David had been a Christian for fifteen years, but he'd never thought about whether his investments aligned with his faith. That changed the day his pastor asked a simple question during a sermon: "If Jesus were managing your investment portfolio, what would He choose?"
That question launched David on a journey to understand biblical investing – discovering that faithful stewardship extends beyond just how much we give and save, but also includes how we grow our resources and what companies we support with our investment dollars.
"I realized I had been unintentionally funding companies whose practices contradicted my values," David reflects. "Making the switch to ethical investing didn't just align my portfolio with my faith – it gave me peace of mind and actually improved my returns."
The Biblical Foundation for Investing
Some Christians wonder if investing is biblical at all. Shouldn't we just trust God to provide? The answer lies in understanding what Scripture teaches about stewardship and the parable of the talents:
The Parable of the Talents
"Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things."
Wise Planning
"The plans of the diligent lead to profit as surely as haste leads to poverty."
In the parable of the talents, Jesus commended the servants who invested their master's money and made it grow. The servant who buried his talent was rebuked for being "wicked and lazy." This suggests that wise investing is not only permissible but expected of faithful stewards.
Biblical Truth
Investing is biblical stewardship when done with wisdom, integrity, and alignment with God's values. The key is ensuring our investment choices reflect our Christian principles while building resources for our families and future generosity.
Understanding Ethical and Faith-Based Investing
Ethical investing (also called ESG - Environmental, Social, and Governance investing) screens investments based on moral and ethical criteria. For Christians, this means avoiding companies whose practices contradict biblical values while supporting those that align with our beliefs.
Common Christian Investment Screens
Typically Excluded
- Alcohol production
- Tobacco companies
- Gambling operations
- Adult entertainment
- Abortion services
- Companies with poor labor practices
- Weapons manufacturing (some screens)
Often Preferred
- Healthcare and medical innovation
- Education and learning
- Clean energy and stewardship
- Fair trade and ethical labor
- Community development
- Technology improving lives
- Financial services helping families
Types of Christian Investment Approaches
Approach: Excludes companies or industries that conflict with Christian values.
Example: A fund that owns all S&P 500 companies except those involved in alcohol, tobacco, gambling, and adult entertainment.
Pros: Simple to understand, widely available, maintains broad diversification.
Cons: May miss opportunities to support positive companies.
Approach: Actively seeks companies that align with Christian values and positive social impact.
Example: Investing in companies known for excellent employee treatment, environmental stewardship, and community support.
Pros: Supports companies doing good work, potential for strong returns from well-managed companies.
Cons: May have higher fees, smaller investment universe.
Approach: Invests in companies or funds specifically designed to create positive social or environmental impact alongside financial returns.
Example: Microfinance funds that provide small loans to entrepreneurs in developing countries.
Pros: Direct positive impact, alignment with Christian mission of helping others.
Cons: May have lower or more volatile returns, limited options.
David's Journey to Ethical Investing
Let's follow David through his transformation from conventional to ethical investing, and see how it impacted both his portfolio and his faith:
The Starting Point
David's original portfolio looked like many Americans': a mix of low-cost index funds in his 401(k) and some individual stocks he'd picked based on tips from friends. He had never considered what companies he actually owned or what they did.
David's Original Portfolio
- S&P 500 Index Fund - 60%
- International Index Fund - 20%
- Individual Tech Stocks - 15%
- Bond Index Fund - 5%
The Problem: These broad index funds included companies involved in alcohol, tobacco, gambling, and other industries that conflicted with his values.
The Research Phase
David spent three months researching Christian investment options. He discovered several approaches and found that ethical investing had come a long way in recent years:
"I was surprised to learn that many faith-based funds actually outperformed their conventional counterparts over the long term. Companies with strong values and good governance often make better long-term investments."
The New Portfolio
After careful consideration and prayer, David restructured his portfolio to align with his Christian values:
| Investment | Allocation | Christian Screening | Focus |
|---|---|---|---|
| Faith-Based Large Cap Fund | 40% | Excludes alcohol, tobacco, gambling | US Large Companies |
| ESG International Fund | 20% | Environmental & social screening | International Developed Markets |
| Impact Bond Fund | 15% | Funds community development | Fixed Income with Purpose |
| Individual Christian Companies | 15% | Companies with Christian leadership | Direct Faith-Based Investing |
| Cash/Emergency Fund | 10% | Credit union savings | Liquidity & Security |
The Results
Two years later, David's ethical portfolio had delivered both financial and spiritual returns:
8.7%
Annual Return100%
Values Alignment$2,400
Impact Investment ReturnsPeace
Of MindPractical Steps to Build Your Ethical Portfolio
Step 1: Define Your Values
Before choosing investments, clarify which industries and practices you want to avoid or support:
Values Assessment Questions
- Which industries conflict with my Christian beliefs?
- What types of companies do I want to support?
- How important is environmental stewardship to me?
- Do I care about companies' labor practices?
- Am I willing to sacrifice some return for values alignment?
- Do I want to make a direct social impact with my investments?
Step 2: Research Your Options
Explore different types of ethical investment vehicles:
Mutual Funds
Professionally managed funds with Christian or ESG screening
ETFs
Exchange-traded funds with ethical screening, typically lower fees
Individual Stocks
Direct ownership in companies that align with your values
Step 3: Evaluate Performance and Fees
Ethical investing doesn't mean accepting poor returns. Compare performance and costs:
Performance Reality Check
Studies show that many ESG and faith-based funds perform as well as or better than conventional funds over the long term. Companies with strong values often have better management and more sustainable business practices.
Step 4: Start Your Transition
You don't need to change everything at once. Consider a gradual transition strategy:
- New contributions first: Direct new investment dollars to ethical options
- Replace as you rebalance: Gradually shift during normal portfolio rebalancing
- Consider tax implications: Be mindful of capital gains in taxable accounts
- Track your progress: Use tools like portfolio tracking to monitor your transition
Common Concerns About Ethical Investing
Historical data shows that many ethical funds perform as well as conventional funds. Companies excluded by ethical screens (tobacco, gambling) haven't necessarily been top performers. Meanwhile, companies with strong ESG practices often have better long-term prospects.
Bottom line: You may actually improve your returns while aligning with your values.
Modern ethical funds still hold hundreds or thousands of companies across many industries. While some sectors are excluded, you maintain broad diversification across the companies that align with your values.
Strategy: Use a mix of domestic and international ethical funds to maintain global diversification.
Some faith-based funds do have higher fees due to the additional research required for screening. However, many ethical ETFs now have fees comparable to conventional index funds (0.2-0.6%).
Tip: Compare total costs and remember that paying slightly higher fees for values alignment may be worth it for your peace of mind.
Yes! When millions of Christians invest ethically, it creates market pressure for companies to improve their practices. Additionally, ethical investing ensures you're not personally profiting from activities that contradict your beliefs.
Remember: Stewardship includes being intentional about how your money grows, not just how you spend it.
Christian Companies Worth Considering
For those interested in individual stock investing, here are some publicly traded companies known for Christian leadership or values-aligned practices:
Companies with Christian Leadership
- Chick-fil-A (Private) - Closed Sundays, supports Christian causes
- Hobby Lobby (Private) - Strong Christian values in business
- ServiceMaster - Historic Christian business principles
- Tyson Foods - Faith-based company culture
Note: Always research current leadership and practices before investing.
Values-Aligned Industries
- Healthcare - Companies serving human health and dignity
- Education - Supporting learning and development
- Clean Technology - Environmental stewardship
- Community Banking - Serving local communities
Research individual companies within these sectors for best alignment.
Building Your Ethical Investment Strategy
The Foundation Portfolio
Here's a sample Christian investment portfolio that balances values, diversification, and growth potential:
Sample Christian Portfolio Allocation
Core Holdings (70%)
- Faith-Based US Stock Fund - 40%
- ESG International Fund - 20%
- Faith-Based Bond Fund - 10%
Targeted Investments (30%)
- Individual Christian Companies - 15%
- Impact Investment Fund - 10%
- Cash/Emergency Fund - 5%
Adjust allocations based on your age, risk tolerance, and time horizon.
Monitoring and Rebalancing
Use tools like portfolio tracking to monitor your ethical investments and maintain your target allocations. Review your holdings annually to ensure they still align with your values.
The Spiritual Benefits of Ethical Investing
David discovered that aligning his investments with his faith brought unexpected spiritual benefits:
Peace of Mind
"I sleep better knowing my money is supporting companies that align with my values, not funding activities I oppose."
Integrated Faith
"My faith now touches every area of my finances. I'm not compartmentalizing my Christian beliefs anymore."
Learning Opportunity
"Researching ethical investments taught me more about business and stewardship than I'd learned in years."
Conversation Starter
"It's opened up great discussions with other Christians about faith and money. I've helped several friends start their own ethical investing journey."
Your Ethical Investing Action Plan
Start Your Ethical Investment Journey
- Pray for wisdom: Ask God to guide your investment decisions
- Assess current holdings: Review what companies you currently own
- Define your values: List industries to avoid and support
- Research options: Explore faith-based and ESG funds available to you
- Start tracking: Use portfolio tools to monitor your investments
- Make gradual changes: Transition new money first, then rebalance existing holdings
- Share your journey: Encourage other Christians to consider ethical investing
Remember: This Is Stewardship in Action
Ethical investing isn't about perfection – it's about intentionality. When you align your investments with your values, you're practicing faithful stewardship of God's resources while building wealth for your family's future and the kingdom's work.
"For where your treasure is, there your heart will be also." - Matthew 6:21