David Bahnsen explains “value investing” at Acton University.

How should your views on morality affect your investment strategy? David Bahnsen, Chief Investment Officer at The Bahnsen Group, argues in an Acton University presentation titled “Value Investing” that the question is a plex one. He begins by outlining the purpose of investment consistent with its definition: to make a profit. Without growth, there is no investing. Similarly, there is no such thing as a risk free investment. Biblical investment is therefore rooted in prudent risk taking.

When designing investment portfolios, who determines what “socially responsible” means? There is no universal, objective determine, and Bahnsen argues either fundamentalists or environmentalists determine what it means. Fundamentalist portfolios might avoid investing in tobacco or alcohol, and environmentalist portfolios might stray from fossil fuels.

“Everyone will merce with someone who doesn’t share their value system”, says Bahnsen. The vast interconnectedness of a modern market economy makes this an inevitability. This makes it difficult to draw a line in the sand, over which investment or purchase is just and moral. He does note one unambiguous moral good of investing; helping to grow profitable businesses and create value for others.

There are exceptions. Some goods and services are beyond human virtue, but it’s difficult to find an absolute standard to judge by. Thus, according to Bahnsen, there is no absolute standard. Acceptable investments vary as widely as the individual conscience, guided by virtue and principles, varies. Ultimately, the decision of investment rests with the individual conscience, not with a nebulous term like “social responsibility”.