5 Things Christian Financial Advisors & Their Clients Should Know About Faith-Based Investing
If Jesus is really Lord of all, then he is Lord of finance. However, all too often Christians who work in finance fail to think deeply about how to apply their faith to their financial services and the clients can be left without guidance about how the Bible might affect not just personal financial planning decisions such as problems with idolatry of money, excess spending, and the dangers of debt, but also how it might affect the investment portfolio itself.
- All investing is in some sense faith-based investing, because everyone has a faith. Muslims have faith in Allah as described in the Quran. Christians have faith in Jesus. Secularists have faith in human reason as the ultimate authority. There is no neutrality – all human activity, including investing, is based on a faith, even if that faith is not explicitly acknowledged.
- We’ll focus here on Christian faith-based investing, because Christianity is the only true faith, and therefore the only proper basis for investing. It should inform both personal behavior and business practices. On the personal front, Christians working in investment are obligated to work to the glory of God, with excellence and honesty and within the confines of the Biblical moral codes by, for example, refraining from stealing, lying or adultery. Positively, all aspects of Christian investing, motivation, prudence, excellence should glorify God.
- Because there are widely available materials about Christians’ personal behavior, we will focus on Christian faith-based business practices, as opposed to personal practices, in portfolio construction.
- The objective of portfolio management is to get a good return, to increase rather than waste or lose asset values. Decisions about how to invest for a good return are largely a matter of wisdom and prudence. Some embrace an approach based on academic consensus such as modern portfolio theory. Others look for advice from the most respected or credentialed experts. My personal approach is based on something we call ‘principled reasoning’. And material about principled reasoning is already available here. Christians can quite reasonably disagree on such matters of prudence, such as valuation vs. momentum strategies, cap-weighted passive investing vs. active investing vs. rules-based investing, the role of sentiment vs. fundamentals, diversification vs. concentration, etc.
- In order to get a return, one must venture out into investment markets. Markets, like all human endeavors, are infected with sin, which means that Christians who work in investment must contend with issues of morality in the markets.
Next in the series we’ll get a little deeper into the moral dilemmas which come about from investing in markets given that there is no place in the world without sin. We’ll look at some important things that both Christian financial professionals and the folks they serve need to know about that.
Jerry Bowyer is a Forbes contributor, contributing editor of AffluentInvestor.com, and Senior Fellow in Business Economics at The Center for Cultural Leadership.
Jerry has compiled an impressive record as a leading thinker in finance and economics. He worked as an auditor and a tax consultant with Arthur Anderson, as Vice President of the Beechwood Company which is the family office associated with Federated Investors, and has consulted in various privatization efforts for Allegheny County, Pennsylvania. He founded the influential economic think tank, the Allegheny Institute, and has lectured extensively at universities, businesses and civic groups.
Jerry has been a member of three investment committees, among which is Benchmark Financial, Pittsburgh’s largest financial services firm. Jerry had been a regular commentator on Fox Business News and Fox News. He was formerly a CNBC Contributor, has guest-hosted “The Kudlow Report”, and has written for CNBC.com, National Review Online, and The Wall Street Journal, as well as many other publications. He is the author of The Bush Boom and more recently The Free Market Capitalist’s Survival Guide, published by HarperCollins. Jerry is the President of Bowyer Research.
Jerry consulted extensively with the Bush White House on matters pertaining to the recent economic crisis. He has been quoted in the New York Times, The Wall Street Journal, Forbes Magazine, The International Herald Tribune and various local newspapers. He has been a contributing editor of National Review Online, The New York Sun and Townhall Magazine. Jerry has hosted daily radio and TV programs and was one of the founding members of WQED’s On-Q Friday Roundtable. He has guest-hosted the Bill Bennett radio program as well as radio programs in Chicago, Dallas and Los Angeles.
Jerry is the former host of WorldView, a nationally syndicated Sunday-morning political talk show created on the model of Meet The Press. On WorldView, Jerry interviewed distinguished guests including the Vice President, Treasury Secretary, HUD Secretary, former Secretary of Sate Condoleezza Rice, former Presidential Advisor Carl Rove, former Attorney General Edwin Meese and publisher Steve Forbes.
Jerry has taught social ethics at Ottawa Theological Hall, public policy at Saint Vincent’s College, and guest lectured at Carnegie Mellon’s graduate Heinz School of Public Policy. In 1997 Jerry gave the commencement address at his alma mater, Robert Morris University. He was the youngest speaker in the history of the school, and the school received more requests for transcripts of Jerry’s speech than at any other time in its 120-year history.
Jerry lives in Pennsylvania with his wife, Susan, and the youngest three of their seven children.