Ten Commandments for Investors (Part 1)

Charlton Heston made the Ten Commandments famous on the big screen. But they can be practical for investors as well.

A classical approach to investing recognizes that investing is just part of life. Markets reflect human nature, with all its strengths and weaknesses. And the great works of civilization—in literature, art, music, and religion—can also illuminate our character.

So it shouldn’t be surprising if we can divine investment lessons from some of our great cultural icons. Without a doubt, the Ten Commandments rank as one of the most influential texts of any age. They’re all around us—in the movies, in the news—and they’re foundational to two major world religions. With some analysis, they can serve to keep investors from straying. Over the next several days we will look at the Decalogue from an investor’s perspective.

The First Commandment is that a follower of Jehovah shall have no other gods. That is, Jehovah is jealous: no cheating! Followers of the markets understand that the market is jealous as well. There is no substitute for sticking to your goals and your plan. Investors need to know what they want out of their money: income, growth, support for retirement, or something else. Understanding what you want comes before deciding what to do.

Investing is complex, and there are all sorts of pitfalls, not the least of which is the temptation to stray off course. If you want capital growth, it’s a mistake to focus on income. Likewise, if you’re looking for a stable and growing after-tax income stream, don’t get tempted by the latest hot IPO.

If they didn’t stay faithful to their god, the Israelites would have never reached the Promised Land. Investors need to be faithful to their plans, if they want to reach their goals.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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