The Pax Financial Blog

Does Your Investment Philosophy Match Your Faith?

Does Your Investment Philosophy Match Your Faith?

Financial Planning, financial advisor San Antonio, Biblically Responsible Investing May 2nd, 2022 by: Darryl Lyons

Does your investment philosophy match your faith? Biblically responsible investing seeks to align all investment decisions on your core beliefs. Finding a faith-based financial advisor in Texas can serve as a trustworthy partner to facilitate and guide this precious connection. 

Use this guide to find a fiduciary financial advisor that will put your best interests first.

 

Our firm of financial advisors in San Antonio actively works to align the goals, decisions, and investments with the ideology of our clients. This article can assist in helping you decide if this is a suitable investment method for you or just something to explore.

 

Good Stewardship

There are several components to matching your investment philosophy with your faith. First, biblically responsible investors and financial advisors believe that we are all stewards supporting the greater good. As a result, we should be caretakers of the money we have and how we serve, give, and receive in the world.

Being a good steward of your finances can involve activities like: 

  • Saving for retirement
  • Having an awareness of your income and expenditures so that we prudently maintain an even keel between them
  • Managing risk through insurance and planning for the next generation through educational savings and an estate plan 
  • Setting up charitable giving to faith-based communities such as churches or other organizations

Investing in Faith-based Beliefs

Many of these activities involve investment planning and savings. All investment is guided by method, logic, or process; even the determination to get the most out of the stock market is a philosophy. But for faith-guided individuals, the core of investing ideas is to make decisions in accordance with their soul truths.

That can involve investing in businesses that practice, worship, or follow the same doctrine as you. More broadly, faith-based investors decide what stocks and bonds to invest in by screening the companies and organizations to make sure they meet their criteria.

For example, faithful investors may choose to screen out companies whose products involve alcohol, gambling, or other activities contrary to their beliefs. They may want to select companies that protect the environment or human life. 

In short, faith-based investing supports companies that act in accordance with the highest levels of servitude. In other words, how a company makes money is more important than how much it makes. Divine order can handle the details. 

Many investment professionals believe that computer sophistication has made faith-based investing easier than ever. Systems can screen out businesses that engage in activities that don’t match investors’ faith and actively select companies that engage in activities that do.

There’s an estimated $2.7 trillion invested in faith-based funds. This investing is part of a larger category of socially responsible investing, which is very similar.

Does investing in alignment with your faith mean that your investment returns will be less than those of investors who don’t use any faith-based screen? No. Your trusted financial advisor can work with you to get investment returns broadly comparable to overall returns on the stock markets.

 

How Investing Works

Financial advisors may begin with an investment philosophy that matches your faith, but they do much more. Everyone is entitled to quality, unbiased financial advice. We help your money work for you, starting with asking questions about your financial goals.

An experienced team should review what asset classes you can invest in. Most retirement portfolios are divided between asset classes of stocks, bonds, and cash asset classes. 

Stocks

Stocks generally appreciate (increase in price) the most. The S&P 500, for example, is a broad average of 500 stocks, and it has increased roughly 10% per year, on average, over the last century. That’s averaging in periodic declines in the stock market, which happen every several years. 

Investors should understand that stocks carry risk because stocks fluctuate in price.

Bonds

Bonds are a far more stable investment with minimal risk. When investors purchase a bond or bond funds, they invest in the bond itself, which returns interest. Your investment grows with interest, and the bond price itself can rise or fall depending on several factors, such as the direction of interest rates. 

While bond prices can fluctuate, their fluctuation is far less than the potential fluctuation of stocks over time.

Cash

Cash, such as savings accounts or certificates of deposit (CDs), is the most stable investment, as the underlying amount doesn’t fluctuate. When you invest in cash, you receive interest.

Your investment advisor will recommend investments that accord with your religious values within these asset classes. 

 

What Else Should be Considered? 

A reputable team will recommend a mix of asset classes suitable for your goals and age. 

For instance, when people are young, they can invest a relatively high percentage of their retirement portfolio in stocks. Why? Because if they have decades before retirement, it’s likely to return the most, and they have plenty of time to make up for any losses from bear markets (a stock market decline of 20% or more).

If people plan to retire in the next decade or less, their retirement portfolios should likely be invested much more heavily in stable asset classes such as bonds and cash versus stocks. A bear market can result in pre-retirees having much less money than they planned at retirement or even cause them to have to push out retirement. Their asset classes and overall portfolio should be managed for the stability of the principal as a result.

Financial advisors should also review your investments to ensure they continue to perform at a high level. Most advisors will discuss investment performance with you periodically (monthly or quarterly).

Depending on changing goals, priorities, and market behavior, they will also change and modify your investments. Retirement portfolios should be readjusted every year to maintain the appropriate division between asset classes.

 

Contact a Financial Advisor in San Antonio

Contact PAX for more information on getting started with faith-based investing in Texas. Read about Who We Serve.

Serving local families of the San Antonio metroplex, our Texas-based financial group is passionate about helping you live the life you have worked so hard for. With more than 100 years of combined experience, our locally owned, independent firm provides a deep commitment to helping you achieve your faithful vision of financial success. 

In providing transparency, we are fee-based and do not work on commission. We offer holistic financial assessments, services for employers, pivot retirement planning, investment management, and insurance in one location.

 

Our team is proud to embrace the faith-based investing movement! Start a conversation to see how we can help you, starting today.

Ask us about biblically responsible investing and comprehensive financial planning by CERTIFIED FINANCIAL PLANNER™ Professional. 

 

Read: Growing Your Wealth With The Right Mindset And The Right Financial Advisor

 

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This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

 

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.

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