Value vs. values

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