Q. Catholic Values Investing

Q.  I invest most of my money, including my retirement plan, in mutual funds. My concern is that I do not know where the mutual funds I have are invested. Do you have any guidance on how best to invest my money in ways that are morally in line with our faith?  And is it wrong to simply invest in any mutual fund?

A. You have asked the “million dollar question” so to speak. Financial investing these days is complicated, and often those who do the investing have no idea what they are invested in. And you have two good questions.

To begin, you raise an important point by asking how to invest your money “in ways that are morally in line with our faith.”  Before answering that, let’s look at your second question as to whether it is wrong to invest in any mutual fund.  The simple answer is that, while it might not be “wrong” to invest in most mutual funds, it might be far better to do a little research and pick a mutual fund that is morally compliant with our faith.

First, some mutual funds invest in many immoral activities, such as industries related to abortion, contraception, embryonic stem cell research, pornography, and the like.  Therefore, it might be wise to talk to a Catholic Financial Advisor who is well-versed in morally responsible investing to find out if your investments are supporting any of these activities.  These activities are “intrinsically evil,” and we should do all we can to avoid participation in each one of them.

Second, there are other investments that might not be intrinsically evil, but still fall short of moral responsible investing.  Examples would be nuclear arms, landmines, and environmental hazards.

Third, there are healthy areas in which to invest, such as those companies that promote human dignity, oppose discrimination, and serve the poor.

The United States Bishops have published a document called “Socially Responsible Investment Guidelines,” (updated in 2021) which would be a good place to start to educate yourself on these important Catholic principles.  With that said, it might be too much for you to sort through this on your own.  Therefore, in answer to your first question, it is best practice to find a financial advisor who is well acquainted with these Catholic guidelines and has developed a morally compliant investing strategy that you can trust.

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