By: Cassandra Laymon, CFP, CKA, MBA
In his 2001 classic Good to Great, Jim Collins asserts that “Good is the enemy of great,” meaning that you can be doing a lot of good things, but ultimately you should be focusing all your time on the great opportunities. In a similar vein, I would like to suggest that perfect is also the enemy of great.
I will be the first to admit that I am a recovering perfectionist. It even sounds kind of silly, right? The idea that perfectionism can be such a bad thing that one needs to recover from it. In reality, perfectionism is a debilitating problem with negative consequences that can creep into all areas of your life– even how you choose to invest.
In addition to the exhaustion that results from trying to achieve an unattainable standard, there are real limitations that can result from living in a black and white world with a “If I can’t do it perfectly, I won’t do it all,” mindset. When I recommitted my life to Christ, one of the greatest gifts I was given was the understanding that, while Jesus was perfect, I am not expected to be. Jesus alone came to fulfill the law. That is what grace is all about. My one goal became to try my best to follow Jesus, knowing I would never be perfect.
In the world of Biblically Responsible Investing (BRI), perfectionism can hold us back from making great decisions that will positively impact the Kingdom. Perfectionism encourages us to have an all or nothing approach to investing – if I can’t screen a portfolio to be 100% “clean,” I’m not going to do it at all.
I speak with both investors and advisers on a regular basis, and I often hear the following arguments:
“I’m going to wait to do BRI until I can screen a portfolio to be 100% clean.”
“Every man is a sinner, and all companies are run by men, so every company is full of sin and therefore it doesn’t matter where I invest my money.”
“My investments won’t really make an impact, so it doesn’t matter where my money is invested.”
While we all strive for 100% screening, here are three reasons why I believe that you should not wait on perfection to implement BRI:
1. There simply are no perfect funds. What screens perfectly using one service may be found lacking by another (this is why we utilize three different screening data providers). By investing in funds and portfolios that are managed diligently but may not yet be up to your desired standards – you are helping to move the BRI space in a positive direction. If we show no interest in a fund before it is ideal, it’s difficult for fund companies and money managers to realize there is a market demand for their products. By taking small steps, we demonstrate encouragement and support, and we can be influencers for managers to hear our ideas about what we’d like to see in the way of screening criteria. As we start to do that, we’ll be blessed with more and more competitive products. Progress, not perfection.
“Whoever can be trusted with very little can also be trusted with much…” -Luke 16:10
2. It’s hard to meet all of the requirements for appropriate asset allocation, reasonable fees, and performance from the few funds that screen clean using a particular screening tool. Besides being biblically responsible, we also have to follow the fiduciary standards of our industry in terms of providing cost conscious and well-performing portfolios to our clients. In the case where certain style boxes cannot be filled, we look for the best screened option available in that category.
3. There are many areas of our life in which we must take the best course of action, even if the outcome is less-than-perfect. In other contexts, this “all or nothing” mindset seems silly. For instance, if I can’t insulate my house to protect from all heat loss, should I bother to insulate it at all? If everything I eat cannot be completely healthy for my body, should I even bother to monitor the nutritional value of anything? Until I completely clean up my act, why/how can I become a Christian? Of course, we want to insulate our homes and nourish our bodies and souls to the best extent possible. Likewise, investing in that which is as righteous as can be makes a big impact in our world for the better, even if we cannot screen out every single violation.
It’s amazing for me to witness the speed at which our world changes. I envision a time in the not-too-distant future where we will be making an out-sized impact in changing the business practices of the companies we invest in. I’m not going to wait for some undetermined time in the future to align my values with my investments. I’m going to do everything I can today, knowing that I’m playing my part in making our world better. Won’t you join me?