Investing According to Your Values

Question of the week:I'm just starting to invest and I really want to do it according to my religious values. I've never seen much information on how to do this. What are your suggestions for how to go about it? --M.T.

Dear M.T.,

Even though you don't hear much about it, there are actually plenty of people who pay a good deal of attention to their faith when they make financial decisions.

According to a recent study by MMA Praxis Mutual Funds, 80 percent of investors surveyed consider themselves to be religious or spiritual. Of these, two-thirds would consider changing investments based on their values and beliefs. And the survey also found that the five most important concerns of these investors are the operation of sweatshops, product safety records, high executive compensation, environmental records and adult entertainment.

When we asked members of the Armchair Millionaire community about religion and their money, we certainly heard all kinds of responses. Here are just two:

Values beat fundamentals. "I consider it my responsibility to manage my God-given resources wisely. When considering investing vehicles, I do reject those companies that contradict my moral values--regardless of how great their fundamentals are." --A. Rodriguez

Don't need to be religious to tithe. "Although I don't formally practice any religion, I do give 10 percent of my income to my favorite charities and non-profit organizations." --Mysticaltyger

Whether you would like to avoid investing in companies whose practices you dislike, or use your investments to influence the way companies do business, you have a number of different ways to invest according to your faith. My guide provides the basics.

The Armchair Millionaire's Guide to Faith-Based Investing

• Choose stocks that match your values. Like companies that donate back to the community, that support your favorite cause, or that produce goods and services you believe in? Help ensure their success by investing in them.
• Choose funds that match your values. If you'd rather invest in mutual funds than bother with individual stocks, there are a number of different ones available that invest in accordance with defined religious, social and/or environmental guidelines. You can find more information on these faith-based and socially responsible mutual funds at www.socialfunds.com.
• Engage in shareholder activism. Some investors choose to try to influence company policy by submitting and voting on corporate proxy resolutions. There are a number of organizations devoted to changing the way companies do business from the inside out. One is the Interfaith Center on Corporate Responsibility (www.iccr.org), a coalition of 275 faith-based institutional investors. Another is the Shareholder Action Network (www.shareholderaction.org), which serves as a clearinghouse of information for faith-based groups, and social and environmental organizations involved in shareholder activism.
• Get like-minded advice. Some financial advisors specialize in helping their clients choose investments that are aligned with their values. You can locate one through the directory located at www.socialfunds.com.

THE BOTTOM LINE: Even if you think that money is the root of all evil, that doesn't mean you can't use it to do some good while reflecting your deepest values.

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choose to try to influence company policy by submitting and voting on corporate proxy