by Sound Financial Strategies Group
Emerging Markets are an often overlooked area of investment. Clint Sorenson joined The Chase this week to talk about international investing with Chris McAlpin. Check it out below.
Article originally hosted and shared with permission by The Christian Economic Forum, a global network of leaders who join together to collaborate and introduce strategic ideas for the spread of God’s economic principles and the goodness of Jesus Christ. This article was from a collection of White Papers compiled for attendees of the CEF Global Event.
At CEF, we’re blessed to be a part of a community that challenges the status quo. This paper is significantly different than my two previous efforts.
This paper and my grandma’s decision prompt a critical question: Are churches and non-profit ministries the only way money can be used to build the kingdom of God? I chose a provocative title, but I am at least attempting to write with humility. There is much incredible kingdom work happening through traditional churches and traditional ministries that are worthy of capital. This paper and my grandmother’s decision are less about diminishing these forms of kingdom building and more about promoting an alternative route, one that is being increasingly represented by incredible members and businesses in the CEF community. Perhaps many of these are also worthy homes for kingdom-building capital. My grandmother certainly believed so, and in her final days, she put her treasure where she wanted her heart to be also, with the kingdom builders.
Here’s my tribute I shared at her funeral. [Elaine Elsberry]
How do you measure the value of a life well-lived?
In my grandmother’s obituary, one word stood out to me more than any other word…curiosity. Certain words have immense power and require thousands of others to explain. “Curious” is certainly one. Like Grandma, it brings a host of descriptors to mind. She was a tiny giant, open to learning something new for every one of her 35,000+ days. She had this uncanny, erudite way of using her curiosity to inspire and draw out your own.
Words hold no respect for the strong and mighty; her tiny, 90-pound frame could break down walls and destroy kingdoms. Words could transport her mind far beyond the stamina of her body. She could teleport with her mind as effortlessly as she could turn the next page of her book.
In a word, she was curious. And her tenacious curiosity made her a tireless force for good—yes, for worship. In ancient Jewish culture, the highest form of worship was knowledge. What more respect/honor could you give someone other than to learn everything about them? And if this is indeed God’s world, and each author ever to have put pen to paper is His child, then each word is a holy utterance—a fragment of a clue in the cosmic story God is constantly unveiling about Himself.
And Grandma drank deeply from this well.
She was insatiable—and darned if not more contagious than Covid.
I was one of the lucky ones to have caught her curiosity. Many others did, too.
Countless times she would throw out a thought, “What do you think God means by…” or, “Why do you suppose God allows….” I ache to remember those questions, to be surprised by the unveiling of a cosmic record with constant availability of those precious, finite, fleeting moments, made even more valuable by their expiration.
If you had the privilege of having one of those conversations with my grandma, you’d know that after careful reflection on the ensuing discussion, she would usually lean forward and say: “Well I suppose…” before delivering a powerful truth.
I guess I always knew it in my heart, but it took her death for me to realize that she was one of my favorite people in the world with whom to have a chat.
God, I wish for just one more of those conversations. Like a spoiled child, I took for granted the delicacies that I could have called upon at any moment, and yet too often did not.
I chose my words carefully around Grandma—not out of fear but out of respect. Each word holds meaning, and I could count on her to contemplate each one and assign value to it.
She upped my game. Her curiosity would often expose weak logic or unchiseled thoughts. Sometimes while talking with her, I would find myself outside of myself, examining my own thoughts, questioning their merit. I often would concede, “I guess I’m not sure,” after conversations with Grandma.
And it’s for this reason I suppose curiosity usually precedes humility. It’s hard not to be humble when you are constantly learning.
I threw some crazy ideas at her these last few years:
That God doesn’t only build His kingdom through church as we currently define it but wants to use business as well.
That 99% of our available wealth is invested in companies that care nothing for the kingdom of God, while we put what equates to a fraction of a penny into “the kingdom” through charitable investments.
That we largely let the US government dictate what constitutes a “kingdom-building” gift through its tax legislation.
And she was remarkably unfazed. She even cheered me on as I sought to help build a for-profit company that was committed to building the kingdom of God, showing up week after week after week to our company prayer time. And as an affront to the status quo, one last cannonball of curiosity, she did something many would consider scandalous. She struck out the traditional church from her will and penned in our for-profit company—one last big hug and encouragement from even beyond the grave. “I approve grandson. And I’m proud of you. Use that tenacious curiosity of your own to challenge the giants in front of you.”
This was an overwhelming thought to me. The most curious person I knew had dropped a fat stamp of approval on my own curiosity. These ideas my curiosity had led me to were more than ideas, they were worth the money she had reserved for the kingdom of God. And in her final days, she decided that LivFul (our company) was a better bet for growing the kingdom of God than her traditional church was.
This is no small thing, and while I tremble at the weight of the implication, I’m also glad for shoulders larger than mine who carry it (and us along with it).
I love you Grandma, and thanks to you, I have renewed strength to persist. You will forever be a part of me and my calling to demonstrate the building of the kingdom of God through business.
You are forever part of LivFul, and our legacy is surely yours as well.
I suppose my grandma threw down a bit of a gauntlet here. If you’re a business leader, the challenge is to make your business a worthy place for housing kingdom capital. Would you feel comfortable receiving a donation in lieu of it going to a church? If not, why not? I can assure you that there is no difference in how God views money entrusted to either…it’s clearly all His.
At LivFul, we don’t take this gift lightly. My grandma believed we could steward the money better than her church, and that’s quite the bar to live up to.
At the end of the parable of the talents, the man who had turned five into ten tried to give the money back to the master. “Thanks, but no thanks,” he said. “Please keep managing it for me.”
May we endeavor to build the kind of businesses that are so exemplary of the Kingdom of God that, when we try to hand the money back to God, He says the same. “You’re doing well! Keep stewarding this for me.”
Photo by John Schnobrich on Unsplash
by Bill and Dana Wichterman
Give someone a fish and they’ll eat for a day, but invest in a for-profit commercial fishery and their community could prosper and flourish for a lifetime. Well, that’s not exactly how the old proverb goes, but it’s no less true.
And that’s why we’re leaning into impact investing: it’s sustainable, dignifying, cures and prevents poverty, helps people flourish, heals broken cultures, and draws from a much larger pool of funding to have a bigger impact.
Philanthropy is important, and it’s often the only way to address a problem. When someone is hungry and in need of their next meal, giving them a fish is the best thing to do. But it usually doesn’t address the underlying cause of the hunger.
Plus, there is way more money available for impact investing than philanthropy. The average net worth of a family is around $100,000, whereas a tithing family will give just $10,000 annually. Harnessing the power of the liquid assets (in retirement and non-retirement vehicles) to intentionally invest according to biblical principles means the potential year-over-year impact of the investment dollars is far larger with a much longer tail.
Business is driven by two things: customers and shareholders. And in a sense, shareholders are more important because they also care about customers – without whom they won’t make money. Witness the power of shareholders shaping culture through ESG (Environmental, Social and Governance) investing, prompting businesses to behave far differently than if their sole concern were sales. With Christians managing more than $150 trillion, the power to shape culture is huge.
In the developing world, impact investing has far more potential to alleviate poverty and lead to human flourishing than charitable giving. Consider Sunshine Nuts in Mozambique. Founded by former Hershey Foods chocolate buyer Don Larson and his wife Terri, they are working to create a sustainable, for-profit cashew processing facility in one of the poorest countries in the world. They are providing good-paying jobs, training, and in a high-quality and safety-conscious factory shaping a culture of meritorious work for its employees and suppliers. The workers receive a small bonus every day they show up on time, upending the prevailing culture that undervalues timeliness. And Sunshine Nuts investors are betting on getting a decent return on their dollar so they can turn around and invest their appreciated capital in another start-up that has a redemptive mission.
The Sunshine Nuts employees probably don’t feel any gratitude to the company investors, because as far as they’re concerned, they’re trading their labor for their wages, giving them a sense of accomplishment and dignity that is absent when the poor are handed a fish. Work is a reward in itself since it’s one of the ways we reflect God’s image. Empowering the poor to earn their wages is ennobling in a way that charity just can’t be.
Impact investing can cure and prevent poverty in the first instance. Plus, wages create taxpayers, potential donors and investors. The unbending power of profits, deadlines, term sheets and spread sheets bring a real-world crucible to communities that government and philanthropic programs may lack. And it’s this market power that has the strength to straighten out twisted cultures (and all cultures need straightening to greater and lesser extents).
Impact investing is akin to the yet-to-be-invented perpetual motion machine that just keeps on going and going. But these machines need capital to be built in the first place. That’s where Christians come in.
We could seek a return-focused investment strategy without regard for the second bottom line, but why? If God wants to steward all our resources for His Kingdom, we shouldn’t ignore how we are making money. After having been challenged by Henry Kaestner and Greg Lernihan to use all of our resources in an intentional double-bottom line way, we’re systematically going through our portfolio, transitioning away from vehicles that have no regard for social and spiritual impact to those that do.
Admittedly, this requires effort – more effort than most busy people have time to expend. How can we vet all the companies in an index fund, much less a startup half-way around the world?
Thankfully, there is a movement in the Church to create organizations to do just that.
Praxis, Lion’s Den, Impact Foundation, Talanton, Eventide, Kingdom Advisors, and of course, Faith-Driven Investor are among the growing number of Christian-led organizations empowering Christians to unlock the potential of their capital to remake the world and lead to human flourishing. To us, it feels like a work of the Spirit blowing through the Church, and we couldn’t be more excited about it.
Abraham Kuyper, the Dutch Prime Minister 120 years ago, said, “There is not a square inch in the whole domain of our human existence over which Christ, who is Sovereign over all, does not cry: ‘Mine!’” This includes our money – and not just our tithe, but our investments, too.
Article originally posted here by Bill High
by Bill High
Retirement is a relatively new creation.
In the founding of America, it was expected that you’d work until your dying breath. Of course, some of this expectation was based upon shorter life expectancy.
As life expectancy grew, the reality grew that physical work would outpace the physical capacity to do that work. For instance, it wasn’t until 1889 that German Chancellor Bismarck introduced the modern idea of pensions, according to a Seattle Times article on retirement. A few year earlier, in 1875, American Express introduced America’s first employer-funded retirement plan, and in 1880 the Baltimore and Ohio Railroad followed suit. From there, private pensions grew.
The United States created Social Security in 1935 as a government-funded retirement system, followed by Medicare in 1965.
Perhaps unfortunately, retirement today is accepted as a matter of right. The idea of “saving for retirement” is commonplace. For many, age 65 is the magic number for retirement.
No doubt there are some realities of retirement. Some professions are better served by younger people—policemen, firemen, heavy construction. But perhaps it’s time to rethink retirement as a right and view it as an opportunity to contribute to the world in a different way.
For instance, the Bible only mentions retirement in Numbers 8.23-26. There, the Levites were to serve from age 25-50. After age 50, they could still serve their brothers by providing security for the tent of meeting. The necessity for retirement came from the fact that part of the work of the Levites required heavy lifting—a younger man’s job.
With retirement being a relatively new development, the question becomes, how best to steward those years? Is retirement meant to be a nonstop vacation?
I’ve heard the phrase, “Refire! Don’t retire…” (there’s now a book by that title, which I haven’t read). Retirement will look very different for each of us, but a clear vision and mission help to keep us focused on loving and serving others.
I imagine retirement as a focused season of blessing our families and our communities with all our resources (time, talent, treasure), even as abilities and resources change.
Along those lines, the late Bob Buford wrote Halftime (which I have read) and all the related resources that developed around the Halftime Institute. Buford sought to inspire middle-aged people to pause, reflect and plan to make the second half of their lives even more meaningful than the first.
And if reading a book is more than you want to bite off at the moment, Jeff Haanen wrote “Don’t Waste Your Retirement,” a great article posted on the Gospel Coalition blog.
So what do you think about the concept of retirement, and what are your plans for retirement?
[ Photo by Federico Giampieri on Unsplash ]
Photo by Jamie Street on Unsplash” >
Article originally posted here by Paradiem
by Eric Dunavant
February 5, 2018, the Dow Jones Industrial Average dropped 1,175 points to mark the worst one‑day drop in the history of the market.[1] It made all the headlines, but what really happened?
In reality, the market was down 4.6 percent.[2] Not fun, but within the realm of possibility of what one could expect on occasion. The challenge is, when we see headlines like this, we often misunderstand or are confused by what is actually happening versus what is being reported.
One of my favorite phrases is “surprise is the mother of panic.” When something happens that we never expected, we react in a way that could be detrimental to our long‑term outcomes. This is why knowing the typical volatility patterns is important.
Every day the market moves, but that doesn’t mean you need to take action. When you begin to understand the typical volatility of markets, it can set a framework giving you the ability to ignore the noise and operate from a place of peace; knowing you are exactly where you should be for your long‑term perspective. As Mark Twain once said, “History doesn’t repeat itself, but it rhymes.”
The first thing you need to know is the word “correction.” It is defined as a drop in the market of 10 percent or more.[3]
The talking heads in the media will focus on the market being down, but it might only be down seven percent. Once the drop exceeds 10% the hysteria usually increases, because now they can add the word “correction” in the headline to scare people even more.
What they fail to tell you is that corrections are very common. They happen about once a year.[4] As a matter of fact, the average intra‑year correction for the stock market over the last 30 years is 14 percent.[5] And, 74 percent of years end positively.[6]
Just because the market is in a correction doesn’t mean that you need to do anything. It means the market is behaving as it has almost every year.
The second word you need to know is “bear.” A bear market is defined by a drop of 20 percent.[7] Typically, a bear market will occur in about one out of every five years.[8] The challenge is getting the media to agree when a bear market has occurred, especially if it doesn’t serve their headlines.
Many people are reporting that we haven’t had a bear market since 2008. It really depends on what story you want to believe. The market was down more than 20 percent for large companies back in December of 2018[9], and small companies and international companies have experienced two to three bears over the last 10 years.
The reason the talking heads continue to say we haven’t had a bear market, is because the market didn’t close more than 20 percent down. It was more than 20 percent down during the day, but when the final bell rang it was only down 19.8 percent.[10] It serves their fear inducing headlines to say we haven’t had a bear market. The pain of that 20 percent drop was a very real event to everyone. Instead of looking for the next big drop, consider that the bear market you’ve been told to expect already happened in 2018.
The third thing to understand is, no matter how uncomfortable a correction or a bear market may be, to succeed, you must survive them. The headlines are trying to get you to take action, action that may ultimately be detrimental to your long‑term plan. My favorite phrase when it comes to investing is, “Don’t just do something, sit there.” In the middle of scary headlines, in the middle of extra volatility, the tendency is to feel like you need to do something.
Over the last 30 years, there have been eight bear markets. Five of them started, found their bottom, and began their climb back in less than five months. The last two bear markets have recovered all of their losses in a year or less.[11]
The challenge with trying to avoid a bear market is you don’t make one decision, you make two. You decide when to get out, and then you decide when to get back in. I have yet to see any individual or any professional organization consistently get this right. Most investors get this wrong and it costs them growth in their investments.
As much as it feels like action would be the best, the statistics and the reality show, the best investors achieve success by riding the volatility out until it passes.
When I came home from school as a young kid, I would turn on afternoon TV. They always had those public service announcements that ended with the phrase, “The More You Know.” I believe the more you know about volatility, the better an investor you will become.
You will be in a better position to make decisions for the long term, knowing that you own stock in high‑quality companies in America and around the world. You can have confidence that these companies are managing themselves for long term profits, and the daily volatility of the markets has nothing to do with the long-term strategies these companies are using to grow their business. Do yourself a favor and ignore the daily news.
At Paradiem, we hate “investing” and think you should too! We are not just investors; we are OWNERS and we believe WHAT you own and WHY you own it is a much more important consideration. If you would like more information on the importance of understanding what you OWN, email info@paradiem.org with the subject “Ownership” or give us a call at (985) 727-0770.
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[2] https://money.cnn.com/2018/02/05/investing/stock-market-today-dow-jones/index.html
[3] https://www.investopedia.com/terms/c/correction.asp
[4] https://www.fool.com/knowledge-center/6-things-you-should-know-about-a-stock-market-corr.aspx
[6] https://www.icmarc.org/prebuilt/apps/downloadDoc.asp
[7] https://www.investopedia.com/terms/b/bearmarket.asp
[8] https://www.aaii.com/journal/article/stock-market-retreats-and-recoveries
[9] https://www.cnbc.com/2018/12/31/stock-market-wall-street-stocks-eye-us-china-trade-talks.html
[10] https://www.investopedia.com/a-history-of-bear-markets-4582652
[11] https://www.macrotrends.net/2324/sp-500-historical-chart-data
by Tony Chen
As a serial tech entrepreneur, I love the process of pivoting/iterating the next version of a potential product every 5 weeks. As an emerging fund manager, I received some great advice from a friend who’d transitioned into VC, “Yes, you can iterate on funds. But instead of 5 weeks, it might take 5 years.”
That motivated me to learn from experienced investors who’ve iterated. We asked them: what drives outcomes in early-stage ventures in Africa? We interviewed 100+ Africa-centric entrepreneurs, investors, and LPs, took 900+ pages of notes, and synthesized our findings. We just released the resulting report: Chasing Outliers: Why Context Matters for Early-Stage Investing in Africa. Here’s a summary of what we learned.
Silicon Valley venture capital is largely a mismatch for most African ventures. The VC model works when the context has these critical ingredients: huge markets, high lifetime value of customers, efficient infrastructure to capture and retain customers cheaply, and plentiful investors at every stage of the business lifecycle. In most African markets (and actually in most markets globally), very few of those ingredients are present. Context matters.
Another important contextual element is time horizon. Things often take longer in Africa (and many emerging markets). Exogenous shocks — a shaky transition of power, a drought, a new head-scratcher regulation — are frequent. Relationships and trust take time to build. Also, an entrepreneur trying to solve problem A realizes she can’t unless she also solves problems B & C. How do you create the “Amazon of Africa” if there aren’t addresses? How do you loan money if there isn’t such a thing as credit scores? These foundational problems — reframed — are massive opportunities. Investors willing to look deeper into the context will be rewarded. But most overestimate what can be done in five years, and underestimate what can be done in 15.
Venture capital is like a race car. With smooth, straight roads, good weather, and a pit crew, you can get places fast. It’s a beautiful vehicle designed for a very specific purpose under very specific circumstances. But too often, too many have copy-and-pasted it into other arenas too widely.
Nonetheless, we are quite encouraged by the entrepreneurs and investors who are innovating within these realities. One fund’s primary investment thesis was companies that solve those “problems B & C” — reducing the friction of doing business. Some are innovating around fund structure and instruments used. Some are innovating how due diligence is done so that smaller $50-500k checks can be written in more sustainable ways. Some agri entrepreneurs are pursuing end-to-end vertical integration to build unique moats. I’m not surprised and excited to see that the early-to-growth stage African funds here at Faith Driven are utilizing innovative structures (e.g. Talanton and Future Africa). A significant new wave of entrepreneurs and investors will succeed massively in Africa, as they respect context, think longer-term, innovate in the right sequence, build great teams, and execute with resilience.
[ Photo by Ono Kosuki from Pexels ]
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