BRI or FBI, You Start With Investigation
When it comes to investing there is a level of jargon that may far surpass any other industry. On top of the standard vocabulary is a, seemingly unending, lexicon of acronyms - like IRA, RMD, BRI, and SRI, just to name a few. However, at the end of 2018, the largest organization of Christian Financial advisors in the country, Kingdom Advisors, decided to no longer use the phrase “Biblically Responsible Investing (BRI)” and would instead use the term of "Faith-Based Investing.” Much thought was put into this decision, and my goal here is not to belabor that choice.
So with “Faith-Based Investing” being the new phrase of choice, we get a new acronym to add as well! “Faith-Based Investing = “FBI” - not to be confused with the Federal Bureau of Investigation. But as I was thinking about it, I saw some connections. When we are to do Faith-Based Investing one of the primary tasks is investigating. Unfortunately, there is not a universally accepted standard for Faith-Based Investing. Subsequently, investment firms primarily use negative screens to filter out what is known as “sin stocks” - think of things like alcohol, tobacco, and gambling. Some firms dig deeper and examine the corporations’ charitable giving and connections to legal and political action. Other investment firms will add or even sometimes begin with positive screens that help identify companies that are creating value for society.
The first step on this journey for any investor is to decide what convictions they hold regarding their personal finances. I find that the Bible is an excellent place to start when seeking guidance. And, fortunately, the Bible has an awful lot to say on the subject! The following are some verses if to help you explore what scripture says about money - Ephesians 5:11, 1 Corinthians 10:31, Proverbs 16:8, Proverbs 15:16, Deuteronomy 23:18, and Matthew 25:21. These, along with other verses and resources, can help you shape your financial convictions and think more intentionally about the companies in which you invest.
Perhaps you’ve never considered it before, but if a company is involved in what is known as a “sin industry” (again think alcohol, pornography, tobacco, and gambling, etc.), are you willing to be an owner in that company? And taking it even further, do you want to drill down to the next layer and investigate how companies may be spending corporate profits to support charities or legal action to support causes that may be in direct opposition to your convictions? Or taking a more proactive approach, wouldn’t you want to own and invest in companies that are having a positive impact on society?
The second step is to investigate what you own in your portfolio. There are a few sources online that will allow you to take an inventory of what you own in your portfolio. One of the first places to get a better understanding of your investments is www.morningstar.com. To start to investigate potential conflicts between your convictions and what you own in your portfolio, you can use resources like the ones found at www.eVALUEator.com. On the eVALUEator site, near the bottom of their homepage, you can click on the button that says, “request a free report.” Another resource is www.inspireinsight.com where you can enter in the ticker symbols of the stocks, mutual funds, and ETFs that you own. These are all great tools that can help you make more informed investing decisions. There are other resources like the Christian Investment Forum and the Biblically Responsible Investment Institute that are also useful resources to learn more about what you own in your investment portfolios.
Step three involves taking all of the information you’ve received and making some decisions. Now that you know where your money is going, does it make you reconsider some of your investments? Does this newfound knowledge spur you to action? It can definitely be a bit overwhelming, so I encourage you to seek out advisors, like myself, who are working with their clients on Faith-Based Investing. The action step is definitely the most challenging step. Sadly, it’s the point where many people start to rationalize their ownership of companies that are involved in practices that are in direct opposition to their faith. Perhaps the excuses have already started in your mind…”I only own a few shares of XYZ stock.” “How much impact can my ownership in the company have?” “Are there enough companies available for investment to build a diversified portfolio?” “Who am I do draw a moral line in the sand when it comes to my investments?” - Trust me, I’ve been there! But this is where the following quote becomes important, “Obstacles can’t stop you. Problems can’t stop you. Only you can stop you.”
Action items for getting started with Faith-Based Investing
Research your convictions
Investigate what you own
Apply your conviction to your portfolio
As always, I leave you with the following question. What’s in your portfolio?