How should my faith affect my finances?
“Is Biblically Responsible Investing the same thing as boycotting companies I disagree with?”
People who are concerned with the consequences of their actions (and purchases) have been asking that question for a long time. In short, the answer is “no.” But why they are different is not immediately obvious to many.
Are you an Owner or a Customer?
The difference between boycotting a company and screening potential investment in a company comes down to a question of ownership. If you are a consumer of a company’s products, you buy a certain item to meet a specific need or desire in your life. You might buy a chair to sit in, or a car to get you from home to your office, or a pizza to feed your family. You probably choose the selection that works best for you, and profits from your purchase go back to the owner (after the cost of production and distribution). You make no decisions on where the company expands, which products they offer, or which causes they support with their philanthropy. You simply exchange money for a chair, a car, or a pizza.
If you own stock in a publicly traded company, you are, in fact, a fractional owner of that company. You can receive dividends based on the company’s profits. If business is good for the firm, the value of the stock increases as the company prospers, and you can sell your ownership for a higher price. By voting your shares by proxy in the company’s annual meeting, you choose the leadership that will make decisions for the company. When the company wins, your profits increase. When the company does poorly or falls out of favor in the public eye, your shares could lose value. You exchange your money for a piece of the company rather than a slice of pizza.
How boycotting and screening investments are similar
While these two choices – boycotting or screening investments – are different, there is one similarity. In both cases, you will have a bigger impact if you are working with people who are taking the same action for the same reason. Companies will sometimes change policies in response to a boycott of their products or services, or boycotters might at least feel a sense of solidarity with others if they don’t change.
How stock screening is different from boycotting
Screening companies before investing in them is considerably different, because owning a company is different from buying a product or service. When you own a company, you benefit from their sales. If you invest in a car company, the value of your stock is maintained or increased, however slightly, every time someone buys one of their cars. If you invest in a soft drink manufacturer, your value rises as more soft drinks are sold. When you’re in favor of their product, that’s a win-win.
But what if you’re not in favor of the products or services involved? What if you invest in a healthcare company, and your stock benefits every time an abortion is performed? What if the industry-diverse corporation you choose includes a number of casinos? Every time “the house wins” and another family is harmed by gambling addiction, your stock value also increases. Or what if the company you invested in produces merchandise using child labor in a faraway country? While this practice can reduce costs and increase the company’s bottom line, it’s hard to imagine many Christians who want to support that endeavor.
But investment screening goes beyond that. Our team at Beacon Wealth Consultants also examines potential investments for their philanthropic involvement. Does the company donate to pro-abortion causes, to those that are antagonistic to traditional family values, or to those that oppose Christian organizations or values? Few individual investors can explore potential investments to that degree.
How do I screen my stocks?
The catch is that, even if you had unlimited time to study stocks, most large companies don’t publicize everything they do. It’s nearly impossible for an individual investor, no matter how astute, to research each company in their stock or mutual fund portfolio. That is the problem Beacon’s Biblically Responsible Investing approach is intended to solve. On behalf of our clients, we screen every potential investment for involvement in abortion, pornography or “adult entertainment,” activities that are detrimental to families, human trafficking or child labor, and other questionable practices. We use about 200 screening criteria in all. Going beyond that, we also seek out “Shining Light” companies – those that are exemplary in their God-honoring use of their business.
To boycott or to screen investments?
Should you boycott products that you believe are detrimental to you, to society, or to your faith? That’s not a question for Beacon to answer. Your buying choices are between you and God. We can’t see any harm that comes from avoiding products that you feel are inconsistent with your faith and priorities. But we will be the first to tell you that many in our firm started out in the traditional investment industry, not understanding the impact that our financial investments have on questionable activities. We’re now “all-in” with Biblically Responsible Investing, and we’re excited every time another investor sees that their assets can be used for biblically consistent purposes.
Would you like to talk with someone about Biblically Responsible Investing? It’s our favorite subject, so let us know! You can send a message here, or call us directly at 540-345-3891. We will even screen your current portfolio for free so you can see what you’re invested in. And stay in touch with us by liking or following us on Facebook or LinkedIn. We’d love to get to know you!
Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc., an Investment Advisor registered with the U.S. Securities and Exchange Commission.