By guest blogger Dwight Short, with and introduction by Cassandra Laymon, CFP®, MBA
It’s sometimes hard for me to convince Christians that they can make an impact for change by choosing what business practices to invest in. I hear responses like, “I’m just one investor (or financial advisor) and I can’t make a difference.” Yet, we still vote in elections, right? We know that one individual won’t make all the difference, but it’s like-minded people coming together that make an impact!
Today I’ve asked our colleague, retired Merrill Lynch advisor Dwight Short, to share an encouraging story about positive change that he experienced a few years ago when he was actively serving clients:
As an advisor at Merrill Lynch, it was often filled with announcements and pronouncements about our research team’s recommendations or opinions about the economic outlook. Every month we had a single stock that would be highlighted as our research team’s very best choice for our clients to consider buying and adding to their holdings. This recommendation was titled our “Focus One Stock” and it was not unusual to see the stock jump when this announcement was made public. My personal strategy was to look at the recommendations and then re-visit them from time to time to see if they had turned into bargains rather than try to jump on a moving train when it was already a long way down the track.
In the years from 1997 to 2005, I started to attend many conferences that would include research and information about companies that were doing things that Christians might want to avoid. This would include many of the usual suspects like the addictive profiteering tobacco, alcohol, and gambling companies, but many of the subjects were much more subtle in the ways they were making money. One such company was First Data Corporation which back in the late nineties and early two thousands were earning almost a third of their profits by processing credit card transactions for the pornography industry. Who would know this was going on as the company wasn’t about to brag about it in the annual report, but somehow, an analyst was able to decipher this from their financials. I didn’t give this a second thought until I got home and arrived at my office the following week and my company announced their latest choice for Focus 1 selection…. First Data Corporation.
I immediately got on the phone and asked for the analyst who follows this stock and was instrumental in proposing it for Focus 1 status. He actually picked up and started talking with me about the merits of the company and its outlook. When I asked him why he would recommend a company that earned almost a third of their profits from pornography, there was dead silence. The thirty second pause was one of the longest in memory. “You mean to tell me you are not aware of this source of profits,” I asked? He didn’t answer any further, begged off of the call and indicated he had some work to do.
One week later our research department pulled the Focus One selection of FDC, which raised a lot of criticism because Focus 1’s typically would be carried for at least six months to a year as a longer term idea. About a year after this exchange, FDC announced that they were exiting the porn business and would work to replace it with other relationships, which they did. I did receive one more call back from that analyst thanking me for my question. He didn’t know that one of the companies he followed was doing business in a way that not only Christians would not approve of, but most reasonable people would not want to benefit from as well. What hidden activities, business practices, or policies are the companies in your portfolio or mutual funds engaged in that would make you cringe? This is what Biblically Responsible Investing is all about. Finding out and identifying as much as you can to determine if you are acting and investing responsibly. Your advisor should be able to help you do this. You will not only be blessed, but you will learn things about investing that you likely never considered before.
Galatians 6:1-3 (RSV) “Brethren, if a man is overtaken in any trespass, you who are spiritual should restore him in a spirit of gentleness. Look to yourself, lest you too be tempted. Bear one another’s burdens and fulfill the law of Christ. For if anyone thinks he is something, when he is nothing, he deceives himself.”
Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc.