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Value vs. values

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Money

Value vs. values

An interlinked society makes ‘socially conscious’ investing complicated

Should Christians emphasize “value” investing (making investing decisions around the economic value of a given investment opportunity) or “values” investing (buying stock only in companies that meet Biblical moral criteria)—and if the latter, which criteria to emphasize?

In decades past many Bible Belt believers just said no to tobacco, alcohol, or gambling stocks. Recently on the left, “socially conscious” investing has grown, largely centered on environmental objectives such as avoiding fossil fuel companies. Now, new attempts to market ETF’s (exchange-traded funds that look and feel like a stock but are actually a basket of hundreds of companies) are excluding companies that have any degree of participation in abortion, pornography, or LGBT support.

In the abstract, “values” investing—investors become more conscientious about their portfolios—is a very good thing. Christians should value Christian entrepreneurship. Christians with the means to invest in innovative enterprises can do great work (within particular risk profiles and circumstances) by supporting wealth creation from the ground up.

Economic reality in an interlinked society, though, is complicated. It’s important to understand that a buyer of a stock or fund or ETF is not giving money to the company in question: The money is going to another individual who owns the same. Stockholders trade in secondary markets with each other: The real way in which people actually put money in the pockets of a company is through being a customer, not an investor.

Investing only in companies that have employee benefits policies we like, or avoiding the opposite, does not avoid sin or troublesome values. Unless an ETF or fund manager wants to avoid companies that have counterparties, or vendors, or banking relationships with those that cannot meet the same “Biblical standards,” we still live in a fallen world and cannot avoid commerce with unbelievers even if we try.

After all, regarding LGBT issues, more than 9 out of 10 Fortune 500 companies now have nondiscrimination policies that include “sexual orientation,” and more than 4 out of 5 include “gender identity.” It would be hard to find a company that doesn’t do some business with that vast universe.

Regarding the movement for institutionalized “values” investing, caveat emptor: Let the buyer beware, or at least ask hard questions. What exactly are the values that determine eligibility? How are those monitored? How stringently are they enforced? For example, there is a difference between having employee benefits and propagandizing for an LGBT lifestyle, so investors should ask where an ETF is drawing the line. Any lack of specificity and clarity warrants additional investigation.

The bottom line about bottom lines is that markets involve sinful men and women. The Biblical directive to be wise stewards of capital, and the lesson of the parable of the talents itself (Matthew 25), tells us that investing criteria should start with the basic realities of risk and reward. Investors should be thoughtful and discerning, operating within their own consciences (as Romans 14 teaches) and with a true sense of Christian freedom and reality.

—David L. Bahnsen is managing director of a national wealth management group

Comments

  • Ben K
    Posted: Mon, 03/20/2017 06:29 pm

    Unique content and helpful. Thank you!

  • socialworker
    Posted: Mon, 03/27/2017 08:38 am

    I think it's a heck of a lot more important how you bless the Kingom with what profits you make than that you can brag about how conscientious you are about your stock profile.

  • Steve Shive
    Posted: Sun, 04/09/2017 06:11 am

    These are some good thoughts. Thanks, but s missing element that I rarely here is what I call Diversification 101 and is based on:

    "’Don't store up treasures here on earth, where moths eat them and rust destroys them, and where thieves break in and steal.  Store your treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal. Wherever your treasure is, there the desires of your heart will also be.’”

    Sounds simplistic doesn’t it? Sounds too good to be true.

    Is this not more reliable than any stock market analyst’s, or investment counselor’s advice? This is from the Lord of the Universe. The one who holds the worlds together.

    So as you look at your investment portfolio consider his words. Whether you only have money under a mattress  or in a Savings and Loan, or some stocks, or CDs or 401k, Roth or whatever why not consider a percentage going into “Futures”!

    He is the One Who holds the future in His hands. Investing in heaven means supporting Missions. Support  missions organizations that both provide services to help people help themselves AND help them get their spiritual lives on track with their Maker.

  • KRportland
    Posted: Mon, 04/10/2017 04:33 pm

    My personal rule of thumb when given the opportunity to invest is "Don't invest in a company whose basic business model relies on addiction.". 

  • Wakefield Hare
    Posted: Tue, 06/20/2017 02:55 pm

    "The real way in which people actually put money in the pockets of a company is through being a customer, not an investor."

    The most direct way in which people put money in the pockets of a company is through besing a customer. However, being an investor does give support to a business, even if it is indirect. Businesses need access to capital to carry out their mission, and the less captial supplied to them, the more expensive their cost of doing business. If their cost of capital rises too high, they go out of business. So investors, whether owner or lenders, can and do influence the success, or failure, of a business.

    That said, and as Mr. Bahnsen points out, there is not possible way to keep a portfolio "sin-free". For example, if Hobby Lobby, a well-known Christian owned and operated company, was publically traded, it would be held by most Biblically responsible investors. The company explictly and consisently takes stands for Biblical truth. However, they primarily offer products that are non-essential to human sustenance (home decor, gifts, hobby goods, etc.). How does buying an extra Christmas wreath for my house line up with any of Matthew 25. The case can easily be made that it's a store that fosters pride, vanity and greed.

    I don't say that to cast a stone at Hobby Lobby or it's shoppers...my family certainly can't cast stones because we are guilty. I make that example to show how unachievable sinless, or Biblically pure, investing truly is. 

    I think if we were to set a standard we would have to attempt to direct capital to the companies believed to be having the deepeset eternal impact on humans. And consider this: some of the companies that allow for deep, eternal impact through putting trust in Jesus Christ may not even be overtly Christian, or Christian at all. Alphabet (Google) and it's products have had an incredible impact on people by creating access to God's truth online through search, but it's certainly not a Christian company. 

    The other consideration is that those who do attempt to compile portfolios of Biblically responsible companies have management fees that exceed industry averages, often by a lot. 

    I am not against Biblically Responsible Investing. In fact, I think the discourse about how we use all our resources, or put them to work, should be strong and continuous. But I think many people have been led by marketing to believe they are earning God's favor by placing assets into BRI stocks/funds. We all need the continual reminder that God's favor upon us can only be restored by repentance and belief in Jesus as God's son.