My writing

Reflections on the Stock Market and China

I haven’t followed the stock market much, recently, but after my mother died, part of the inheritance she left us was in the form of stocks. So, I’ve been checking things out as we’ve been dealing with those stocks and consolidating our retirement savings with our broker. (I like my broker a lot.) There are a lot of factors to consider when buying stocks that relate to your temperament and our broker has gone through a lot of discussions with us so that he can help find the right investments for us. One of the issues I’m concerned about, and it isn’t always easy relaying this concern to a stockbroker, is socially responsible investing. I’m not going to get into the details of that, but the inked articles can give you more understanding of that topic. There are some really strong mutual funds, Morningstar 5-star funds even, that follow socially responsible patterns of investing, so you won’t lose a whole lot doing that.

The biggest cloud hanging over the market right now is the issue of a US and China trade agreement. The most well-known barometer of the stock market is the Dow Jones average. The Dow will swing a couple hundred points up or down each day depending on what the rumors are about the trade talks. The other day was a particularly bad day for the market because a number of Chinese companies were blacklisted. While I don’t understand the whole story, these companies were blacklisted because they came from, perhaps even participated in, oppressing the Muslim minority in those provinces in the west.

Given China’s history on human rights, the fact that they are oppressing a religious minority shouldn’t surprise anyone. They continue to persecute Christians and members of the Falung Gong as well as Muslims. They put down a movement toward freedom at Tianammen Square a number of years ago and are cracking down on a similar movement in Hong Kong. What kind of reach do they have in their anti-freedom agenda, look no further than the NBA which has removed fans from the stands for supporting a free Hong Kong. Of course, this came after after Chinahad cut ties with the NBA because a member of one team’s executive staff tweeted that he stood with the Hong Kong protestors in seeking freedom. China has a lot of economic strength and they’re willing to flex their muscles to get their way and, in the past, US businessmen bowed to the Chinese because of the desire for trade.

If the above isn’t bad enough, let’s not forget that they use slave labor and infringe on copyrights and trademarks, and other issues of intellectual property as naturally as breathing. Because of their cheap/slave labor they can flood the market with cheap goods. They can even take a loss on some of those sales because they’re able to manipulate currency and end up earning money.

China has a weak spot in their economy, though, that wasn’t visible until the recent trade war. They have two economies: one for export and one for internal issues. The economy for the people of China is stagnant because no one has any money to buy things. What keeps China afloat is their export market. As their ability to export drops, less trade means less money to prop up the failed communist regime. That’s why I believe we’re seeing the Chinese trade negotiators responding so vehemently to any perceived slight. They know they can affect the various stock markets and hope that their threats will bring the US and other nations into their line before they have to fall to their knees and accept the US proposals.

Which brings us back to the beginning: the stock market. I can guarantee you that the market will take on a long, steady, downward drift if we don’t make peace with China in this trade war. But I think it’s worth it so we avoid a tacit approval of China’s evil practices. True, my stocks will go down, but it’s a price we need to be willing to pay to force China to trade fairly and treat their citizens appropriately. This is a trade war we can’t afford to lose.

EDIT: Case in point – I woke up to read this article. NBA takes mic away from reporter for asking about China

Daily Work, personal

Is Ramsey As Good or Bad as People Say? (Part Two)

The second part of Dr. Barrett-Fox’s critique of Dave Ramsey deals with issues of faith. She notes that Ramsey stresses personal responsibility when making financial decisions at an everyday level, but also points out that if he were consistent, he wouldn’t dismiss socially responsible investing. 

“But he also doesn’t ask you to be responsible for anything beyond your own financial situation. For example, he is pretty condescending about and dismissive of socially responsible investing (the idea that your investments should align with your values).”

She quotes from Ramsey and provides Ramsey’s exact words in the link from her article. Ramsey seems to be saying that 1) it’s too hard to track every part of your investment and 2) when you buy stock in a company, you aren’t handing the company a check, you’re paying the guy who had it before you – unless you buy in an initial public offering. Dr. Barrett-Fox makes an excellent point that by buying the stock, you do support the company and she borrowed from Ramsey’s example of buying a used car: Ramsey said that the original car company doesn’t get any of that money; Dr. Barrett-Fox pointed out that by keeping the resale value high, you support the company. She also noted that there are people who track their money and keep track of where they shop . 

While she exposed a weakness, a contradiction actually, in Ramsey’s philosophy of responsibility, it’s hard to do values investing when using mutual funds. As Christians, we can be diametrically opposed on critical values issues. Just to give one example, while many Christians oppose abortion, many Christians support it. If you’re opposed to abortion, you’d have to be concerned about stocks that might aid or abet abortion. Even if the company doesn’t participate in providing supplies for abortion, what if their company charities allow employees to support abortion providers. Meanwhile, if you support abortion, you could easily invest in a company that provides equipment or support for abortion, but they might also povide the drugs for states that do executions by lethal injection. 

SmartAsset described the dilemma this way:

It isn’t always easy to determine which investments are strictly socially responsible. For instance, a company could practice ethical manufacturing processes, only to dispose of waste in an irresponsible way. Some companies boast that they support female empowerment, but don’t have any women on their board. It’s important to do your homework to be sure you’re investing in actually socially responsible institutions.”

I should add that the article I just referenced does contain the names of some mutual funds that practice socially responsible investing, so read the article and check them out. I guess that means I want you to be responsible for your investments.  

I should add that this quote from Dr. Barrett-Fox really slams home her point:

“So I see Ramsey preaching personal responsibility when it comes to how your financial decisions impact your life but not when it comes to how your financial decisions impact the larger world. I think Christians should have a broader vision.”

The next thing Dr. Barrett-Fox deals with is Ramsey’s materialism. 

Ramsey … likes what money does for him and is well-known for his massive house and car collection. He isn’t a critic of having too much.

He points out during his teaching that there’s nothing wrong with having stuff, as long as you pay cash for it. However, in railing against the materialism of a society that needs everything now, so put it on credit, he fails to ask himself the question “How much is enough?” Is materialism acceptable if you pay cash? 

In a society where materialism is based on credit, is it enough to say, “Oh no, don’t put things on credit; use cash,” or do we need to reject the accumulative ideology of the world and seek ways to live more simply and use cash to help others? I believe Dr. Barrett-Fox would say that we should live more simply and help others. Ramsey would say we shouldn’t deny ourselves, but we should also give to help others. D. Barrett-Fox recommends a book to think about how that question should be answered. “For a perspective on how to live with joy with what you have, I recommend More than Enough: Living Abundantly in a Culture of Excess.”

Dr. Barrett- Fox keys in on one of Ramsey’s pet phrases: “Live like no one else so that later you can live like no one else.”

One of his favorite slogans is “Live like no one else so later you can live like no one else.” This seems to me to be a paraphrase of Luke 12:13-21, in which a man saves us his riches and then is able to relax and “eat, drink, and be merry.” For a Christian, I think, the purpose of money shouldn’t be to store it up now for later; it should be to use it now for what you value and use it later for what you value. For Christians, this should be to care for others and creation.

To be fair to Ramsey, in his climactic lesson, he changes that to “Live like no one else so that later you can GIVE like no one else.” That being said, this attitude of Ramsey’s concerns me. Not that we should live more simply, which is what he means when he uses that phrase, but that giving should be delayed. We read stories occasionally of people that you would least expect leaving millions dollars to various charities. That kind of gift makes a big impact, but any charity that depends on such big gifts will soon die. Charities must depend on the small, regular gifts that come in every month. This is the major adjustment my wife and I have made to Ramsey’s system. We find ways to give to people in need and important causes now. We get great joy out of doing it and being able to do it. 

I don’t mention that to have you say anything about me, but to remind you that one of the perks of being debt free is that you have more freedom to give to support other causes and people right now. 

The only quibble I have with Dr. Barrett-Fox in part 2 of her critique comes from this comment: 

I also find him very insensitive to poor people. Ramsey encourages people to pare down their expenses, even if it means “beans and rice, beans and rice”–that is, even if they have to eat the food of the world’s poor. Simple, low-cost meals are considered to be a punishment for your past financial sins or a sacrifice for your future wealth.

I think Ramsey understands poverty to a degree, having gone through it himself. His encouragement to eat beans and rice isn’t a punishment for past financial sins so much as it’s a call to do whatever you have to do to get out of debt. He would say that if someone was willing to do that, they were serious about getting their financial house in order.

Dr. Barrett-Fox and I have differing views on the effectiveness of the Ramsey program for getting out of debt, but I think we both agree that we should do our best to keep our financial house in order. She’s studied many different systems, including Ramsey’s, and can point you to different approaches that may work for you. ‘Ve worked the Ramsey system and I can tell you that when it comes to finances, it’s been the absolute best thing for me. 

But once you get out of debt, now what? I think Dr. Barrett-Fox and I would think along similar lines that we should think about a simpler life so that we can use the financial blessings we receive from God to help others. As she so wisely pointed out earlier, God doesn’t call us to store up wealth so that we can indulge ourselves, instead, He gives it to us so that we can help others. 

My pastor told a story tonight of a scholar who was asked what he might say to God when he got to heaven. His response is stunning. He said that he’d look around and say, “If I had realized how beautiful it was up here, I’d have made a bigger investment in the place.” Choose your investments wisely.