The 3 Step Plan to Becoming a Faithful Catholic Investor

Many Catholics don’t realize that inadvertently, through their investment portfolios, they have become involved as owners of businesses that are immoral. What do I mean by immoral? The US Conference of Catholic Bishops spells it out for us: abortion, embryonic stem cell research, contraception, human cloning, discrimination, pornography, weaponry, and various other social issues.

So how do we make sure that we aren’t violating the guidelines set out by our bishops? This simple three step method will get us there.

1. Read the USCCB Socially Responsible Investment Guidelines

As mentioned above, the US Conference of Catholic Bishops have already set out guidelines for responsible Catholic investing. As you read the document, look for the activities that the Bishops say must be avoided. Additionally, notice that the Bishops call on investors to be actively working with the companies in which they are invested to change policies and activities that are objectionable but don’t rise to the level of forcing divestment. This is a key part of the guidelines and one which is very seldom followed by those professional investors who hold themselves out as providing Catholic friendly investments.

2. Review your holdings

This may appear obvious, but you would be surprised at how many investors really have no idea what they own in their portfolios. For example, at the time of writing, there are 40 companies within the S&P 500 that should be avoided under the Bishops’ guidelines. If you hold an index fund or ETF, you need to know exactly what stocks and bonds are held inside those vehicles.

3. Remediate your portfolio

Should you discover problem holdings in your portfolio, you will need to take action. Simply selling the problem position will solve the problem, but it may disrupt your overall investment strategy. It will often be necessary to reformulate your plan to reach your financial goals in a Catholic friendly way. This is especially likely if you own index funds and/or ETFs which tend to own a broad array of stocks and or bonds, but can also extend to mutual funds for the same reason.

One difficulty with this process is that the list of companies that should be excluded is almost constantly changing. We review them annually to make sure that we are capturing changes, both good and bad, in what companies are doing. This can be very difficult for an individual to do on their own.

While it may take a little work, knowing that your portfolio is in harmony with Catholic morality will provide a great deal of satisfaction and peace of mind.

Post from: Insights