The Stock Connection

To maintain integrity between our core beliefs in our God and our investment actions, we need to know with clarity what we truly believe, have a strong grip around our faith, and then be conscious of what we are participating in when we invest in stocks.

The term “stock” is short for “stock certificate”. It refers to the document used as evidence or proof of ownership in a corporation.
For a Christian, it is essential to understand that owning stock means you are an owner of that company. The more stock you own the larger your ownership of that corporation. As an owner you participate in the profits made from the activities of the company. You also have certain rights such as are represented by the type and amount of stock you own. Voting rights, or the influence regarding leadership and control of the company, are a couple of the more common rights. Because you are an owner/participator in the profits, you also are an indirect participator in the activities of the company.

When you buy stock, you are effectively partnering with all the other stock owners in that company. Though you may not be held directly responsible for the actions of the company as a minority stock holder, you are a participant just the same. Let’s say for ease of math you own 10% of company XYZ’s stock. If that company creates a cure for some terrible disease, you have the pleasure of knowing the company you have become a partial owner in created that cure. If you were sole owner, owning 100% of company stock, you would be credited personally for making such a great breakthrough and would reap the rewards of the possible profits from the patents, rights, and sales of this great product. As 10% owner you participate proportionately in such breakthrough.

The same unfortunately is true on the other side of the formula. If the company you own creates, distributes, markets, and or promotes products that are clearly offensive to Christian Biblical values then you have the unfortunate privilege of participating in these activities through stock ownership in that company. Some such products or services that most Christian would agree violate the basis of God’s love, that harm or abuse His children, include:

• Pornography-The use and abuse of individuals for sexual activities
• Prostitution
• Abortion
• Addictive products-The production and promotion of products that harm the user
• Anti Christian and anti God entertainment and publication
• Gambling

When we own stock in a company that develops, distributes, or promotes such products or services, we are passively participant in that Biblically offensive activity.

To illustrate this point more clearly, let’s pretend there was company that made 100% per year return for its stock owners. Most people would love to have an investment portfolio full of that type of stock. But what if this company made such good returns from the production of child pornography and prostitution activities in third world nations? You may feel different about participating in such profits.

Some stock owners may argue that they did not exploit and destroy the children’s lives enslaved to prostitution and pornography. They just invested in a company. Yet, by buying the stock, an investor has financially shown support for the activities, endorsing the services with their money, and have profited directly from the abuse of these children. A stock owner may be a passive participant but a participant just the same.

To maintain integrity between our core beliefs in our God and our investment actions, we need to know with clarity what we truly believe, have a strong grip around our faith, and then be conscious of what we are participating in when we invest in stocks.

Larry Burkett once wrote “We need to be careful about what our investment dollars are supporting. Some companies that typically offer strong profits prey on the weaknesses of others – gambling enterprises are a good example. Christians need to think twice about investing in any company that would be deemed socially unethical. My advice is to stay away from any company that makes money from activities that are morally reprehensible.” – Larry Burkett, Sept, 2002 Money Matters Newsletter

The good news is many companies do not participate in such items or services. Yet we must still be careful.

A company can do many things with the profits it generates from its business activities. They could be used to expand the business, develop new products, and they could be distributed to the stock holders in the form of dividends. A corporation, just like an individual, can also make charitable gifts of its cash flows, giving financial support to organizations the controlling stockholders believe is worthy. If you own stock in a company that, gives money to organizations that promote or provide products, services, or influences to sinful activities, you have, as a partial owner in that company participated in the funding of those products, services, or influential activities.