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Holy Thursday

Before the feast of Passover, Jesus knew that his hour had come
to pass from this world to the Father.
He loved his own in the world and he loved them to the end.
The devil had already induced Judas, son of Simon the Iscariot, to hand him over.
So, during supper,
fully aware that the Father had put everything into his power
and that he had come from God and was returning to God,
he rose from supper and took off his outer garments.
He took a towel and tied it around his waist.
Then he poured water into a basin
and began to wash the disciples’ feet
and dry them with the towel around his waist.
He came to Simon Peter, who said to him,
“Master, are you going to wash my feet?”
Jesus answered and said to him,
“What I am doing, you do not understand now,
but you will understand later.”
Peter said to him, “You will never wash my feet.”
Jesus answered him,
“Unless I wash you, you will have no inheritance with me.”
Simon Peter said to him,
“Master, then not only my feet, but my hands and head as well.”
Jesus said to him,
“Whoever has bathed has no need except to have his feet washed,
     for he is clean all over;
so you are clean, but not all.”
For he knew who would betray him;
for this reason, he said, “Not all of you are clean.”

So when he had washed their feet
and put his garments back on and reclined at table again,
he said to them, “Do you realize what I have done for you?
You call me ‘teacher’ and ‘master,’  and rightly so, for indeed I am.
If I, therefore, the master and teacher, have washed your feet,
you ought to wash one another’s feet.
I have given you a model to follow,
so that as I have done for you, you should also do.”

(John 13: 1-15)

Talent

A few weeks ago in this space, we shared some ideas with you about the stewardship concept of time.  Today we will look into talent

I have a Caravaggio (1571-1610) print hanging in my office.  Not the original of course, but a digital reproduction on foam board, complete with a wrinkled corner from falling off the wall and striking the floor.  It’s “The Calling of St. Matthew and depicts Jesus and Peter visiting Matthew, calling him to follow Jesus. 

I was first turned on to this painting by a friend of mine, Father Jim Heiser, pastor at St. Stephens Indian Mission on the Wind River Reservation in Wyoming.  Years ago, he asked me if I was familiar with Caravaggio and this piece. When I answered in the negative, he sent me a text with a copy of the painting. 

For more than a decade, I have included in my email the verse from Matthew’s Gospel that describes how the apostle came to be called by Jesus in spite of his sinful past as a tax collector.  “As Jesus passed on from there, he saw a man named Matthew sitting at the customs post.  He said to him ‘Follow me.’ And he got up and followed him.” (Mt 9:9)  The Caravaggio painting depicts this moment, although the characters in the painting are dressed in garb of Renaissance Italian men, not first century Jews.

Notice that there wasn’t any hesitation in Matthew’s response to the call.  Rather, he just got up from his place of comfort and followed Jesus. 

In 2010, I heard the Lord call me to leave my business and go to work for the Church in Cheyenne. After an awful lot of prayer and discernment, I did just that. 

I assumed I would spend the rest of my working days serving the Church in Wyoming, where I had lived for 35 years, raised a family and built a business.  But God didn’t place any parameters regarding the place and time for that work around his call and my assumption was wrong.

Nine years later I was called to leave Cheyenne and come here.  So following a great deal of prayer and discernment, we packed up everything we owned and moved away from all we had known to serve the Lord in the Diocese of Evansville.   

The last two years have been far from what I thought they might be like.  Not better or worse, but different.  Uncomfortable at times, being in a new place, meeting new people, then getting hit with all that the pandemic brought.  But I take heart in the words of Emeritus Pope Benedict XVI when he said: “The ways of the Lord are not easy, but we were not created for an easy life, but for great things, for goodness…. Those who desire comforts have dialed the wrong number. Rather, he shows us the way to great things, the good, towards an authentic human life.” 

My wife and I asked God what he wanted from us.  We listened and said OK, Lord, we are yours and will do what you want.  We trust you.

I encourage you, dear Reader, to ask God what he wants from you and what you can give to the Church, because the Church needs you.  You have talents that can help grow the Kingdom of God, even if you don’t realize it right now. Open your hearts to those opportunities that do appear.  Trust the Lord and say yes.

Every time I look at that Caravaggio print and see Jesus’ pointing at Matthew, I see him pointing at me.  In reality, he is pointing at all of us because that’s what he wants – all of us.

Time

It is almost impossible to write, speak or think about stewardship without the phrase “Time, talent, and treasure” coming into our minds.  So connected are we to that phrase that it becomes akin to saying “hippopotamus” twenty times, wherein it loses its meaning altogether.  Part of my work is to help recapture the meaning of the three Ts so that they don’t just roll aimlessly out of our mouths like the twentieth hippopotamus.

Let’s look at T1 – Time.  A priest friend of mine suggested that we think of “time” as prayer.  When we look at it that way, time – prayer – is a priceless gift from God that we are expected to return with increase.  We receive the gift of communicating with God through our prayer, then offer it back to him with more prayer carrying not only our pleas for help, but for those others in our lives whose sufferings and struggles cause them to reach out for help.

For the past four months I have been following the story of the CEO of the Catholic Leadership Institute, Daniel Celluci.  I met Daniel at a stewardship conference, but to say I had a close personal relationship with him would be, well, not the truth. 

Daniel has achieved a high level of professional success in his life and now leads a great firm.  Each Monday, he sends out an email entitled “Discerning Insights about Leadership.”  I read them and generally get some good food for thought. 

One Monday last December I received my regular email from him that had an urgent prayer request. Daniel’s seven-year-old son Peter had just been diagnosed with a malignant brain tumor.   What I noticed in Daniel’s message that day was rather than wallowing in sorrow about the devastating news of his son, he turned to God for help, asking for prayer from all those who knew him and knew of him. 

Since that time, Peter has undergone several surgeries, six weeks of daily radiation treatments, and is about to undergo a year’s worth of chemotherapy.  Peter has shown that he is a brave little boy and he  and his family face a very, very difficult road ahead. 

But this isn’t a column about either Peter or about Daniel.  Rather, it is about suffering, prayer, and stewardship.

When we are faced with the struggles and sufferings of someone we love, the natural reaction is to want that suffering to end.  It is not uncommon for us to think “If I could take on your suffering for you, I would do it right now.”  In effect, that is what happens when we pray for someone.

A number of years ago I had some serious health issues. Rather than keep it to myself, I asked everyone I knew to pray for me.  I was humbled beyond belief that so many people would pray on my behalf, taking my suffering from me and offering it to God. 

Stewardship so often focuses on the Treasure part of the three Ts.  Treasure is essential to the work of the Church, yet it is temporal, bound to earth and time.  Prayer, on the other hand, is the quintessence of stewardship in that it is a direct line to God, superseding the boundaries of our world.  Prayer is a great gift from God, as though he had given us a phone with a direct line to him when we were born.  Just like the other gifts he gives us, we can return this gift of prayer to him with increase by using it frequently and offering it back to him for all those who ask for our prayers, and especially for those who don’t. 

The Passion

St. Stephens Mission on the Wind River Indian Reservation, St. Stephens, Wyoming

Sunday is Palm Sunday, one of the two times during the year in which we hear the reading of the Passion of our lord Jesus Christ.  The other, of course, being Good Friday. It is likely there will be several readers taking on various roles as they present the Passion to those gathered.   The Passion, even in its grief and sorrow, is filled with hope as it leads to the Resurrection and the joy of our Easter greeting, “Jesus is risen, he is truly risen!”

I have been a reader at my parishes for many years.  It is both a great blessing and enormous responsibility to proclaim Scripture to my brother and sister parishioners.  Over the years I have read at Mass during every liturgical season, from Ordinary Time, Advent and Lent, to the great feasts of Easter and Christmas.  

Several times I was scheduled to be a part of the reading of the Passion. We are familiar with the scenario as the presiding priest takes on the role of Jesus, a second reader is the voice of multiple characters, and another reader acts as the narrator.  Finally, the voice of the crowd is supplied by the congregation.

One particular Palm Sunday I was assigned the part of the narrator.  As I was giving voice to the actions of the characters in the Passion, I became increasingly agitated at the terrible things that were happening to Jesus: the Apostles falling asleep while He prayed; His betrayal by Judas; Peter’s denials; the crowning of thorns and the mocking of the crowd.  As familiar as I was with the whole production, having witnessed or been part of it since my childhood, this time, as narrator, it got to me.

At one point during the Passion, Pilate poses questions to Jesus but does not get the answers he wants.  He then turns to the crowd and asks “What do you want me to do with him?”  We all know the answer to that question, so it was not a surprise to me when, reading my lines following Pilate’s question, I read aloud “And they answered Pilate, saying….” The crowd then responds “Crucify Him!”

I knew what they were going to say, as it was right in front of me in the script.  But the response “Crucify him” shocked me.   When those words came into the sanctuary, where I was standing, from all those people in the church, I remember feeling terrible fear and revulsion in their response. 

When Pilate asked his question a second time and received the same response, I felt crushed, as though I was completely powerless and there was nothing that could be done to change the monstrous course of action. 

As I continued reading my lines, the tale of Jesus carrying His cross, the nailing of His limbs to the cross and the cruelty of the Roman soldiers overwhelmed me and I was grievously sad.  After the priest read Jesus’ last words – “Eloi, Eloi, lema sabachthani – My God, my God, why have you forsaken me?” –I turned to my script and read “Jesus gave a loud cry and breathed his last.” It was all I could do to get those words out of my mouth as I was overcome with grief.

We all knelt down at this point.  There I was, kneeling in the sanctuary of the church, tears flowing down my face over the death of Jesus.

Reading at Mass is part of my Catholic stewardship and it is usually an enjoyable experience.  But stewardship isn’t always sunshine and roses.  That Palm Sunday, I had to recount the cruel torture and death of my friend to hundreds of people sitting in front of me.  That was unbelievably difficult.

This Palm Sunday, as you listen to the Passion of our Lord, try putting yourself in the story witnessing your friend Jesus being tortured and killed.  Then, in the depths of your sorrow, remember that soon, so very soon, we will once again proclaim that He is risen, he is truly risen.

The Light

Many years ago while I was working for the Diocese of Cheyenne, I brought my camera with me to an event at a parish.  The bishop saw the camera in my hands and said “Matt, take some pictures.”  So I did.  What started out as a request for some snapshots to use on his blog turned into a full-fledged part of my ministry, where I use my photos in much of my work, as well as a most enjoyable and challenging hobby. 

Obsession might be the better word here, because that occasion tripped a creative lever inside of me that had never been tripped before.  Prior to coming to work for the Church, my business required that I pour over spreadsheets and investment analysts’ reports, which were not really right-brain activities.  Seeing the possibilities of expressing creativity through photography, I dove headfirst into the picture-taking pool.  Since that time of the bishop’s request, I have taken tens of thousands of photos.

Most of those photos have been deleted, however, because they were awful.  Out-of-focus, poorly composed, over-exposed – I believe I committed almost every photography sin.

One cannot become a better photographer by just taking more photos, as that approach just equals more junk. To become a better photographer, one must take a critical look at ones photos with the intention of learning from those mistakes. In my desire to get better, I learned that it helps to look at the masters of painting to see how they use light in their work.  Since photography is all about light, I thought that was a great idea.

In 2018, the Denver Art Museum had a show featuring sketches and paintings by Rembrandt, a true master of light in painting.  We lived close to Denver at the time and made the trip to see the show with some friends.  I took my camera with me so I could make a record of Rembrandt’s work for my study.

I took a photo of every piece in the exhibit.  I went home that night and downloaded everything to my computer, ready to make a detailed study of all that I had seen.

But I got distracted and they sat on my hard drive for 3+ years, never seeing the light of day. 

Recently, two friends, independent of each other and just a day apart, brought up Rembrandt’s painting of The Prodigal Son.  I was reminded of the photos I took and looked at them again in detail.   

Rembrandt’s use of light brings depth to the sketches and paintings.  The sketch shown nearby, Christ Crucified between the Two Thieves, uses light to emphasize Jesus and, peripherally, the two thieves, while clouding the others in shadows and darkness. It feels as though we are a part of the scene, not just viewing a flat sketch.

We are approaching the fourth week of Lent, a benchmark that may find us wondering how we fell so short of fulfilling our intentions of faithfully preparing for Easter and how we can get back on track.  This is a question I ask of myself, and this sketch brings me hope that I can salvage my commitments.

Darkness is the absence of light.  Rembrandt casts light from above upon the crucifixion, the cruel torture and death of the Son of God.  Without the light, there is darkness and no hope.  But the light, even in the darkest moments, gives us hope that this is not the end of the story, but the beginning.  Thanks for reading.  If you would like to see the photos of Rembrandt’s works, write to me at mpotter@evdio.org and I will send you the link.

My God Moment

Lent is a time of preparation which can lead to a heightened awareness of the presence of God in our lives, a presence that can go unnoticed when we have our faces buried in our work or our phones.  When we turn away from those distractions, we have a real opportunity to see God in our everyday.  Sometimes those moments are moving and powerful beyond description.  That’s what I call a God moment.

A God moment can be a moment, an hour, or an hour that seems like a moment.  Regardless, it is a very personal, deeply spiritual, and quintessentially moving experience. Mine has stayed with me for more than 40 years.

From the beginning:

I learned to play the guitar in high school.  I fell in love with the instrument and played every chance I had, often falling asleep at night with my guitar in my hands.

After graduation, I continued my schooling at the University of Wisconsin-Platteville. I attended Mass at the Newman Center – St. Augustine University Parish.  The year was 1976, and the church was new and lacked a lot of church identifiers, like kneelers (there were folding chairs), stained glass, or a permanent altar. Think of a parish hall with commercial carpeting, and an altar brought in for Mass. 

There was no organ, either.  Music was provided by a dozen students with guitars and voices singing and playing with great spirit and enthusiasm. The first time I saw them I knew I wanted to be a part of that group, with the connection being my guitar.  Following Mass, I walked up to the leader (she was a staff member) and told her I would like to join and I was in.  It was as good as it gets, playing an instrument I loved in a place I loved with people whom I grew to love. 

Our group made a Lenten retreat near the very cold and snowy Spring Green, Wisconsin.  This was no five star resort, and our weekend stay was a BYOB weekend – Bring Your Own (sleeping) Bag.  Floor space was abundant, as there were no beds. Or rooms, for that matter.  Just a big, open space that accommodated a dozen university students, a music minister, and a priest. 

What happened between Friday night arrival and Sunday morning Mass escapes my memory, but what happened during Mass is burned in my very being forever.

When we awoke early Sunday morning, it was so very cold that we could see our breath and nobody wanted to get out of their bag.  Our priest managed to coax us all into a circle where he lit a single candle and began celebrating Mass.

We were a group of students in our late teens / early 20s who were two days without showers or enough sleep, shoulder to shoulder in this circle, the candle in the middle, praying together – “Our Father, who art in heaven ….”

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All at once the entire room and everyone in it was filled with a presence so powerful as to be both beautiful beyond words and frightening beyond imagination.  It was at this moment that I knew without any doubt or question that God was real, and He was sitting in that circle with us.  It was literally breathtaking and brings me to tears today as I retell this story. 

I remember this so vividly. It was so cold at the start of Mass because there was no central heat and nobody had built a fire in the stove, yet the presence of God’s Holy Spirit warmed the whole space and filled our souls.

Whatever words I use fall far, far short of the power, beauty, and fear that was among us that cold February morning in Spring Green, Wisconsin. 

This was my God moment.  I have been blessed with being able to go back to that moment many times since then and once again experience the absolute holiness of that Sunday morning long ago.

This Lent, as you prepare for the Resurrection of our Lord, pay close attention to how things around you change and you become keenly aware of God’s presence. Your God moment could be right in front of you. Have you had a God moment and want to share it?  I would love to hear about it.

Family and Volunteers

I would like you to meet the dogs we own, Lexie and London. 

They are golden doodles and best friends to each other.  They are not related, but have been together a long time.  Lexie is the white dog and London the black.  I call them my clergy dogs.  Their tongues are hanging out because it was unbelievably hot and humid on the day I took this photo.  I know that I was wilting behind the camera.

These two are great friends to us, too.  They rarely leave our sides and provide us with a dose of affection whenever we need it.

They are definitely inside dogs.  Some might call them spoiled, but I just call them family.

Yes, family.  We have conversations with them and tell them our secrets and troubles.  They listen attentively and make us believe we are the most important people in the world.  They never judge us and they miss us when we are gone. I know this because they are so excited when we come home.

When they are sick we worry.  Since they can’t tell us what hurts, we look at their symptoms and try to figure out what is wrong.  A trip to the vet is sometimes required to get them feeling better, and often that comes with prescription meds, and bills, as well. 

We feed them, provide comfortable places in the house for them to sleep, and a place for them to do their business outside. We then go outside to clean up what they leave.

We are responsible for their actions.  If they bite someone, they and I will get in trouble. 

But I would argue that we don’t own them at all. Rather, they have been given to us to care for during their relatively short lives.  We accepted this responsibility when we brought them home and now work to give them good lives for the 10 years or so that they are with us.  We love them, feed them, care for them, and spend a lot of money on them. 

Why do we do this? That’s easy.  Like I said a little while ago, Lexie and London are family.  We would do most anything for them that we could, like we would for our children or grandchildren, or for our brothers and sisters, unhesitatingly.  We would help to the limit of our resources without regard to our personal comfort or sacrifice. We would do that because we love them and they are family.

Our relationship to the Church is like that.  Church is family, not a casual acquaintance.  We would do anything we could, sometimes beyond our resources, to help.  We don’t do this for notoriety, but because it is the right thing to do and because God wants us to. 

I suggest that we get rid of volunteers in the Church.  Not the people, just the term.  We don’t have volunteers wipe the noses of our grandchildren or clean up dog poop in the backyard.   We don’t ask how much time it will take if our husband or wife is sick and needs us because we have a meeting at 7:00.  We won’t shy away from taking a brother to a doctor’s appointment.  We do this because they are  family.

When we are asked to help at the parish, we do so because they are family.  There is no “us” and “them.”  It’s “we.”

God graces us with the people and pets in our lives.  He expects us to care for them.  God graces us with His Church. He expects us to take care of it.

There aren’t volunteers in a family;  there is just family.  As Catholic stewards, we understand that and embrace it. 

We don’t own Lexie and London, but we are entrusted with their care.  We don’t own the Church, either. Rather, it is the Church of Jesus Christ, who is still its head.  We are, however, given the monumental task of caring for it.  Which we do because, well, we’re all family.

As always, thanks for reading.  I would love to hear from you.  Write to me at mpotter@evdio.org.

It is Still Christmas

If you’ll recall from our last column, we are still in the Christmas season.  In fact, we continue celebrating Christmas until January 10, the Baptism of the Lord.  With that in mind, let me share with you another Christmas thought.

I am no better than anyone else at shutting out the pre-Christmas, consumer-driven noise that occurs each year leading up to December 25.  We are inundated with it, and with as much time as we spend on our computers and phones, and the incessant ads with which we are pummeled, it is nearly impossible to avoid it all.  I enjoy the music, as it evokes memories of Christmas as a child in a home filled with music.  I have been known to shed a tear or two when I watch “White Christmas” and see all those soldiers honoring their former commander as Bing Crosby sings about following the old man wherever he wants to go.

Of all that music and those movies, my favorite one of all is A Charlie Brown Christmas.  I remember watching this short film when it aired for the first time in 1965.  I was in the second grade at St. Johns school in South Milwaukee, Wisconsin at the time.  My friend Jon Nawrocki and I were Peanut’s fans, ordering all the Charlie Brown books from the Arrow Book Club, then sharing them with each other and laughing at all their adventures.  When we found out Charlie Brown would be on TV, we were ecstatic.

Like so many others, I have watched A Charlie Brown Christmas many times since that original broadcast.  I purchased a CD of the soundtrack some time ago and have listened to The Vince Guaraldi Trio play those unforgettable songs over and over.

The animation in the film seems absolutely archaic today.  No computer generated imagery or three dimensional characters.  The dialog is not terribly complex, and the story moves along with the actions and words of a group of children.

The climax of the cartoon is when Charlie Brown laments that nobody can tell him the real meaning of Christmas.  Linus pipes up and offers the only explanation there is, quoting from the Gospel of St. Luke.

The words of Luke are powerful, and each time we hear them our hearts soar!  “And suddenly there was a multitude of the heavenly host with the angel, praising God and saying: “Glory to God in the highest and on earth peace to those on whom His favor rests.”  (Lk 2: 13-14)

While those words are powerful, what makes them that way in the midst of a cartoon about a small group of children navigating the complexities of commercialism in opposition to the Gospel?

Silence.

That’s right. Silence.  Linus responds to Charlie Brown’s plea for help and walks to the center of the stage.  No music or dialog, just Linus saying “Lights, please” to focus the attention on what he is about to say.  He tells us the true meaning of Christmas using the words of St. Luke, then silence again as he walks back to Charlie Brown and tells him “That’s what Christmas is all about, Charlie Brown.

It’s the silence that frames that wonderful story that makes it so powerful.  It sets it off, telling the viewer that what he is about to hear is very, very important.  It seems to me that that is an important lesson for all of us.

This time of year, much of the world has moved on from Christmas, and the noise is ramping up again.  Let’s take our cues from Linus, framing the Gospel – the most important thing – with silence. 

For the rest of this blessed season, and for the year ahead, may you know Him more fully through the love and grace he so richly bestows on us all.    

As always, thanks for reading. 

Leaf Peeping

Brown County State Park, Indiana

This is our second autumn in Indiana, and it’s really beautiful.

I always thought Wyoming autumns were glorious, and I still do. There is something very special about an Indian summer day catching the gold of the aspen leaves quaking in the breeze. The cool nights and warm days create a most enjoyable contrast.

Indiana autumn is quite different. The vast hardwood forests and the seas of corn and bean covered farmland create a cacophony of colors and textures that leave one’s senses reeling in their beauty.

God’s hand is evident in the environment. To declare it simply an accident of nature, as some do, is to simply ignore the obvious. Fall offers hope, a drawing on our emotional savings account taken from the surplus of the summer. The magnificent colors that surround us steel and fill our souls for the winter, when the cold and dark want to rob us of our joy.

We had intended to travel back to Wyoming to visit our family but had our plans waylaid by the continuing pandemic. Instead, we spent six days in Brown County, Indiana, giving glory to God for the palette placed before us.

While the weather was cool and rainy, it did not diminish the the fact that we do, indeed, live amidst stunning proof that God loves us.

St. Kateri Tekawitha

St. Kateri Tekawitha at St. Stephens Mission, St. Stephens, Wind River Reservation, Wyoming.

July 14 is the memorial of St. Kateri Tekawitha, the first Native American saint. The “Lily of the Mohawks”

Converting to Christianity through the work of Jesuit missionaries who had come to her village in New York, she was devout in her faith and consecrated herself to virginity in spite of the repercussions of such an act, and without knowledge that was a desirable action.

She left her village to remove herself from the pagan practices of her people, walking to Sault St. Louis near Montreal, a 200 mile journey. There she deepened her faith, practicing an austere life that included severe fasting.

There is much to be told about her life, and a wonderful resource is at the website Kateri.org where her story is laid out beautifully.

Her day of canonization by Pope Benedict XVI on October 21, 2012 was a great day of celebration for the Catholic community on the Wind River Reservation in Wyoming.

St. Kateri Tekawitha, pray for us.

Uninformed Advice is Bad Advice

(Just a note about my qualifications for writing what follows.  I am a Certified Financial Planner (CFP®) and have been since 1993.  I was involved in the investment consulting business for almost  a quarter-century.  I earned several sets of credentials along the way – Certified Investment Management Analyst; Certified Investment Management Consultant; Accredited Investment Fiduciary – in addition to CFP®.  I also spent twelve years as a member of the Board of Trustees of the Wyoming Retirement System, a public pension fund that operated to benefit 50,000 public employees while managing a $5 billion dollar investment fund.  I spent two years as chairman of the board, and 4 years as chairman of the investment committee.)

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Sometimes on my drive to the Catholic Center, I will listen to a well-known financial advice-giver, doling out answers to questions about debt, budgets, investments, and money in general. But I am cautious and skeptical regarding his advice and his motives because I have heard him say things to callers that are misleading and inaccurate. 

Allow me to get a little nerdy here.  In my years as an investment consultant, I was constantly measuring the risk involved in the portfolios of my clients.  We were able quantify investment risk using metrics derived from the market movement of various asset classes in relation to the market in general.  One of the primary measurements is beta, which provides a value to how an investment moves relative to its index. 

Beta is not a measure of risk in itself. Rather, it tells us that if investment A has a beta of 1.0, its movements exactly replicate that of the overall market itself.  A beta lower than 1 means it moves less than the market, and greater than one more than the market.  It is a way to calculate how much investment return comes from the market, and how much comes from the skill of the manager.

I bring this up because I heard the aforementioned radio host tell a caller that beta tells if an investment is risky or not, which is just not true.  This isn’t something that most people would catch or bring up in casual conversation.  Neither would most people have that information to challenge the radio host.  For me, it makes me wonder what else he is telling his listeners that may be incomplete or misleading.

Beta can be used in conjunction with alpha, which is defined as excess return adjusted for risk.  We should realize that even a term like “excess return” can cause controversy in the investment world, but it helps us move our story along.  If we have an investment with alpha greater than 0 and a beta of 1.0, it means we have found an investment that has the volatility of its index but returns greater than the index.  It is evidence of manager skill, or, perhaps, manager luck. 

Our radio host never mentioned alpha.  He never talked about indexes, either.

Indexes are unmanaged bunches of stocks or bonds that represent a particular market.  The S&P 500 is an index, as is the Dow Jones Industrial Average.  There are many, many more indexes which are widely used in the investment world.  We can invest in indexes directly through mutual funds or exchange traded funds. This method is employed successfully by many institutions and individuals. We invest in indexes because it is efficient, inexpensive, and beats 80% of active managers in any given year.

He talks about mutual funds, too.  He is an advocate for investing in four different kinds of funds – growth, growth and income, aggressive growth, and international growth.  He does this, he says, because when one fund is down another one is likely to be up.  It is his way of diversifying his investments.  This sounds impressive, but in reality it doesn’t solve any problems of diversification. 

We can tell how different one fund is from another by calculating the correlation between mutual funds and their respective indexes.  A “1” means they are perfectly correlated, in which they move in tandem.  A “-1” means they are exact opposites, and move as such.  A “0” means there is no relationship at all, and assets move independently from each other.  In reality, these four categories of mutual funds tend to have very high correlations, as in .90 +, indicating they are not very different from each other and offer very little in terms of diversification.  We diversify investments to manage the overall risk to our portfolio, and buying funds in these four different classes do not help us manage our risk by providing diversification.  He essentially has made the same investment four times, like buying CDs at four different banks. 

He won’t buy indexes, either.  He doesn’t buy them because he says they get “average” returns and he wants better than average.  So does everyone else.  The problem is it is nearly impossible to pick out managers who get better investment returns than indexes year-in and year-out.

Indexes get market returns, not “average” returns. 

Finally, I heard him tell his listeners his funds have produced double digit returns for many years, and that the funds should be able to “stand the test of time,” and that one should look at the returns based on five, ten and twenty-year histories.  There is just so much wrong with that statement that it is hard to fit it into the space people might actually read. Let’s look at three of these items.

  • Returns:  His returns are HIS returns, not yours.  Your investment schedule and his are completely different.  Your returns WILL be different. 
  • Test of Time:  Mutual fund managers and styles change constantly.  The returns generated by one manager will be far different than those generated by another manager at the same fund.  Manager A may be an all-star, while manager B – at the same fund at a different time –a bench warmer.  A fund with an impressive record may have generated great returns under manager A, then mediocre returns under manager B who succeeded A when A cashed in on his performance and went to a different fund. 
  • Track record:  This is one consideration when choosing a fund, but not the most important by a long shot.  Yet it is our host’s primary means of selection. In reality it means very little, because track records are what has happened in the past based on the people involved and their luck or skill in stock selection.  Today, those people could well be gone, different methods of securities selection employed, and different reactions to economic factors.

There is so much more to the analysis of mutual funds than I can possibly share in this post, or a hundred more of them.   

I write about these things not because this is an investment advice column, but because we are tasked by God to care for the gifts he gave us, returning them with increase. 

If we are to steward the gifts entrusted to us, it is incumbent upon us to learn about the care of those things. Abdicating that responsibility to a radio talk show host who knows nothing about you is not the way to do it. 

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