When faith is at the forefront of someone’s life, it seeps into their actions, habits and decisions.
Yet somehow, investing has long been the outlier for many who have been led to believe that it is not possible to align one’s values and principles with their investment decisions without compromising overall performance.
But at GuideStone, we don’t agree with that stance. We believe that a faith-based investment approach can transform both an investor’s portfolio and conscience for the better.
Why Discuss Faith-Based Investing?
An investor should have the opportunity to craft their portfolio in a way that successfully reflects their personal values if they so desire. Yet we often find that many investors are not even aware of their faith-based investing options because advisors are not broaching the subject with them.
It is time to rethink faith-based investing, shifting from the idea that it is an out-of-date, pious stance against aspects of society to a positive reflection of passions, values and principles. Faith-based investing can range in an investor’s profile, reflecting their passions, values and principles and taking the form of ESG investing, socially responsible investing, values-based investing, impact investing and so on.
Why Now?
A variety of recent studies and surveys show that investors care deeply about where their money is going and whether it aligns with their personal beliefs. So, it is your responsibility as the advisor to educate your clients as to why faith-based investing could be a fit for their portfolio.
In fact, according to Natixis Investment Managers, 76 percent of investors say it is important to know their investments are doing social good. Seventy-eight percent of investors say there are companies they do not want to own because they violate their principles. And lastly, 77 percent claim that if a company had negative ethical or environmental issues, they would sell the stock.
At the same time, advisors should understand and stress that faith-based investing still allows investors to receive a return on their investments. Historical stock market averages align with faith-based investing performance, meaning that investors don’t have to sacrifice portfolio yields to invest in companies they can stand behind.