Wednesday, March 9, 2005

INVESTING WITH A CONSCIENCE. I've had some interesting e-mail dialogue with some folks regarding my little fledglng diatribe on Christians engaging in the stock market. The fruit of one discussion comes in the form of a checklist for "Investing with a Conscience" from one of my theological teachers, Dr. Wesley D. Tracy. If you invest, consider Tracy's standards:

"I have some conscience-guidelines for investing. They do not assure me of avoiding complicity in our sinful systems, but they do help:

1. I do not invest in Mutual Funds. Fund managers are free to put your money anywhere they want. Funds usually have hundreds of investments--surely some of them in tobacco, weapons, etc.

2. I do not invest in companies that I know do business in certain areas. For example, I have never invested in General Electric--very profitable company--because a couple of their branches make weapons of war. I avoided the open-ended funds of Scudder because my research showed that they owned a chain of Finance Companies--and in every state in the union they make the poor pay double ( the better your credit the lower the interest, etc.). Again, I started to buy Volvo shares--but my research showed that they owned a tobacco company. A year later they sold their tobacco interests and I bought the stock--sold for a 20% gain later. A food company I was researching turned out to also produce the number two best seller among American whiskeys. Okay, they would do that without my dollars.

3. In precious metals (only gold and silver for me) I was careful to avoid Krugerrands (apartheid So. Africa). I bought the Canadian Maple Leaf instead. When I said this in print I was told by ten readers that I would be persona non grata in So. Africa and that I had put my church there to risk!

4. I do invest in six or seven public utilities--water, gas, electricity. As you know these companies cannot just jack up prices and profits at will. They are regulated by state boards and allowed to make 9-13% profit (depending on the state). About half the profits are paid to shareholders in dividends and half are plowed back into the company. If a utility wants to raise rates it has to prove its case to the regulators showing what it costs to produce the product and show compliance with profit guidelines.

5. I have never invested in REITs(real estate investment trusts)--I just didn't think they were safe investments. But what you said in your letter about rental investments in Indy makes me glad that I never seriously considered them.

DON'T CHECK YOUR CONSCIENCE AT THE DOOR. "No Christian should check his conscience at the door when investing. But there are several worse investments than the stock market in general."

ADAM CLARK'S ADVICE. "I like Adam Clarke's advice in the 18th century. He called for the name of any lender who charged more than 5% interest to be posted in the public square. He also participated a campaign that secured the signatures of 100,000 Christians on a petition in which they vowed to stop using sugar and rum until American slavery in the Caribbean was abolished. He also campaigned for child labor laws....but there I go, back to that Wesleyan heritage of ours."

Thanks for your gracious response, Dr. Tracy.

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