With retirement savings accounts taking as much as a 50% hit due to the financial market collapse and ensuing recession, everyone is looking for a way to recoup those losses. According to reporting from American Banker, financial advisor Jay Peroni thinks he’s found it: God.
Yes, God. Peroni, author of “The Faith-Based Millionaire” spent two years interviewing financially successful people of various faiths, to uncover some of the key ingredients of their investing philosophy.
What did he find? No doubt, diversified assets and a stay-the-course attitude. But, he told AB, he also found faith.
“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 told AB, an EBN sister title.
Whether you count yourself among the religious faithful or not, it’s hard to argue with Peroni’s results. Peroni says 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, AB reports.
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?”
Peroni’s methods are controversial, certainly. There’s absolutely an argument to be made for keeping faith and finances separate – particulary as it pertains to employer-sponsored retirement plans. All the same, if you presented your 401(k) participants with a fund that shows 35% returns, do you really think they’d turn it away?
What do you think? Would you consider offering a faith-based fund? Or, is such a fund too much of a lightning rod, regardless of returns?
