Ten Commandments for Investors (Application)

Are the Ten Commandments just for the religiously-minded?

That’s a fair question, as is the question as to why a finance guy is spending so much time on a religious text. The short answer is that we can learn investment lessons from any great work of literature, religious or secular. Great literature, after all, is just a reflection on human nature, in all its complexity. Investing is also a reflection on human nature, but written in the language of finance. It’s perfectly sensible that they should have lessons to offer one another.

But there is a deeper reason why the Ten Commandments are especially poignant. Almost 216 years ago George Washington, late in his second presidential term, asserted that a sense of religious and moral obligation is essential to a well-functioning political economy. His Farewell Address is considered to be one of the most important documents in American history, and is still read annually in the Senate.

A sound moral and ethical framework is crucial for all aspects of society to work smoothly, but it is especially true in finance. The bank robber Willie Sutton is said to have robbed banks because “that’s where the money is,” and crooks and criminals are perennially drawn to finance. The swindles and scams that we see so regularly are a discouraging reminder that we need to be careful with our money.

By contrast, The Ten Commandments stand out as a moral and ethical foundation. Their simplicity makes them memorable. It’s been said that if you want to be able to recognize counterfeit currency, you should study the genuine article. And if we want to avoid the next Madoff, being familiar with a fundamental moral text should be helpful.

Douglas R. Tengdin, CFA
Chief Investment Officer
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