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by Finny Kuruvilla

The original meaning of ‘priority’ was singular — the very first thing. At Eventide, our investing priority is to own businesses that advance the global common good.

One of our favorite books that we read in the last year was Greg McKeown’s Essentialism: The Disciplined Pursuit of Less. Essentialism is defined as “the relentless pursuit of less, but better.” How many of our individual and corporate lives are overloaded? The book wryly describes staff meetings that have ten “top priorities” without any sense of irony. Even the English language has been evolving:

The word priority came into the English language in the 1400s. It was singular. It meant the very first or prior thing. It stayed singular for the next five hundred years. Only in the 1900s did we pluralize the term and start talking about priorities. Illogically, we reasoned that by changing the word we could bend reality. Somehow we would now be able to have multiple “first” things.

(McKeown, p. 16)

This reminder should challenge all of us in nearly all domains of life. In investing, in particular, one cannot have multiple priorities. This, of course, does not mean that only one thing will happen — it means that we can only truly follow one ‘lighthouse.’ We have made the case that the lighthouse should not be financial returns but promotion of the global common good. While this can seem counterintuitive at first, we believe the best way to generate attractive, long-term, risk-adjusted returns for our investors is to seek to invest in companies that best serve the needs of others. In pursuing that one goal, we believe financial returns generally follow as a happy byproduct.

One of the other thoughts that McKeown offers is the idea that we’re not living merely in information overload but in opinion overload. (Think of how many, often contradictory, opinions there are about dieting strategies.) It’s easy to sympathize with the average investor who is bombarded with investing advice that makes the enterprise utterly confusing.

Our investment advice is not first and foremost about financial ratios and prognostications, but an appeal to the purpose of investing, and even of business itself. Our hope is that the “why” of investing will illuminate the “how” and the “what.”

This article expresses the views of Eventide Asset Management, LLC (“Eventide”), an investment adviser, and there is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Readers should be aware that Eventide’s approach may not produce the desired results, and Eventide’s ethical values screening criteria could cause it to underperform other firms that do not have such screening criteria. The term “smart” is used for informational purposes only, and does not imply a certain level of skill or training by the Adviser. All investments involve risk, including the possible loss of principal.

Eventide is providing this information for informational purposes only. Eventide serves as investment adviser to mutual funds distributed through Northern Lights Distributors, LLC (“NLD”), member FINRA/SIPC. NLD and Eventide are not affiliated entities.

(8524-NLD-12/5/2018)

This video was originally published here.

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by Faith & Co.

Bruce Baker, associate professor of business ethics at Seattle Pacific University, discusses the relevance of the Bible’s teachings in the modern business world.

“Every business has a field, every business has a harvest, every business has some form of work. Every business exists in a greater society. Every greater society on the face of the earth has people on the margins. Gleaning… is part of the natural operation of the business. It’s not just handing money out, it’s not just making a charitable donation. No, it’s using the engines of the business, the business model, in a way that involves people on the margins.”

– Bruce Baker

This article was originally published here.

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by Dr. Erik Davidson

“He who watches the wind will fail to sow, and he who observes the clouds will fail to reap.”

Ecclesiastes 11:4

As human beings, our capacity to worry is quite exceptional. In a worldly sense, this predilection towards fear is very understandable as bad things do happen in our lives and in the world around us. In fact, at times our worry has likely kept us from danger or harm. Personally, I know that even as the years have gone by, I have found it very difficult to break the grip of fear in my own life. If anything, I can take some small comfort in the fact that the nature of my worries has changed as time has gone by. These days, I find myself still worrying, but about different things than I did in my earlier years. That probably does not count as progress though!

Given our very human predisposition to worry, it should be no surprise that fears are especially heightened when it comes to investing. In fact, the foundational theory in the area of behavioral economics, Prospect Theory, by Noble laureate Daniel Kahneman (author of Thinking Fast and Slow) and Amos Tversky showed that humans are so overcome by fear that we instinctively weigh loss and gain prospects unevenly thereby causing suboptimal decision-making. Especially in the wake of the trauma of the Financial Crisis of 2007 – 2009, investors are predisposed to see danger lurking around every corner. These days, the list of fears that investors face is quite long: trade disputes with China, Brexit, domestic political divisiveness, Hong Kong protests, inverted yield curves, recessionary concerns, etc.

Nevertheless, despite the enticing self-preservation benefits of fear, the Bible is filled with admonitions against it (Isaiah 41:10, Luke 12:22, etc.) because of the obstructive effect it can have on our God-given destinies. Many times in the Bible, the challenge is put forward to “fear not”. Both the Old and the New Testaments have numerous stories of ordinary people overcoming their fears and taking significant risks with extraordinary, even miraculous results (think Moses, Esther, the Disciples, et al.).

In the Parable of the Talents (Matthew 25), it is illuminating to read of the master’s praise, “well done, good and faithful servant”, for the two employees who took risks with the funds that had been entrusted to them. Yet, maybe even more instructive is the scorn directed at the servant who was afraid and went and hid the entrusted funds in the ground . . . “You wicked and slothful servant” and “cast the worthless servant into the outer darkness”. If this isn’t a call to guard our hearts against acting out of fear, I don’t know what is!

Carrying over this Biblical call of risk-taking to investing, it is important for investors to be on guard against getting wrapped around the wheel of whatever the “worry of the day” may be. Rather, investors should undertake prudent risks aligned with the timeframe of their financial objective. Certainly, for short-term (less than five years) financial objectives such as planned major purchases or expenditures, risk-taking should be minimized. Actually, these sort of short-term financial goals are better viewed as “savings” rather than “investment” strategies. However, for those financial goals that are long-term (more than five years) such as young children’s college funds, retirement, a vacation home, estate plans, charitable bequests, etc. a spirit of prudent risk-taking is necessary in order to grow the funds while outpacing inflation and taxes.

The history of the stock market shows the wisdom of the Bible’s guidance on fear and risk-taking. Going back to its inception in 1927, the S&P 500, the benchmark U.S. stock market index, despite dramatic corrections and crashes, has had a total return of approximately 10% annualized. During this very long time period, despite prior generations’ “worry list” including wars, rise/fall of Communism, recessions, famines, assassinations, political discord, etc. there has never been a 14-year holding period in which the total return of the S&P 500 has been negative. Prudent risk-taking pays off over the long-term (source: Standard & Poor’s).

Obviously, “blessed are the risk-takers” is not actually one of the Beatitudes (Matthew 5). Nevertheless, investors who believe that the Bible has wisdom applicable to contemporary life are well advised to consider its guidance as it relates to fear and risk-taking as they make investment decisions.

Learn more at inspireinvesting.com

This article and video were originally published here.

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by Finny Kuruvilla

Why is it so hard to see that investing is company ownership? Here’s Finny Kuruvilla, MD, PhD, discussing his perspective on why it can be hard to feel ownership in investing today.

Now, why is it hard to see this ownership today? Why has this question been … has it been so fundamentally obscured? Well, I think most of us, if we think about it, would agree that investing has long been divorced from this original and most basic purpose of simply supplying capital to support businesses. Instead, we see that most investors are trying to profit from the market rather than from any productive and intrinsic value of the underlying company. People even forget sometimes that the market consists of these underlying companies, and in fact, this has partly been driven by things like ETFs, or index funds where you buy the entire market. The mantra has become all about low cost, low fee products. The various rating agencies that are out there push this. This is all throughout the financial newspapers, and journals, which reduce investing to buy the whole market, but simply find it at these very low cost, low fee products.

This, very naturally, has made investing commoditized, and depersonalized. People aren’t even thinking about what it is that they’re owning, since they’re buying everything. Thus, we can say that most people don’t know what they own. In fact, if you ask most individual investors, “Do you know what you own?” They’ll say, “I have no idea.” If you ask many financial advisors what do they own, they’ll say, “I have no idea.”

I think it’s a very empirically verifiable statement to see how far we’ve fallen from understanding this original purpose of what investing was intended to be. This is nicely captured by William Cavanaugh, who’s a professor at DePaul University, who says, “Retirement accounts tend to just go into mutual funds. Well, not only do I have any idea how the companies that I have stock in are being operated, I don’t even know what companies I have stock in, [and they’re run] by an elite of managers whose one preoccupation is with increasing the bottom line.”

A very extreme example of this comes from Cliff Asness. Cliff Asness is a very widely respected quant fund manager who was one of the founders of AQR Capital Management, and he is often lauded as a pioneer in quantitative investment management. Notice this statement that he made at a Morningstar conference where he said, “I pride myself on not knowing what’s in our portfolios.”

This is a very powerful exemplar of this phenomenon taken to the final stages where we are seeing that in the end people are almost celebrating this ignorance of not even knowing what they own.

This communication is provided for informational purposes only and expresses views of Eventide Asset Management, LLC (“Eventide”), an investment adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide’s values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to Eventide’s Business 360 approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Eventide’s overall research process. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.

Before investing or sending money, an investor should carefully review investment objectives, risks, charges and expenses as provided in prospectuses and other information available at www.eventidefunds.com or by calling 1-877-771-EVEN (3836). Eventide Asset Management, LLC serves as investment adviser to the Eventide mutual funds distributed through Northern Lights Distributors, LLC (“NLD”), member FINRA/SIPC. NLD and Eventide are not affiliated entities.

8077-NLD-8/31/2018

by Stephen Kump with Charityvest

Both the most generous and the most covetous people I’ve ever met have been people on the low end of the economic ladder. The generosity I received a few years ago in Uganda among the poorest of the global poor, at times, brought me to tears. In contrast, just this past weekend a man in evident need attempted to scam me when I responded to his plea for grocery help. Perhaps you can relate to these extremes.

Conversely, the wealthy often have a greater capacity to operate with some independence on others, and as a result, they can proceed through much of life with indifference toward being generous or being covetous. Most of the extremely generous wealthy people I know have gone through life seasons of loss or deeply constrained living, or they have walked in close proximity to many people who have.

There’s a heart-clarifying edge that comes with the challenges of resources being more scarce.

When times get lean, people of all economic stations either grow in their capacity to find security outside of themselves (i.e., their resources and efforts), or they become increasingly captured by fear and dread. Something about scarcity clarifies the trajectory of our hearts.

We’re seeing people have heart-clarifying moments here in the era of COVID-19.

Heart clarification was Jesus’ exercise for the man we know as the “rich young ruler” in Matthew 19. He was to give up his wealth and place his trust and security fully in Jesus. Instead of giving away his wealth, we’re told he walked away from Jesus distraught. Jesus’ invitation was clarifying at the heart level. The ruler was not ready to trust Jesus more than the security he found in his own stuff. We’re also likewise warned by Jesus right after the story that it is hard for rich men to enter the Kingdom of Heaven. In Jesus’ mind there is a direct link between our heart-health and our relationship with our money.

The second part of Jesus’ invitation to the rich young ruler was to give. He did not advocate for the man to burn his money. Burning his money would have been impersonal. Instead, Jesus invites him into an activity of connection—generosity. To give, he would have had to look for problems and opportunities outside of himself. He would have had to come in close contact with the poor or those who served them directly. His life would have become less about activities of comfort and more about activities of compassion and connection.

In our lives, as was true for the rich young ruler, the most clarifying heart moments around our resources tend to come in the moments when we consider or experience significant changes in our wealth. This can also happen inside of us when we observe a wealth change in someone proximal to us, too. Consider the disciples, who observed the exchange with the young ruler. Jesus’ conversation with him was just as much for the disciples as it was the young ruler himself. There was a clarifying heart moment for all of them.

With all of the present uncertainty in regards to resources around us—perhaps reductions already felt or observed—I suspect there’s an invitation to a clarifying heart moment for you and those who are watching you.

Even with all the calamity caused by this virus and its economic effect, the far more subtle, yet more widespread and material threat to you and your employees is a response of fear and self-centeredness to all that’s going on. How many of us, myself included, have had calculating thoughts like, “If only I can get back to …” or “If I can just save this much then…?” But such thoughts lead us back to the place where the agenda of worldly prosperity has its greatest spiritual detriment. Uncle Screwtape in CS Lewis’ Screwtape Letters makes plain the spiritual reality we want to prevent, “Prosperity knits a man to the world. He feels that he can find his place in it, while really it is finding its place in him.”

Perhaps, in a moment such as this, the greatest thing we can do as leaders is to reassess our own relationship to our resources and resist the temptation to neglect generosity even when it might not fit with our financial goals. The temptation is to believe shrewdness with money will lead us to become a more whole person on the other side of this economic downturn. Shrewdness only matters if we are employing shrewdness to enable a good heart’s agenda.

I’ve learned that it is in these very moments when the discipline of giving—intentionally setting aside resources and looking for opportunities to bless someone else — is most critical to spiritual progress. With each day of financial uncertainty, Jesus extends an invitation to trust him more than our money.

And I’d argue that having means to act in response to Jesus’ call is incredibly helpful here. Such means can influence our spiritual habits and the trajectory of our hearts.

This is one of my personal motivations behind my venture, Charityvest. We are creating means for intentional giving to be accessible to everyone, Christian and not, and for leaders to inspire others to give. We are one tool, and there are certainly others good for various donor or gift circumstances, but everyone needs something.

A commitment to generosity in a time like this is not without its obstacles. I’ve heard it said already, for any business leaders affiliated with an organization that is facing layoffs, giving to charity now is “out of touch”—implying leaders should use any personal or corporate capital to save employees, not encourage giving.

I can certainly see ways that promoting charitable giving in this time could be poorly handled, but leaders face a moment now where people are—to a greater degree—looking to them for leadership on a deeper level. I recently heard GEN (ret) Stanley McChrystal mention in regard to leadership in the COVID-19 era, “The leader’s got a role to, first, give people a sense of direction.”

Laying a foundation of generosity in your own life—whether of large dollars or small dollars or any other resource—is an opportunity for you as a leader in your family, your company, and your friends to “set direction” as to what’s most important in life. You can also influence the spiritual climate in your environments by encouraging the same in others.

While reading Hebrews 13 this past weekend, I took note of the author’s final exhortation as the Church races toward a historical period of intense persecution. “Keep on loving each other as brothers and sisters. Don’t forget to show hospitality to strangers,” he writes. And then he swiftly follows with, “Don’t love money; be satisfied with what you have. For God has said,’I will never fail you. I will never abandon you.’” This is the invitation of Jesus, that we hold His presence and faithfulness as our Treasure, especially when all else falls away.

In leaner moments like today, we can respond to this invitation of Jesus and make generosity a way of life—perhaps more than ever. Or we can turn away from Jesus, consumed with fear for our future, and aimed only at pursuing and preserving our worldly prosperity. All the while Jesus extends his own generosity to us: he freely gives himself.

If I can help activate you or your employees in generosity, please don’t hesitate to contact me directly. I’d be delighted to recommend a resource best for you.

FOR MORE INFORMATION ON COVID-19, PLEASE SEE OUR PAGE HIGHLIGHTING SOME OF THE BEST RESOURCES OUT THERE FOR FAITH DRIVEN INVESTORS & ENTREPRENEURS IN THIS SEASON.