Many commentators have noted that the second five of the Ten Commandments have a different focus than the first five: while the first group focuses on the believer’s relationship towards God, the second set emphasizes the his or her relationship with others.
This may be the reason why Jesus, in a famous encounter, is said to have summarized the Ten Commandments—and indeed the full corpus of Jewish law—into two principles: love God, and love your neighbor. His “first and greatest” command, to love God, is taken directly from the Jewish “shema,” the Hebrew creed that a faithful Jew would recite daily. The second, while less prominent in the Old Testament, effectively encapsulates commandments six through ten, and indeed much of Jewish law: love your neighbor as yourself.
In applying these principles to managing money, investors need to focus on their attitude first towards the markets, and second towards other investors. The first command tells us to respect the markets, their complexity, integrity, and wisdom. It’s not a small thing to disagree with the market’s assessment of what a stock or a bond may be worth. Jesus’ second command—which is like the first—advises us to respect other investors—their rights and protections—not just under investing law, but also under ethical and moral codes of fiduciary conduct that have been worked out over centuries.
For example, respecting other investors means keeping confidential matters confidential. If someone shares his or her personal information with you, you have no right to tell others about this, unless they give you permission. Confidentiality is crucial. Other fiduciary duties can similarly be derived from this simple principle of respect.
Jesus’ synopsis of the Ten Commandments is a reminder that much investment wisdom is simple, but not easy. Respecting the market means that investing is hard work, and requires significant mental and emotional energy. And respecting other investors is a good way to stay out of trouble.
Douglas R. Tengdin, CFA
Chief Investment Officer
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