Matthew 6:21, NASB) If you make the Lord in charge of your finances, He TRULY is Lord. Your checkbook and your calendar will reflect your beliefs moreso than the words of your mouth. Do you really trust the Lord in your finances?
8. You Can’t NOT Invest
   Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap.(Galatians 6:7, KJV)Note that the above verse does not say “IF you sow … ” but “whatsoever …” you sow. The question is: in what (or, rather, whose) ground do you sow?  Money is definitely a “whatsoever” in this context.

So, have I omitted anything? If so, please let us know with your comments.

Related: The basics of investing

Related posts:

1. Biblical Privacy Advice: Cover Your Bank Door!
2. 5 Stock-Picking Tips From the Bible
3. Talent for Multiplying: Heavenly Returns
4. Talent Management Tip: At Least Act With Interest
5. Talent For Putting God’s Money to Work for You