Building a portfolio can often feel like an extremely personal endeavor. Investors may meticulously examine a stock’s or fund’s past performance, analyze sectors as a whole, research how management runs a company and more. But when it comes to portfolio allocation, the desire to align personal values with portfolio decisions is trending among investors of all ages.
More and more, investors are becoming interested in investing according to their beliefs. According to Natixis Investment Managers, “three-quarters of investors globally say it is important that they invest in companies that reflect their personal values.” And to take it a step further, it is of almost equal importance to all generations when making investment decisions that their investments are doing social good — silent generation: 67%, baby boomers: 68%, Generation X: 71% and millennials: 73%.
So, if you are an investor who wants to invest in line with your faith and/or values, how can you get started? Below are three tips to align your portfolio with what matters most to you.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Define what matters to you.
At GuideStone® we focus on faith-based investing, so we screen out certain companies that do not align with our values, such as abortion, pornography, gambling, alcohol and tobacco. However, it is important to note that faith-based investing in practice is unique to each person, reflecting each individual’s passions, values and principles while taking the form of ESG (environmental, social and governance) investing, socially responsible investing, values-based investing, impact investing and so on. Define what matters to you and what you want your investments to align with (or avoid).
2. Consider mutual funds.
It can be daunting and research-intensive to create your own portfolio and investigate individual equities to make sure companies align with your values. However, there are mutual fund families that screen based on philosophies, such as faith-based or values-based investing. Mutual funds are a great solution, because they provide investors with a basket of securities that are fully vetted and not only align with a specific philosophy but are also overseen by financial professionals who monitor risk and performance on a daily basis.
3. Talk to your adviser.
If you want to incorporate values into your portfolio, be transparent with your adviser so he or she can act on your behalf to research stocks or funds that align with your preferences. While studies show there is interest in faith-based investing, we do see a disconnect between wanting to invest in this way and actually getting the ball rolling. Unfortunately, many investors are not even aware of their faith-based investing options because advisers are not broaching the subject with them. Make it clear what your values are and how you want them to align with your investment options.
As faith-based investing continues to trend upward, we believe it will become more common to discuss aligning values with investments. Until then, we recommend placing a figurative stake in the ground with your adviser by conveying that this concept should be considered when determining your long-term investment allocations.
Your values likely dictate many of your day-to-day decisions, so why should your investing habits be any different? Take control of your portfolio and understand that through certain mutual funds, you can align your wealth with your values and still maintain meaningful portfolio returns.
For more information on GuideStone Funds®, visit GuideStoneFunds.com.
-
401(k) 'Super' Catch-Up Contributions Are Coming in 2025New for 2025, employees 60 to 63 can save an additional $11,250 in their 401(k), but should they?
-
Five Year-End Strategies You Can't Afford to MissInstead of making New Year's resolutions, consider making some money moves that could help save you big bucks on your taxes.
-
Buying an Insurance Policy: Three Ways to Do ItYou can buy an insurance policy through an insurance agent or broker or on the internet. Which way works best for you?
-
10 Ways Your 1031 Exchange Can Go Horribly WrongDon't let your tax-saving strategy become a financial nightmare — discover the hidden pitfalls that could turn your 1031 exchange into a costly disaster.
-
From Entrepreneur to Retiree: Boosting Your Business' ValueWhen business owners contemplate retirement, their first step should be maximizing the value of their biggest asset. Here are a few steps that could help.
-
You've Got a Trust: Now Who Should Be the Successor Trustee?You've set up a trust to protect your assets and your beneficiaries, but you still must choose the right person to execute your wishes. Here's how to do that.
-
Three Ways Fiduciary Financial Planners Put You FirstFiduciary financial advisers are required by law to work in your best interest. Here's how they are key to intentional and efficient financial management.
-
How Long-Term Care Insurance Has Become More FlexibleToday's long-term care insurance offers retirees more appealing options, which can preserve assets and protect the financial stability of a healthier partner.
-
Your Loved One Fell for a Romance Scam: What Not to DoConfronting them probably won't work, but asking them some key questions and urging them to take certain actions could.
-
Three Ways to Help Create Financial Stability for a WidowLoss of a spouse often leads to financial insecurity in retirement. These strategies can help ensure financial stability for the surviving spouse.
