If you have never come across the term faith-based investing, you might be wondering when religious centers such as churches started issuing out shares. Well, wonder no more because religious organizations are still non-profit based, and you’ll wait forever to ever buy shares from them. However, that doesn’t wholly alienate religion from money and investing.
This article will open you to faith-based investing. What it’s and how you can successfully invest in a faith-based investment like kofcassetadvisors.org. Keep reading to learn more.
What is Faith-Based Investing?
Long gone are the days when investing was only about growing your money. Cultures have evolved, new religions have come up, and people have different values. As a result, more and more people want to express their values even through their investments. This implies that investors are increasingly demanding that corporations increase their money in ways that are consistent with their principles. Therefore, this has created an investing strategy known as value-based investing. Faith-based investing falls under this system of investing.
Faith-based investing is whereby an investor chooses a company or organization to invest in based on their religious beliefs. The religious views and ideals of the firm must coincide with those of the investors. Different firms provide faith-based investing options for many religions, including Christianity, Catholicism, Protestantism, Islam, Jewish, and Buddhist, to name a few.
However, other than religious beliefs, faith-based investing also factor in an individuals’ social and political views. For example, suppose the investor is big on environmental conservation and mitigating climate change. They may not invest in a company that’s known to pollute the environment, for example, through improper waste disposal.
Note that the responsibility of evaluating an investment doesn’t only fall with the investor. Once you, as an investor, identify a company that aligns with your values, it’s the company’s work to make sure all the investments for your money align with your beliefs. Therefore, no matter how profitable an investment opportunity may be, if it doesn’t alight with your religious, social, and political beliefs, it can’t be implemented.
However, that doesn’t mean that the faith-based investment strategy is riskier or less profitable than traditional investment.
Now that you know what faith-based investment is, here’re tips that will help you invest successfully with this strategy:
1. Research On Investments That Align With Your Religious Beliefs And Values
You want to make sure that your investments decision reflects your values. Otherwise, you’ll have to constantly check your investment if you’re unsure about a company’s principles.
Additionally, the success of a faith-based investment is measured by gained profits and upheld religious beliefs and values. Therefore, the first step is identifying companies that will help you with these two factors. Where do you start?
Well, you have the option of manual research. For example, look out for faith-based funds, then find out in which companies they invest in. This is one of the easiest ways to identify organizations or companies that are likely to align with your values. This is because most faith-based funds are invested in companies that meet a given moral and ethical threshold.
Alternatively, you can base your research on companies’ annual reports and Environmental, Social, and Government values. Once you know what values a company swears by, it’s easier to decide if they match your values. If manual research doesn’t work for you, consider using a screener.
2. Use A Screener
A successful investment consumes less time and yet still yields great profits. One of the ways you can reduce the time and effort used in manually searching for an ideal faith-based investment company is by using screening tools.
The majority of screening tools may be available on the Internet. These tools function by sifting through the many faith-based investing possibilities, comparing them against your values and beliefs, and providing feedback on which company best fulfills your requirements. Remember, even within religious institutions, preferences on values differ. For example, you may not want to invest in a company that upholds Roman teachings in Christianity.
Other than an online screener, you can hire a screening company. The benefit of using professionals instead of an online tool is that you can always consult with the professionals as many times as possible. Consulting helps you understand your investment decision better. Therefore, you’re better informed to either question, decline, or accept a given investment move in the future. The more informed you’re, the better your moves and the more the chances of a successful investment.
3. Invest In a Company That Meet Your Financial Needs
While faith beliefs and values are important in this type of investment, your financial goals are equally vital. One can’t come at the expense of another.
Experts recommend that you start by identifying your financial goals. What are your reasons for investing? Are they high or low risk? Do you need a big return on investment (ROI), or are you okay with low ROI? For example, if you’ll need the money, you just invested the following year, investing in a company with a stock-heavy portfolio may not meet your financial needs. This is because your money may not make as much with stocks. Therefore, you want to consider your financial goals and invest in a faith-based investment that meets them with ease.
4. Hire A Financial Advisor Versed With Faith-Based Investing
Hiring a Financial Advisor isn’t enough. You want to make sure that your advisor understands faith-based investing. This is particularly true given the scarcity of advisers who specialize in faith-based investment.
A good faith-based financial advisor will help you design a financial profile that meets your financial needs while still honoring your beliefs. They can also help you identify investments that are likely to be successful, which is part of your ultimate goal.
5. Track The Fees And Returns
For a long time, Exchange Traded funds (EFT) or faith-based investments using mutual funds attracted very high fees. This meant that subtracting the expense ratio reduced your net returns. With such an arrangement, based investment was generally not as profitable.
However, this is slowly changing. The expense ratio for faith-bad investment has been declining gradually. That’s why it’s important to keep a record of your investment fees. If the fee is too high over time, you may seek the advice of your financial advisor to find alternative investment options.
Bottom Line
If you have been wondering where to start with your faith-based investment, the five tips discussed in this article will come in handy. Applying them creates a better chance of excelling in your investment. All the best!
