## Community development investing is one way that faith-based investors can use their investments to make a real impact on the communities where they live and work. 

Investing in community development finance institutions provides aspiring entrepreneurs with the resources they need to launch businesses and services that many underserved, low-income and minority communities might be lacking. Since generally CDFIs and borrowers are members of the community, they have a better understanding of what would benefit the community than an outsider might. This makes it easier for the most critical needs to be met in the communities where they are based.

The COVID-19 pandemic exposed some of the unique challenges faced by Black, indigenous and entrepreneurs of color in underserved rural and urban areas when it comes to access to capital. This capital is the funding necessary to operate and grow these entrepreneurs’ small businesses. The uneven access to the federal government’s Paycheck Protection Program (PPP) loans and other emergency financial assistance highlighted a clear funding gap that traditional banks have not filled.

To meet these needs, some borrowers have turned to alternative sources of capital such CDFIs, Community Development Credit Unions, community loan funds and other non-predatory lenders who have proven that they can creatively and efficiently deploy capital, tailored technical assistance and other support systems to help them recover, thrive and grow. 

## Post-COVID pressures continue

As small businesses — particularly those in underserved, minority and low-income communities — have slowly emerged from the COVID-19 winter, the reality of rising inflation has brought new concerns, but these concerns come without the COVID relief valves available at the height of the crisis.

Many businesses that took big hits during that time now face three major concerns: First, they must grapple with increasing interest rates and the resulting higher costs of borrowing. Second, mounting fears of reduced consumer spending arise as customers adjust to lower disposable incomes due to increased costs of living. Finally, these small businesses face hiring challenges due to the continuing tight job market, when all businesses are fighting to retain employees.

## Investors can be part of the solution

It is no surprise that impact investors are particularly interested in small businesses that are important drivers of the economy. These small businesses support neighborhoods and communities by creating meaningful jobs and driving innovation and competition. 

Through investments in CDFIs, investors can support mission-driven alternative lenders that help maintain momentum in the recovery of diverse and low-income entrepreneurs. These institutions are nimble and innovative in reaching minority communities in a way traditional lenders are not. Located in the communities where their borrowers are, these lenders offer funding for businesses and services that are critical to the local community, such as loans to support new affordable housing initiatives, increased access to health care and access to clean water. 

A simple way for individuals or institutions to support businesses in underserved and underrepresented communities is to identify investment products that channel a portion of assets to CDI. For example, at [Praxis Mutual Funds®](https://www.praxismutualfunds.com/?utm_campaign=cdi-all&utm_source=text&utm_medium=press-release&utm_content=want-to-work-towards-a-more-equitable-and-inclusive-economy?&utm_term=praxis-mutual-funds), a fund family of Everence®, we invest 1% of our managed assets to investments in Calvert Impact Capital, an impact-investing institution that helps people across the country and around the world.

## Closing thoughts

CDFIs have what it takes to address financial inclusion at scale despite their challenges. They have processes in place to mitigate risk and can deliver capital in a more cost-efficient way, making it a win-win for the investors and the borrowers. Investing in CDFIs can help move us closer to a more equitable and inclusive economy.

~~~~
Praxis Mutual Funds are advised by Everence Capital Management and distributed through Foreside Financial Services, LLC, member FINRA. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.
*Consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. The fund’s prospectus and summary prospectus contain this and other information. Call 800-977-2947 or visit praxismutualfunds.com for a prospectus, which you should read carefully before you invest.*

Praxis Mutual Funds has a rich history as a leading faith-based family of mutual funds designed to help people integrate their finances with their values. With Praxis,your investments can make a difference for you, and the world around you.

Praxis Mutual Funds

Articles

Want to work towards a more equitable and inclusive economy?

## From a big-picture perspective, the best uses of money are those that are aligned with and an expression of our values. That’s why, as Christians, we make giving our first financial priority. “Firstfruits” generosity ([Proverbs 3:9](https://biblia.com/bible/niv/Prov%203.9)) is about giving the first and best portion of all we receive back to God.

Scripture helps us express God-honoring values in other areas of our financial lives too, instructing us to maintain a reserve ([Proverbs 21:20](https://biblia.com/bible/niv/Prov%2021.20)), build wealth slowly ([Proverbs 21:5](https://biblia.com/bible/niv/Prov%2021.5)), and avoid what it describes as the bondage of debt ([Proverbs 22:7](https://biblia.com/bible/niv/Prov%2022.7)).

But what about our spending? For example, what about our housing decisions? Since this is typically the largest expense for most people, it’s important to avoid overspending on a home. However, there’s more to it than that. There are aspects to this decision that transcend calculators and spreadsheets.

## Coming into alignment

That point was powerfully brought to life in [a blog post](https://www.sahilbloom.com/newsletter/harsh-truths-that-will-change-your-life) by venture capitalist and entrepreneur Sahil Bloom. He recalled a conversation with a friend that Bloom said changed his life. Living in California at the time, Bloom lamented about how far away his family was from his parents and sister in Boston. The friend asked how old his parents were and how often he saw them. Bloom replied that they were in their mid-60s and he saw them about once a year. Bloom’s friend did some quick calculating and said, “Okay, so you’ll see them 15 more times in your life.” The remark hit Bloom like a "gut punch.”

“It sounds insensitive — but it’s just…math. If the average life expectancy is ~80 years, my parents are in their mid-60s, and I see them one time per year, the math — however depressing — says I will see them 15 more times before they are gone.”

The morning after that conversation, Bloom had a candid talk with his wife about what they wanted in life. That set in motion a decision to sell their house and move east. Now, almost a year later, he said it’s the best decision they ever made.

“I’ll never regret these tiny moments — of doing nothing in particular — that we’ll get to spend together in the years ahead. I’ll never regret the moments my parents get to spend with my son.”

Think of *your* loved ones and do the math. How many more times are you likely to see them? Is that okay with you? Is there a decision — financial or otherwise — that would enable you to see them more?

## Wide-ranging implications

Of course, this has to do with more than just our housing decisions. I’ve written before about my mother- and father-in-law, Barb and Ken. Not long after my wife and I got married, we established an annual summer tradition of renting a lake house for a week with them and one of my wife’s brothers and his family. We were supposed to split the cost of the rental house three ways, but early on Barb and Ken began subsidizing those trips. They knew we were in a high-cost phase of life with young kids and I think they never wanted money to get in the way of us coming on the trip. As a result of those vacations, we all saw each other more often than we would have otherwise and we made wonderful, lasting memories.

The winter when Ken passed away, he told us from his hospital bed that they insisted on paying for *all* of that year’s trip. He knew he was unlikely to be there, but he wanted to make sure the rest of us would still go. Even though my mother-in-law has also since passed away, the summer lake house tradition continues and now includes my wife’s other brother and his wife. As our kids get older, we’re intent on keeping the tradition alive, even if that means subsidizing the trips.

## What matters most

When Jesus was asked to name the greatest commandment, He said, *“‘Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments”* ([Matthew 22:37-40](https://biblia.com/bible/niv/Matt%2022.37-40)).

Love God and people. That’s the compass that points toward a God-glorifying life — and toward the best uses of money. There are no calculators or three-step plans that can tell us how that teaching translates into specific choices. But as we make all manner of financial decisions — from where to live to how to vacation — it’s a question worth considering: which choice will best enable us to love God and people well?

*[Image](https://dcktxkaneetr8.cloudfront.net/2022/10/editorial-15-more-times-HD.jpg) used with permission. *

Since 1990, do-it-yourself Christian investors have relied on SMI for proven strategies and trustworthy guidance.

Sound Mind Investing

Faith and Finance

From a big-picture perspective, the best uses of money are those that are aligned with and an expression of our values.

15 More Times

## Most of us make money by working a job, but there is another way to make money — and that’s by putting *money itself* to work. Getting your money to earn *more* money is crucial if you’re going to build a nest egg for the future. 

There are five basic things you can do with money. 1) You can earn it, 2) live on it, 3) give some away, 4) owe it to someone (or a business or  government) and 5) you can grow it for the future.

## This article will focus on the last one: growing your money. 

The run-up in inflation that we’ve seen over the past year-and-a-half makes it clear that finding ways to grow your money is essential. If you put money in the bank and earn a 1% or 2% annual return while inflation is running at 7% or 8% annually, you’re falling behind— way behind.

Inflation means that the money you put in the bank will have significantly less purchasing power when you take it out than when you put it in. That’s why it’s so important to increase the growth rate of your money, to try to keep up with, or in the best possible case, to outpace inflation.

There are many options to do that, but each calls for investing your money in some way. The safest approach right now would be to invest in government I-bonds. The “I” stands for inflation. These bonds, guaranteed by the U-S government, are designed to keep pace with inflation. 

Unfortunately, I bonds carry restrictions, such as a $10,000 per-person limit on how much you can invest each year. Further, you can’t hold I bonds in a retirement account such as an IRA or a company-sponsored 401(k) plan.

## So, to get your money growing to match or beat inflation, you have to go beyond super-safe I bonds and look to investments that grow with the economy.

For most people, investing in the stock market is the easiest way to do this. That scares some people. After all, stocks can go down as well as up, but to get your money to grow requires you to take some risk.

The good news is that you can minimize the risk of investing in stocks if you spread your money across many companies and stay invested for a long time. Being broadly invested and staying the course over a long time are two key ways of reducing risk.

The easiest way to broadly invest is to hold mutual funds that contain shares of many companies. Some funds hold the stock of hundreds of companies and those funds have tended to do quite well over time.

Of course, no one knows the future. This year has been a tough one for the market so far. Next year could be terrific, or it could be worse. We don’t know. But history tells us that those who invest broadly and steadily over a long time almost always come out ahead.

## As your investments grow over time, the earnings on them can purchase more shares. Those new shares will grow and allow you to purchase *still more* shares.

This “compounding” growth is what helps keep you up with—  or outpace inflation. The effect of compounding, given enough time, is remarkable. It can turn relatively modest investments of thousands of dollars a year into millions over a few decades. That’s why compound interest is often called the “8th Wonder of the World.”

This is not without danger, however. Investing can foster bad things in your life, such as greed when the investment markets are performing well and fear when they’re not. As a Christian investor, you need to be on your guard. Don’t let greed and fear take over. Instead, seek to be a wise and faithful steward who takes a reasonable amount of risk to prepare for future needs.

It’s possible to take excessive risk with your investments. Proverbs 13:11 warns, *“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”* It’s also possible to take too little risk, which likely will result in you not being financially prepared for your later years. 

As a steward of what belongs to God, it’s your role to find the right balance as you seek to put your money to work and make it grow. 

You can also __[listen](https://www.moneywise.org/search?q=Putting%20Your%20Money%20to%20Work&videos=true&articles=true&podcasts=true&posts=true&groups=true&events=true&support=true)__ to the related podcast on this topic.

Biblical Wisdom For Your Financial Journey

MoneyWise

Most of us make money by working a job, but there is another way to make money — by putting money itself to work.

Putting Your Money to Work

A cognitive bias is a “systematic error in thinking that affects one’s decisions and judgments.” Researchers in psychology have cataloged nearly 200 such biases(!), but we’ll focus on five that regularly affect investors and explain how SMI’s investing approach can help you overcome them.

### __1. Loss Aversion__

Everyone is “averse” to suffering financial losses! But the loss aversion bias means more than that. It means that losing money packs such a powerful emotional punch that we have difficulty assessing losses objectively.

Research suggests that people feel the emotional pain of losses much more acutely than the pleasure of gains. As Dan Ariely and Jeff Kreisler [put it](https://soundmindinvesting.com/articles/view/how-we-misthink-money) in their book *Dollars and Sense*, “We feel the pain of losing $10 about twice as strongly as the pleasure of winning $10.”

The authors note that loss aversion can prompt investors to “sell winning stocks too quickly — we don’t want to lose those gains — and keep losing ones too long — because we don’t want to realize the loss.”

SMI’s approach to investing, in which sell (and buy) decisions are guided by a non-emotional process, acts as a counterweight to the loss aversion bias. By taking cues from data-driven momentum signals, SMI investors avoid selling too quickly or hanging on too long.

### 2. Anchoring

The anchoring effect describes the tendency to “anchor” one’s thoughts to a reference point, even if the reference point has no logical relevance to the decision at hand. Anchoring often emphasizes initial information, with the first input becoming a point of comparison for all subsequent inputs.

If you’ve ever been to an auction, you’ve seen anchoring at work. The auctioneer first describes the item and then might say, “Who will open the bidding at $500?” $500 may be a figure with no particular basis, but it becomes the anchor in bidders’ minds. They will assume the item must be worth at least $500 if that is the starting price.

In investing terms, the purchase price of an investment becomes an anchor. Subsequent decisions related to that investment, especially concerning selling, will be influenced by that initial price. Because of anchoring, many investors will hold on to an unprofitable investment for too long. They can’t bring themselves to sell until it gets back to its “starting” price.

SMI’s active strategies counteract the anchoring effect by employing a clear selling discipline. (The active strategies include Fund Upgrading, Dynamic Asset Allocation, and Sector Rotation.) In Upgrading, for example, when a recommended fund drops out of the top 25% of its peer group, we replace it — no matter the starting point. When the performance numbers tell us it’s time to move on, we move on.

### 3. Recency Effect

People tend to give greater weight to recent information than to information received earlier. This is why attorneys carefully hone their closing argument before jury deliberations begin. Those final remarks likely will carry more weight with jurors than hours of detailed testimony.

In investing, recency bias leads investors to focus too much on “what’s happening now.” Bear market rallies provide a good example. The bounce off a recent low can quickly persuade investors that the worst is over and that a new bull market is underway, despite broader evidence (such as longer-term trends or underlying patterns of weakness) that may suggest otherwise.

SMI’s process takes “what’s happening now” into account, of course, but in the context of a larger momentum-based framework that helps our members resist the siren song of the recency effect.

### 4. Confirmation Bias

This describes the tendency to seek out — and give weight to — information that confirms an already established outlook while disregarding information to the contrary.

For example, an investor convinced that cryptocurrencies are headed for the stratosphere will look for pro-crypto articles and minimize crypto-related setbacks. In contrast, one who thinks cryptocurrencies are a disaster waiting to happen likely will seize on every bit of negative information as a confirmation of his anti-crypto viewpoint.

At SMI, we help you avoid confirmation bias by providing [balanced and wide-ranging information](https://soundmindinvesting.com/articles/view/the-importance-of-knowing-what-we-dont-know1) — on everything from [alternative investments](https://soundmindinvesting.com/articles/view/thinking-beyond-stocks-and-bonds) to [Federal Reserve policy](https://soundmindinvesting.com/articles/view/market-risks-rise-as-fed-joins-battle-against-inflation). And although we are committed to our trend-following strategies and believe them to be effective over the long term, we never hide that our strategies sometimes struggle because of trend reversals or because a trend has yet to take hold. We provide regular [performance updates](https://soundmindinvesting.com/articles/view/mid-year-review-smi-strong-through-first-six-months-of-the-bear) so you can gauge how our strategies, and the stock and bond markets in general, are performing over various periods.

### 5. Overconfidence Bias

If you’ve ever run into someone claiming to be a terrific market timer or who insists a particular investment is a “sure thing,” you have seen overconfidence bias in action. Overconfidence leads people to believe they know more than they do.

Because markets are unpredictable, investors must be humble. Investing involves [dealing with probabilities](https://www.moneywise.org/sound-mind-investing/making-the-right-investing-decisions-in-2021-and-beyond-2059), not banking on certainties.

Of course, humility isn’t just an investing virtue. It is a *Christian* virtue. As believers, we are to be humble before God but also humble in our general outlook on life. We recognize that we are finite creatures, prone to faulty understandings and errors in judgment.

Still, God calls each of us to be faithful stewards, so we must have [an *appropriate* level of confidence](https://soundmindinvesting.com/articles/view/how-to-write-an-investment-plan1) in the investing area. We should not be overconfident, but neither should we be paralyzed with fear.

To that end, SMI helps you learn what you need to know about investing. We provide a non-emotional, rules-based approach — along with [practical tools](https://soundmindinvesting.com/resources) — to equip you to invest rationally and wisely.

*[Image](https://dcktxkaneetr8.cloudfront.net/2022/09/l3-cognitive-bias-HD.jpg) used with permission.*

Investing

A cognitive bias is a “systematic error in thinking that affects one’s decisions and judgments.” Let's overcome it...

Overcoming Common “Cognitive Biases” In Investing

Margin with your money can be either good or bad. Rob West explains the dangers of using margin while investing, specifically borrowing from the broker to purchase stock.

The MoneyWise Minute is a great way to be reminded of God's financial principles with actionable items you can easily apply to your daily life.

MoneyWise Minute

Margin with your money can be either good or bad. Rob West explains the dangers of using margin while investing, specifically borrowing from the broker to purchase stock.

The Perils of Margin Investing

Proverbs 27:23 tells us, “Know well the condition of your flocks, and give attention to your herds.” Our “herds and flocks” these days are our finances, including our investments. Do you know the condition of yours? We’ll talk about that today with Cassie Laymon.
Cassie Laymon is president of LightPoint Portfolios, an underwriter of this program. She’s also a Certified Financial Planner and a Certified Kingdom Advisor. 
<ul><li>On this program Laymon shares her journey in learning about faith-best investing and what led LightPoint Portfolios to start working with company and church retirement plans.</li><li>Laymon details the most common advice she gives to participants about investing for the future, including the importance of taking advantage of matching funds from your employer. </li><li>Most Americans have a bulk of their savings in an employer-sponsored plans, LightPoint recognized the need for a 401(k) and a 403(b) platform that would provide Christian companies, churches and other groups, as well as their employees, the opportunity to align their retirement assets with their deeply held faith values. </li><li>She explains how that works and offers the advice she gives to business owners about saving and investing and how best to help their employees save for the future. </li><li>Laymon says that many of the people who oversee retirement plans (plan sponsors) don’t realize that it’s best-practice to benchmark their plan every three years. That includes doing a fee analysis. With that in mind, LightPoint offers a complimentary objective analysis of your company’s current plan to see where there might be opportunities for improvement and to make sure you’re clear about the fees you’re paying. </li><li>She also explains what a participant can do if they want to invest in faith-based funds but find that they’re not available in their retirement plan.</li><li>To learn more about LightPoint, visit <a href="https://www.lightpointportfoliosolutions.com/">LightPointPortfolioSolutions.com</a>.</li></ul>On this program, Rob also answers listener questions: 
<ul><li>How do you know when it’s time to get out of the market? </li><li>What is the best way to establish a retirement plan with limited savings? </li></ul>Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to <a href="mailto:questions@moneywise.org">Questions@MoneyWise.org</a>. Also, visit our website at <a href="http://moneywise.org/">MoneyWise.org</a> where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.

MoneyWise is a daily radio ministry of MoneyWise Media. Hosted by Rob West and Steve Moore, the program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

MoneyWise with Rob West

Proverbs 27:23 tells us, “Know well the condition of your flocks, and give attention to your herds.” ﻿Our “herds and flocks” these days are our finances including our investments. Do you know the condition of yours? Rob talks with Cassie Laymon first.

Faith Based Investing in Retirement Plans With Cassie Laymon

Proverbs 27:23 tells us, “Know well the condition of your flocks, and give attention to your herds.” Our “herds and flocks” these days are our finances, including our investments. Do you know the condition of yours? On this episode, we talk with Cassie Laymon about a way to ensure your investments honor the Lord. This is MoneyWise Live - biblical wisdom for your financial decisions.Cassie Laymon joins us for the first time. She’s president of LightPoint Portfolios, an underwriter of this program. She’s also a Certified Financial Planner and a Certified Kingdom Advisor. Cassie and Rob cover these topics and questions:<ul><li>We talk a lot about faith-based investing and you have a unique way for folks to honor God with their investments. But let’s start with you, tell us a little bit about who you are and what you do?</li><li>You have an interesting story about how you personally got into faith-based investing and have even written a book about your journey. Tell us about that.</li><li>What led you at LightPoint Portfolios to start working with company and church retirement plans?</li><li>What common advice do you give participants about saving in their retirement plan?</li><li>What advice do you give to business owners about helping their employees save for the future?</li><li>What if a person wants to invest in faith-based funds but they simply aren’t available in their retirement plan? What can they do?</li><li>For those who are just hearing about faith based investing for the first time, describe how it differs from traditional investments?</li><li>How can our listeners find you folks to learn more? <a href="https://www.lightpointportfoliosolutions.com/">LightPointPortfolioSolutions.com</a>, <a href="https://www.amazon.com/Found-Jesus-Stock-Market-Responsible/dp/0996098577">I Found Jesus in the Stock Market at Amazon</a></li></ul>On-Air Mention:<ul><li>Like Cassie mentioned earlier, most Christians earnestly want to integrate their faith and finances together for greater kingdom impact. But when it comes to actually applying biblical principles, they get stuck. This is where a tool like the MoneyWise app becomes important. Thousands of people everyday access the app for practical application; you can manage all of your accounts in one place, and use the digital envelope system to make sure that all expense categories stay on track. But the added value is the biblical financial content at your fingertips. Search for any topic in the app to get instant insight, or you can even ask a question in the community forums and get feedback from other believers on this journey to financial faithfulness. Choose from 1 of 3 options depending on your management style, and the MoneyWise app is available on desktop or mobile. Go to moneywise.org and click the App tab for more details.</li></ul>Next, Rob answers these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:<ul><li>If you purchased your first home in 2020 and your monthly payments were $1,130 per month but then, for the next year, they dropped to $770 (which you found that odd) and you later discovered the lender had skipped the escrow which has raised the monthly payment to $1,800+ per month. They have agreed to split the escrow balance over 48 months making the new payment around $1,300 but they've also given the option of paying the escrow in a lump sum, should you do this instead of spreading it across the 48 months?</li><li>Is there any tax disadvantage for paying a home mortgage off early?</li><li>If you have the belief that the stock market is immoral and you would like to invest in your community instead, are there resources available to discover ways to do this? <a href="https://www.faithandinvesting.com/">FaithAndinvesting.com.</a></li><li>Can you convert EE series savings bonds directly to I Bonds or must you cash them?</li><li>Is moving a Roth into an I Bond a good idea?</li><li>Are life insurance benefits from your husband's passing taxable?</li><li>If you've had an annuity for years and you've been offered to take a lump sum of $50,000 or continue the income stream about $500 per month, how can you determine what to do? <a href="https://www.moneywise.org/find">Find a CKA</a></li><li>If you and your husband have inherited a large amount of money and you're about to buy a home in another state for for a retirement home, should you take out a home equity loan on your primary residence or just get a new mortgage on that next house?</li><li>Is there a tax benefit for your brother if your mom gives him her house instead his inheriting it?</li><li>Is title lock insurance something to consider?</li></ul>Be sure to check out the rest of MoneyWise.org to connect with a MoneyWise Coach or access our books and our many free helpful resources. You can also find us on Facebook (MoneyWise Media) and join the conversation. Thanks for your prayerful and financial support that helps keep MoneyWise on the air. And if you'd like to help, just click the Donate tab at the top of the page.<ul><li> </li></ul>

Listen to MoneyWise Live each weekday at 4pm EST on Moody Radio.

MoneyWise Live

Canadian hockey great P.K. Subban once said, “Life is a chess match. Every decision you make has a consequence.” Many of the decisions we make affect us far into the future, especially investing decisions. Today we’ll talk with investment expert Mark Biller about a kind of decision-making that yields the best consequences.
Mark Biller is executive editor at Sound Mind Investing (SMI), where they’ve made a science out of decision-making. 
<ul><li>We often think of investing decisions as “good or bad.” But takes us beyond that mindset with something he calls “inside-out” decision-making. </li><li>INSIDE-OUT DECISION-MAKING</li><li>It starts with a different way of thinking about making investment decisions. SMI teaches members that they can make most investing decisions with little regard for what’s happening in the investment markets. That may sound counterintuitive, but here’s the case for that approach: </li><li>Start with this question: Where do investment decisions come from for many investors? </li><li>For many people, their starting point is the impersonal “outside” world of current events, blog posts or magazine articles, and “expert” recommendations. We can sum that up to say most investor decisions are guided primarily by outside considerations. </li><li>As those investors respond to the data constantly coming at them — sometimes buying, other times selling — their personal “inside” financial world takes shape. But their thinking is “outside-in,” meaning that the continual stream of outside information is really what’s driving their thinking and actions. The fact that most people invest this way is largely why we see so much herd behavior in markets, as everyone reacts to the same news flow like those giant flocks of birds you see swirling in the sky.</li><li>But consider a different approach: Start your decision-making process with “inside” information. With this model, the focus is on your own financial needs and a personalized
long-term strategy designed to meet
those needs. Your buy and sell decisions are based on what’s required to ensure their financial holdings are in accord with the game plan.</li><li>In contrast to the outside-in model we described a moment ago, this is “inside-out” thinking, where decisions are primarily shaped by inside considerations. This makes current market info and what the “experts” are saying largely irrelevant. The “outside” world of investment professionals comes into the picture only when assistance is needed in executing decisions made in alignment with their long-term plan.</li><li>For example, if your family has grown to the point that you need a minivan to haul everyone around, you shouldn’t buy a sporty little convertible just because someone on TV or in an ad says they’re “hot” right now. </li><li>The main point here is it’s foolish to let this type of outside stimulus steer you into making such inappropriate purchases. Instead, you make your decisions based on your needs at the time, regardless of what the person on TV would like to sell you.</li><li>A lot of investors have been whipped around this year by the market’s volatility, selling in fear as the market fell during the first half of the year, then piling back in when it bounced this summer, only to watch it dive again lately. </li><li>It’s much better to be guided by a well-defined strategy, rather than be whipped around by outside-in factors like what the talking heads on CNBC are predicting will happen next.</li><li>INSIDE-OUT CHECKLIST</li><li>Here’s a short checklist of questions to ask yourself:</li><li>1. Is my financial foundation rock solid? That is, am I debt-free, and is my emergency-savings fund sufficient? If it isn’t, they may need to sell some stock — or at least pause contributing to their 401(k) plan for a bit — in order to repair the cracks in their foundation. </li><li>2. Are my earlier assumptions about my lifetime earnings, retirement and lifestyle goals, health needs, and life expectancy still on track? If in doubt, it’s a smart idea to re-run those numbers. Those results might dictate the need for an inside-out change to a person’s portfolio mix between stocks and bonds. </li><li>3. Am I using investing strategies that reflect my emotional tolerance of risk? One caveat here: It’s dangerous making big adjustments to an investing plan during a bear market, so be careful with this one right now.</li><li>But the goal is to build a portfolio that you can ride through a bear market. That’s a healthy inside-out investing approach. Getting to that point may lead you to reduce your holdings in one strategy in order to allocate more to another.</li><li>4. Are my protective boundaries still in place? If not, what adjustments should I make? For example, having more than 15% of your total portfolio in the stock of your employer is risky. In that case, even if you think your company’s stock will do well in the future, it’s probably wise to sell some and diversify by reinvesting in other assets. </li><li>5. And finally, am I meeting my giving goals? If not, maybe I should make lifestyle adjustments or sell some investment holdings to fund additional giving. </li><li>MAKING THE MOST OF A DOWN MARKET</li><li>Bear markets are scary, and they can be damaging for those in or near retirement. But they’re actually a net positive for younger folks who continue to invest through market downturns.</li><li>This is where the beauty of dollar-cost-averaging comes in. When you contribute the same amount each month to your retirement plan, you naturally buy more shares when stocks are down.</li><li>When the market recovers and stock prices rise, which they always have in the past, you own more shares than you would if you bought in an “up market.” So the value of your portfolio gets a big boost.</li><li>If you’re dollar-cost-averaging and have a long time horizon of 10 years or more, you don’t have to fear a bear market. It’s actually helping you accumulate shares at lower prices, which will help you long-term.</li><li>You can read more about today’s topic in the SMI article, “<a href="https://soundmindinvesting.com/articles/view/make-sure-your-investment-decision-making-is-inside-out1">Make Sure Your Investment Decision-Making Is Inside-Out</a>” at SoundMindInvesting.org.</li></ul>On this program, Rob also answers listener questions: 
<ul><li>Should you give property to adult children before you pass or will it to them? </li><li>How do you determine if you’ll need to take a required minimum distribution? </li></ul>RESOURCES MENTIONED: 
<ul><li><a href="https://www.christiancreditcounselors.org/">Christian Credit Counselors</a> </li></ul>Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to <a href="mailto:questions@moneywise.org">Questions@MoneyWise.org</a>. Also, visit our website at <a href="http://moneywise.org/">MoneyWise.org</a> where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.

﻿Canadian hockey great P.K. Subban said, “Life is a chess match. Every decision you make has a consequence.” ﻿Many of the decisions we make affect us far into the future especially investing decisions. Rob talks about decision-making that yields the best.

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Finny Kuruvilla, MD, PhD, serves as a Co-Chief Investment Officer, Senior Portfolio Manager for Eventide Asset Management’s mid-cap growth and healthcare & life sciences strategies, including the Eventide Gilead Fund and the Eventide Healthcare and Life Sciences Fund, a Managing Director for Eventide’s private fund, as well as Founding Member of Eventide.

Dr. Kuruvilla has a background in healthcare, statistics, and investing. Concurrent with his early years at Eventide, he was a Principal at Clarus Ventures, a healthcare and life sciences venture capital firm subsequently acquired by Blackstone. Earlier in his career, Dr. Kuruvilla was a postdoctoral research fellow at the Broad Institute of Harvard and MIT, where he led the development of a new microarray between the Broad Institute and a publicly-traded company Affymetrix. Prior to his investing career, Dr. Kuruvilla was resident, chief resident, and fellow at the Brigham and Women’s Hospital and Boston Children’s Hospital.

Dr. Kuruvilla holds an MD from Harvard Medical School, a PhD in Chemistry and Chemical Biology from Harvard University, an SM in Electrical Engineering and Computer Science from MIT, and a BS in Chemistry from Caltech.

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