The Connection Between Investing and our Values

The first time my family moved to Kenya and I experienced interacting with street kids in Nairobi, I was 10-years-old. It was a year of intense learning for me. I learned what it meant to be a minority and to be treated very differently because of my white skin. I also learned that I was wealthy, by comparative measures. I still recall the first time a young Kenyan boy, about the same age as me, came up to me and asked for money. And, although I was only ten, and didn’t have a job, I did have some spending money in my pocket and I had a choice to make. In my developing understanding of the world around me, I began to realize that capital has influence. I suppose that moment in Nairobi could have been the starting point for my now decades-long quest to connect money with meaning, and capital with positive impact. You might expect me to tell you next that I also was called into overseas missions, like my parents before me, or started a micro-lending organization to help women in Africa start cottage industries. But God has called me into the financial services industry instead, to serve as a professional advisor to the wealthy, and to do what only a few advisors are willing to do for the affluent: tell them the truth about the connection between their investing and their values.

It is with that unique viewpoint of one who has had a front row seat to both extreme poverty and expansive wealth that I humbly ask for your attention on a widely overlooked opportunity.

According to the Faith-Driven Investor movement, “It’s estimated that Christians manage over 150 trillion dollars, more than half the world’s wealth. That’s 200 to 300 times greater than what is given philanthropically each year.”

Capital has influence, yet many of us have been content to let others determine our investment strategy, or to broadly invest in indexes, not even knowing what companies we own in our investment portfolios. Even worse, if we are passive in this area, we are most certainly (unwittingly) giving capital companies that advance causes we oppose like gambling and pornography.

This is a problem. But I encourage you not to think of it merely in terms of breaking Christian rules of morality. Yes, I believe that when we invest unintentionally, we are not being wise stewards with The Master’s “talents” while he is away and we are probably investing in the campaigns of his enemy, buying funds full of companies that *steal, kill, and destroy *in one way or another…all neatly hidden inside of a pleasant-sounding mutual fund wrapper: The XYZ Growth and Income Fund. But even more than being passive participants in bad business, we’re missing an enormous kingdom opportunity. Faith-Driven Investor again sums it up nicely, “We aren’t owners, we are stewards of the resources that God has given us. This knowledge should radically change the how, where, and why behind our investment strategies. Imagine the impact that would occur when all Christ-following investors—from the rich young ruler to the widow and her mite—use investment capital to deliver community impact, spiritual integration, and financial return. We can take what God has given and put it back into the work He is doing on earth by promoting products and services that further human flourishing. It’s already happening.” – Faith Driven Investor

As a Certified Kingdom Advisor™ and a Certified Financial Planner™ professional, I’ve worked with hundreds of Christian investors over my 18-year career in financial services. I’ve seen inspiring dedication to charitable giving from many of them, even sacrificing their own needs and wants to participate in Kingdom-advancing work around the globe. Some of them have homeschooled their kids for the sake of building Christian values and character into the next generation. Others have taken lower-paying jobs or scaled back their businesses in order to honor God and the priorities of family and Sabbath rest that stem from their sincere faith. Several of them have participated in a company boycott or letter-writing to political leaders. But I’ve had only a small handful of prospective investors seek me out because of their desire to align their investments with their Christian values, and that is the area of expertise for which I’ve become known.

I think most Christian investors share a couple of significant concerns with this idea and I’d like to address the biggest one briefly here, and then invite those who are interested to learn more through a 2-part webinar series that I will be teaching, along with my co-presenter, Jason Myhre of Eventide, a fellow thought leader in the faith-driven investing movement. The top concern is usually performance.

Let’s answer the question, “What will it cost me (in the form of a lower rate of return) to align my investments with my Christian values?” Many Christian investors worry that if they really want to invest with their integrity in-tact, by eliminating companies and industries that do harm (like pornography, gambling, tobacco, etc.) and intentionally seek companies that are creating valuable, positive goods and services that promote human flourishing, there won’t be many attractive investments from which to choose.

To address the effect of exclusionary screening (taking out the negative stuff) on performance, I think this study from the BRI Institute does a great job of presenting data in an unbiased manner (which is difficult to find in a world where nearly every academic study is tied to an agenda). It also uses a conservative interpretation of Christian values (meaning more companies would have been removed from this sample than many other faith-based investment companies would remove with their less restrictive approaches). So, this may give us a worst-case scenario of sorts, where we are excluding a larger number of potentially profitable companies, purely for ethical reasons.

As you can see from the chart, looking back from 1/1/2000 to 12/31/2019, a 20-year time period, both the “BRI Screened Portfolio” and the S&P 500 benchmark have an identical 6.19% annualized return. While there were shorter time periods where one or the other outperformed, by the end of the sample 20-year period, they were literally neck and neck.

Note: this does not account for the potential positive impact on performance that could stem from trying to identify positive impact companies, whom we might logically conclude should be more inclined to experience a tailwind in business by way of customer loyalty, positive reviews, referrals, etc.

As a Certified Financial Planner™ professional and a Certified Kingdom Advisor™, I have a duty to act in a fiduciary capacity with my clients and to put their interests ahead of my own. And, while I cannot make specific investment recommendations for you here, in my professional opinion, I believe this style of investing has merit as an investment strategy, in addition to the benefits of contentment, joy and sense of wholeness one might achieve from alignment with one’s values. A World Shaped by Intentional Christians

I want to encourage you to think of something that’s perhaps more powerful than getting a good return on your investment. Imagine with me what might be possible, and how much positive influence we might achieve together if every believer invested intentionally, acting in unity.

• What if every one of those 150 Trillion Christian-managed dollars, invested by people just like you and me, was pulled out of the addiction-profiting, cancer-causing tobacco industry and was instead directed into biotech companies searching for a cure for cancer. Maybe the free cigarettes being routinely handed out to children at sporting events and concerts in Indonesia would dry up. (Sound too horrible to be true? Read the whole horrible story here.)

Just like I was before my first trip to Kenya, most Americans are very sheltered from the difficult daily realities in other parts of the world. But American Christians hold the lion’s share of Christian-managed investment capital. It’s our retirement funds and education savings accounts that cumulatively comprise a big slice of the total investment capital in the world. We may not always feel wealthy, but we are. Investors, and the businesses they supply capital to, must step forward with redemptive solutions to the problems that cannot be solved by governments and charities. Will you join the movement? Learn more about Rachel at Wealth Squared.