How to Create a Faith-Based Investment Portfolio

1. Research Companies
Determine what activities you do not want to support (e.g., abortion, pornography, anti-family entertainment, non-marriage lifestyles, alcohol, tobacco, gambling). After deciding, identify the companies involved. Simple enough,
right? Wrong. As an example, Playboy (PLA) is an obvious company to avoid by an investor concerned about pornography, but what about Metro Global Media (MGMA)? Metro is also in the porn industry, but its name certainly doesn’t indicate that fact. Now consider Gaylord Entertainment (GET). Gaylord passes a pornography screen.

2. Screen Investments
After you have determined which companies violate your morals, you’ll need to check the funds and stocks that
you hold in your portfolio. To accomplish that task, you will need to perform a portfolio screen by comparing the
“screened companies” to the portfolios of various or specific mutual funds.

3. Find Alternatives
You will then search for companies that meet your financial criteria without sacrifi cing your moral integrity. You
will have many choices. It is estimated that among the eight thousand or so publicly traded companies, less than 10 percent fail most screens.

Which Road Will You Follow?
In dealing with your personal commitment of time and effort, there are two options. You can choose to use faithbased
mutual funds or buy individual stocks.

Path One: Mutual Funds
When selecting a faith-based mutual fund or funds, look beyond the fund’s name or category. The popularity of socially responsible investing has led many mainstream brokerage houses to create their own ethical investing
funds. Such funds often sound good but promote a liberal ethic. The same can be said for religious-based funds
as well.

Check the fund’s screening policy. Select a collection of funds in line with your values, then evaluate them for risk
performance and appropriateness before investing. Even if you are locked into a limited family of funds through your
employer’s retirement plan, you can still weed out those funds with the highest exposure to “sin stocks.”

Path Two: Individual Stocks
If you prefer a more hands-on approach, many tools are available. You can select your own stocks or hire your own
manager to help you. Internet-based brokers allow even small investors to investigate and purchase stocks on their
own. I recommend using Folio Investments, an on-line investment firm. This site offers individual investors the opportunity to build their own basket of hand-picked stocks from scratch for a reasonably low fee. You screen companies to ensure they do not violate the moral and social hot buttons you have chosen and also select companies that meet your financial criteria.