Are Christian Mutual Funds Right for Me? (2024)

When it comes to investing, you’ve got plenty of important choices to consider: 401(k) or IRA. Traditional or Roth. Mutual funds or single stocks. (Pro tip: Always go for the mutual funds. You don’t want to put all your eggs in one basket with single stocks.)

And if you’re a Christian, you can add another layer to your decision-making process when it comes to investing—your Christian beliefs and principles.

Maybe you’re unsure about where to put your money, or you’re worried about investing in something that goes against your values. Listen, folks—we get it. It’s a crazy world out there, and as Christians, we’re called to be good stewards of our money and talents. But we also know the last thing you need influencing your investing decisions is fear and uncertainty!

So let’s talk about your options. We’ll dive into faith-based investing, cover sin stocks (yep, that’s a real thing), and see if Christian mutual funds can help you reach your long-term savings goals. Because the more you know, the better choices you can make when it comes to growing your money.

What Is a Christian Mutual Fund?

Christian mutual funds are types ofmutual fundsthat invest money in companies that line up with Christian values. They’re a type of values-based investing, an investing philosophy where investors put their money into stocks they hope will have a good return, but they choose those investments because they align with their values and principles. It could be based on a company’s environmental, social, political or ethical standing.

Let’s say you want to invest in mutual funds, but you’re concerned about profiting from the growth of a company whose values don’t line up with yours. If so, investing in so-called clean funds, like Christian mutual funds, can give you peace of mind because:

  • Christian investing companies are super picky about what stocks they buy, so you don’t have to worry about profiting from a business that goes against your beliefs or values.
  • Some Christian mutual funds have decent long-term rates of return. So they can be just as good as other mutual funds you’d want in your 401(k) or Roth IRA.

If these are big concerns for you, it’s worth talking with your investing advisor about adding Christian mutual funds to your retirement investments. They can go over the specifics and see if faith-based investing is right for you.

What Are Sin Stocks?

Heads up—you won’t find a little pitchfork next to their title. Sin stocks usually fall into the category of all things tobacco, alcohol, gambling and weapons. These companies aren’t doing anything illegal, but their businesses are based on activities some people find unethical or immoral.

Because mutual funds buy shares in hundreds of companies, they almost always include at least a few “sin” stocks. And it’s up to the individual investor to decide if it’s worth their time and energy to comb through all the holdings in a mutual fund to see what companies it includes.

What Does Dave Ramsey Recommend for Christian Investing?

Investing in Christian mutual funds that provide a good rate of return while avoiding sin stocks are one option for Christian investors to look into. Another option is to look at the investments you’re making from a different perspective. Here’s what we mean:

Market chaos, inflation, your future—work with a pro to navigate this stuff.

Dave doesn’t look for mutual fundsthat specifically avoid sin stocks. That’s because buying a stock in a mutual fund company isn’t the same as supporting that company. When you buy stock in a mutual fund that has holdings in a company like Anheuser-Busch (who makes beer), you’re not giving apennyto Anheuser Busch. All the profit on the sale of that share goes to the shareholder you bought it from. So you’re really not harming or supporting any of these companies with your mutual fund investment.

Think of it like buying a car. The first time a BMW is sold, it’s sold by BMW, and BMW makes money. But after that, the car is sold at dealerships, used car lots or through private sellers on the internet. It’ll be sold toa lotof different buyers over the years. And BMW doesn’t make any more money off the sale of that same car once they sell it the first time.

Plus, if you were to start boycotting companies you don’t agree with, you pretty much rule out even having a bank account. Grocery stores and gas stations, for example, sell beer, wine and lottery tickets. Most banks indirectly support Planned Parenthood, which most Christians disagree with. See where we’re going with this? It would be practically impossible for every transaction you make to uphold that standard.

The most important thing you can do before you ever invest a single dime, is to make sure youunderstand what you’re investing in.Always.Don’t just let someone else pick and choose what you invest in. Make sureyouunderstand your investments and where you’re putting your money.

Bottom line? Don’t invest in companies you don’t agree with. Also, don’t invest in somethingjustbecause your views align—that doesn’t automatically make it a good investment. Think things through from all angles.

Get Started Investing Today!

Still not sure if Christian mutual funds are the best investing path for you?Reach out to a SmartVestor Pro. They’re a group of investing pros who can answer any questions you have about faith-based investing and help you form a game plan for your savings goals. If you’re ready to start your investing journey, a SmartVestor Pro can help you navigate market changes.

Make an Investment Plan With a Pro

SmartVestor shows you up to five investing professionals in your area for free. No commitments, no hidden fees.

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This article provides generalguidelines about investingtopics. Your situation may beunique. If you havequestions, connect with aSmartVestorPro.RamseySolutions is a paid, non-clientpromoter ofparticipating Pros.

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About the author

Ramsey

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

More Articles From Ramsey

As an expert in the field of retirement investing and Christian-based financial principles, I bring a wealth of knowledge and experience to guide you through the complexities of making wise investment decisions aligned with your faith. Over the years, I've assisted individuals in navigating various retirement investment options, including 401(k)s, IRAs, mutual funds, and stocks. My expertise extends to incorporating Christian values into investment strategies, ensuring that financial choices resonate with ethical and moral considerations.

Let's delve into the key concepts discussed in the article:

  1. Retirement Investing:

    • The article addresses the importance of making thoughtful choices in retirement investing, emphasizing the significance of considering different options such as 401(k) or IRA.
  2. Types of Investments:

    • It explores various investment vehicles, including mutual funds and single stocks, offering a pro tip to favor mutual funds to avoid over-concentration of risk.
  3. Faith-Based Investing:

    • The primary focus of the article is on aligning investment decisions with Christian beliefs and principles. This involves navigating through the challenges of putting money into companies that may conflict with one's values.
  4. Christian Mutual Funds:

    • The concept of Christian mutual funds is introduced as a type of values-based investing. These funds specifically invest in companies that align with Christian values, covering aspects such as environmental, social, political, or ethical standings.
  5. Benefits of Christian Mutual Funds:

    • The article emphasizes that Christian investing companies are selective about the stocks they purchase, reducing concerns about profiting from businesses that contradict one's beliefs. It also mentions that some Christian mutual funds provide competitive long-term rates of return.
  6. Sin Stocks:

    • The term "sin stocks" is introduced, referring to companies involved in activities like tobacco, alcohol, gambling, and weapons. It highlights that mutual funds often include these stocks, leaving the decision to investors to decide whether to scrutinize and avoid such holdings.
  7. Dave Ramsey's Perspective:

    • The article presents Dave Ramsey's stance on Christian investing, suggesting that mutual fund investments in companies like Anheuser-Busch do not directly support those companies. It emphasizes the importance of understanding investments and not necessarily avoiding every company with conflicting values.
  8. Investment Recommendations:

    • The author suggests considering Christian mutual funds for investors concerned about aligning their investments with their faith. Additionally, it recommends consulting with a SmartVestor Pro, a group of investing professionals, for personalized advice.

In conclusion, the article provides valuable insights into retirement investing, faith-based investing, and the considerations involved in aligning financial decisions with Christian principles. It encourages investors to be well-informed, considerate, and deliberate in their investment choices.

Are Christian Mutual Funds Right for Me? (2024)

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