The Scriptural Wisdom of Investment Diversification

Although we have plenty of cable channels that would lead you to believe otherwise, no one really knows when the next catastrophic or even small event will cause economic tremors throughout the world.
Since nobody really knows what is going to happen in the next week or month, let alone the next year or decade, your plan as a Christian investor must allow for the fact that the investment markets will experience some unexpected downturns. This is where diversification can help smooth the rought ride.

A simple explanation is that diversification means picking investments that are affected differently by different economic events. However, not only is diversification wise from a practical investing standpoint, it is also reflects sound biblical principles (of course, we shouldn't be suprised!):

Diversification reflects prudence.

A simple man believes anything, but a prudent man gives thought to his steps. (Prov. 14:15)

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth. (Ecc. 11:2)


Diversification reflects humility.

Plans fail for lack of counsel, but with many advisers they succeed. (Prov. 15:22)

Do not boast about tomorrow for you do not know what a day may bring forth. (Prov. 27:1)

We can’t know what the future holds, but as Christian investors we know the One who holds the future.
Remember: nobody really knows what’s going to happen next. The investment world is greatly influenced by human emotions as well as events which are beyond our control. Diversification is the best practical financial strategy to provide contingencies for these unknown future events.