A brother in Christ who is a missionary in Africa inquired from me concerning investing in Christian mutual funds, having found my post on the topic on my website. He asked about both stock investments and about my article on how to do peer-to-peer lending in a Christian manner.
I thought that my response to him (somewhat adjusted) might be helpful to What is Truth? readers.
I thought that my response to him (somewhat adjusted) might be helpful to What is Truth? readers.
Dear Bro ——,
Thank you for reaching
out to me; I am thankful that the information on Eventide was a blessing
to you, and, I trust, other material at faithsaves.net has been as well.
out to me; I am thankful that the information on Eventide was a blessing
to you, and, I trust, other material at faithsaves.net has been as well.
I was very excited when I found out about Eventide, as I had been searching for something like them for a long time.
On a practical level, you can invest in the Eventide family of mutual funds in several ways.
1.) Open a brokerage account with a reputable broker such as schwab.com or fidelity.com,
and then buy the Eventide funds through them. Both of them will charge
you no fee as long as you hold them for over 60 days (Fidelity) or 90
days (Schwab), and since you are not planning to buy and sell and buy
and sell, that holding period really doesn’t matter (and if you really
need the funds, the fee to sell before then is small; 1% I think.) One
advantage with Schwab is that they also have a no-fee checking account that you can open that has no ATM fees or foreign transaction fees at any ATM worldwide.
and then buy the Eventide funds through them. Both of them will charge
you no fee as long as you hold them for over 60 days (Fidelity) or 90
days (Schwab), and since you are not planning to buy and sell and buy
and sell, that holding period really doesn’t matter (and if you really
need the funds, the fee to sell before then is small; 1% I think.) One
advantage with Schwab is that they also have a no-fee checking account that you can open that has no ATM fees or foreign transaction fees at any ATM worldwide.
I
think the Schwab checking account works as long as you have a US address and the account is a
US account. They will also give you $100 for opening one if you use the link above (it is a hard pull on your credit report, but that has only a minor effect on your credit score for a short time). Both Fidelity and Schwab
have great customer service as well. You can invest in class “N” shares
of Eventide mutual funds with no fees with both Fidelity and Schwab.
If you have over $100,000 you can get class “I” shares, which have a
0.25% lower management fee–not a large amount, but worth doing if you can, as it
adds up over the years.
think the Schwab checking account works as long as you have a US address and the account is a
US account. They will also give you $100 for opening one if you use the link above (it is a hard pull on your credit report, but that has only a minor effect on your credit score for a short time). Both Fidelity and Schwab
have great customer service as well. You can invest in class “N” shares
of Eventide mutual funds with no fees with both Fidelity and Schwab.
If you have over $100,000 you can get class “I” shares, which have a
0.25% lower management fee–not a large amount, but worth doing if you can, as it
adds up over the years.
2.) You could also open an account with Eventide directly through their agent, Gemini Funds.
There are fewer bells and whistles if you do it this way, but it would
also work. If you wanted to also buy some of the Timothy Plan products,
though, it would be better to go with Fidelity or Schwab or, for the
specific purpose mentioned below, Merrill Edge.
There are fewer bells and whistles if you do it this way, but it would
also work. If you wanted to also buy some of the Timothy Plan products,
though, it would be better to go with Fidelity or Schwab or, for the
specific purpose mentioned below, Merrill Edge.
3.)
If you want to diversify to the Timothy Plan, I would only recommend
their bond funds, as their stock funds are not 100% clean like Eventide
(although they are way, way better than secular funds) because they will
still purchase distributors of alcohol (e. g., Walmart) while filtering
out manufacturers (see the explanation in my article on Christian mutual funds,
which I think you already read). The Timothy Plan class A shares have
a 5.25% fee to get into their fund. However, if you purchase them
through Merrill Edge,
the 5.25% fee for the class A shares will be waved. I do not like
Merrill Edge as much as Schwab and Fidelity, but for the specific
purpose of saving 5.25% on Timothy Plan bond funds I would go with
Merrill Edge, while keeping Schwab/Fidelity for everything else. Class “A” shares of Eventide through Merrill Edge also have a yearly fee that is 0.05% higher with Eventide than the class “N” shares one can get through Fidelity or Schwab.
If you want to diversify to the Timothy Plan, I would only recommend
their bond funds, as their stock funds are not 100% clean like Eventide
(although they are way, way better than secular funds) because they will
still purchase distributors of alcohol (e. g., Walmart) while filtering
out manufacturers (see the explanation in my article on Christian mutual funds,
which I think you already read). The Timothy Plan class A shares have
a 5.25% fee to get into their fund. However, if you purchase them
through Merrill Edge,
the 5.25% fee for the class A shares will be waved. I do not like
Merrill Edge as much as Schwab and Fidelity, but for the specific
purpose of saving 5.25% on Timothy Plan bond funds I would go with
Merrill Edge, while keeping Schwab/Fidelity for everything else. Class “A” shares of Eventide through Merrill Edge also have a yearly fee that is 0.05% higher with Eventide than the class “N” shares one can get through Fidelity or Schwab.
How
aggressive you want to be with your investments depends on your planned
timeframe. If you want the largest amount of long term growth, you
probably are best (of course, the Bible speaks of “uncertain” riches)
with the Eventide Gilead Fund and a smaller amount in the Eventide
Healthcare and Life Sciences Fund. Income funds that include dividend stocks (e. g., Eventide
Multi-Asset Fund) and bond funds (e. g., Timothy Plan High Yield Bond Fund)
will not fluctuate as much as stocks, but they will probably grow less
in the longer term. So it depends upon whether you want something that
will probably grow more in the long term but go up and down a bit more
or something that will go up and down less but grow less in the long
term. Another factor is whether you will get scared and want to pull
out of the market the next time there is a crash. If you can go to
sleep at night and not worry about short term losses, or at least not
worry enough so that you sell after a crash, the worst time to get
out, then mutual funds are for you. If you would get scared and pull
out, then you would be better off having less long-term growth and less
volatility.
aggressive you want to be with your investments depends on your planned
timeframe. If you want the largest amount of long term growth, you
probably are best (of course, the Bible speaks of “uncertain” riches)
with the Eventide Gilead Fund and a smaller amount in the Eventide
Healthcare and Life Sciences Fund. Income funds that include dividend stocks (e. g., Eventide
Multi-Asset Fund) and bond funds (e. g., Timothy Plan High Yield Bond Fund)
will not fluctuate as much as stocks, but they will probably grow less
in the longer term. So it depends upon whether you want something that
will probably grow more in the long term but go up and down a bit more
or something that will go up and down less but grow less in the long
term. Another factor is whether you will get scared and want to pull
out of the market the next time there is a crash. If you can go to
sleep at night and not worry about short term losses, or at least not
worry enough so that you sell after a crash, the worst time to get
out, then mutual funds are for you. If you would get scared and pull
out, then you would be better off having less long-term growth and less
volatility.
I
would suggest opening an account with Fidelity or Schwab and then
making an appointment with a financial advisor. Perhaps if you tell
them you are in Africa they will let you do it over the phone. Tell the
advisor you want to invest only in Eventide and/or in Timothy Plan bond
funds. I would recommend not going with an actively managed account by
Fidelity/Schwab, both because of the fees they charge and because they
don’t really understand clean investing like the people running
Eventide/Timothy do, so they will say they are doing it but probably
are not. I would then put the money in a mix of stock and bond funds
(less volatile) or stock only (higher probable long-term growth, higher probable volatility) funds and forget
about it, or at least forget about it until every few months or
every year you look at your statement so you can tithe and give on
whatever gain you have (or reduce a tithe on a loss if they go down) and
rebalance (the financial advisor can help you understand what it is to
rebalance). People who forget that they have accounts, or who are dead,
get better rates of return than the living who know they have accounts
because the living people tend to get scared about the short-term
volatility while the dead and those who just leave the accounts alone
because they forget that they have them get the long-term growth without
getting scared by short-term swings (see, e. g., the article here on that subject). Trying to “time the market” by guessing when one should
get in and get out is also something that living people do, and it almost always works out worse than just getting in and staying in and not trying to guess the short-term future.
would suggest opening an account with Fidelity or Schwab and then
making an appointment with a financial advisor. Perhaps if you tell
them you are in Africa they will let you do it over the phone. Tell the
advisor you want to invest only in Eventide and/or in Timothy Plan bond
funds. I would recommend not going with an actively managed account by
Fidelity/Schwab, both because of the fees they charge and because they
don’t really understand clean investing like the people running
Eventide/Timothy do, so they will say they are doing it but probably
are not. I would then put the money in a mix of stock and bond funds
(less volatile) or stock only (higher probable long-term growth, higher probable volatility) funds and forget
about it, or at least forget about it until every few months or
every year you look at your statement so you can tithe and give on
whatever gain you have (or reduce a tithe on a loss if they go down) and
rebalance (the financial advisor can help you understand what it is to
rebalance). People who forget that they have accounts, or who are dead,
get better rates of return than the living who know they have accounts
because the living people tend to get scared about the short-term
volatility while the dead and those who just leave the accounts alone
because they forget that they have them get the long-term growth without
getting scared by short-term swings (see, e. g., the article here on that subject). Trying to “time the market” by guessing when one should
get in and get out is also something that living people do, and it almost always works out worse than just getting in and staying in and not trying to guess the short-term future.
May the Lord help you to be a wise steward with what He has given you, that you might give Him the most honor and glory with it.
Grace and peace in Christ,
Bro TR
One more thing–I think that peer-to-peer lending in a Biblical way could be something you could do to diversify some, but I think it will probably somewhat underperform the Eventide stock funds in the long term (while possibly being less volatile) although it might outperform Timothy Plan bond funds and it might have volatility between the two.
Also, of course, I am not a licensed financial advisor, nor am I giving official financial advice.
Something that was not part of my letter, but that I think is worth considering, that demonstrates the unadvisability of trying to “time” the market, is the game here. If you think you know when to pull in and out of the market, try your hand here using the real historical data from the past and see if you outperform just leaving your money alone and not trying to predict what cannot be predicted.
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