Jay Peroni had been a financial advisor for over seven years when a client asked him a question he could not answer: “Can I expect God to bless my investments if I’m investing in things that oppose his word?”
Peroni, author of “The Faith-Based Millionaire” and president of Values First Advisors, was stumped. His search for the answer sent him on a two-year journey to interview people of various faiths, who had been financially successful, to find out some of the key ingredients of their investing philosophy.
“Through this whole discovery I was able to realize that you can keep your faith central in your life and your financial performance doesn’t have to suffer,” he said.
Peroni’s certainly hasn’t. He said his faith-based portfolio raked in 35.5% in returns year-to-date, compared to the 24.23% return so far this year for the S&P 500.
The way that most faith-based funds work is that they screen out what they call “sin stocks” or companies that produce or offer services that go against religious beliefs, such as abortion, pornography, gambling, alcohol and tobacco. Of the universe of 8,000 publicly-traded companies, there are 5,000 to 6,000 companies that Peroni deems eligible.
But what one denomination may think is acceptable, another group may not want to invest in.
“There’s different opinions even within one faith,” Peroni said. “That’s probably one of the biggest challenges for faith-based investing in general: Where do you stop your screening?”