Our experienced team is here to offer you ongoing financial guidance.
We've all heard the old adage, "Put your money where your mouth is.", but have you heard of, "Put your money where your faith is."? Since the late 1800s, religion has had an impact on how many religiously-minded people spend their money and structure their investments. You can see this pattern starting with the founding of the Quakers Friends Fiduciary corporation in 1898, in the 1973 creation of the Interfaith Center on Corporate Responsibility, and more recently, the addition of GuideStone Capital Management, a 102-year-old organization established to support retired pastors and their widows, and its 24 mutual funds, to 50 different publicly-available advisory platforms in 2015.
Religion-informed investing works along-side other types of personal value-informed investing; this type of portfolio management has become a significant player in many investors' minds as they seek to align their investing with their own personal values. Some categories of these include the following:
No matter what type of personal convictions you want to honor with your investments, the idea is the same; we can help you find the right set of companies that will include or exclude a specific collection of values you espouse.
Faith-based investing involves mutual funds managed with a faith-based perspective; essentially, the potential financial return is aligned with the investor's values. The managers of these mutual funds avoid investing in companies that distribute or manufacture the following:
Those who are involved in this form of investing believe that they have a responsibility to understand where their investments are going and ensuring that they are not inadvertently financing activity that would go against their moral values.
Faith-based funds are among the fastest-growing within the impact investment category. It makes sense because when the investor has a values-based tie to the investment, they are more likely to be loyal to the choice and stick with it for the long-term payoff, potentially reaping more significant rewards. Another benefit to the rise in socially responsible investing is the fact that fees have decreased significantly over the past few years, making it more accessible to investors.
Principles-based investments are found within all industries and asset classes. As with any investment, it is wise to partner with a financial professional who understands both your desire for socially responsible investing as well as financial planning as a whole. The first question you should ask yourself is whether you want to invest your dollars for a return, the greater good, or both? As you define the impact you are seeking, you and your financial guide will have started on the right foot, in the right direction.
There is no right or wrong answer to the previous question, only a thoughtful discussion on what to focus on within the choices presented to you. You can align with many Jewish investors who seek to invest in repairing the world and often choose investments without immediate monetary payoff.
Other investors want to focus on profiting society as a whole, such as restricting investments in companies that profit from the abuse of others, providing education that brings about change, or concentrating on the potential influence on companies, customers, and communities to support a healthy society. Some categories for filtering include the following:
What makes faith-based investing different from a charity donation is the return potential. In fact, this type of impact investment has shown that it can be profitable. As you partner with a financial professional, they will help you find the right balance between a return and social impact. With any investment, the best success is found in the long-term. If you only look at a quarter-by-quarter basis, you will see a noticeable effect on fund returns. However, with a greater viewpoint of longer-term periods, you will see the rewards of your moral-based investments.
As you can see, it is possible to balance dogma and dollars. If you would like to learn more about how your specific needs may fit within a faith-based investing approach, reach out to us today.