"We always felt that we were doing good--not only for our investors, helping them to make more profits--but also for the nations where we invested. If we send money to buy shares in corporations in the poverty stricken nations, then those corporations can expand more readily and help people. Furthermore, most of those poor nations need infrastructure, such as more pure water, or more telephones, or more highways, and you can't do that by local savings. So you need to have the foreigners to come in and buy shares in order that your infrastructure can be the foundations of the entrepreneurship among the local people."

Sir John M. Templeton Founder of the Templeton Mutual Funds & Templeton Prize for Progress in Religion As quoted in Ten Golden Rules For Financial Success by Gary Moore

Most investors are content to simply receive a return of more money on the money they invest. But during recent decades, more and more investors have sought a social return as well. These ethical or socially responsible investors seek a double bottom line. Yet much of the consciousness about social investing is still about simply avoiding investments in potentially harmful endeavors, such as the so-called "sin stocks" of alcohol, tobacco and gambling companies, and a few variations.

But the recent popularity of spiritual books, such as the best-seller by the Dalai Lama, may indicate that more of us are now seeking spiritual returns as well. Perhaps we too would like to look back after a most financially successful career and still say, as Sir John Templeton did, "We always felt that we were doing good..." Not just avoiding harm but doing good. Not just with charitable dollars that are a small percentage of our incomes--as my religious clients are essentially taught year after year by our religious institutions--but with our principal as well.

The irony of today's consciousness is that Jewish patriarchs were among the earliest advocates of spiritual investing. Please see Dt 22:8, Dt 15:9, Ex 21:28-33 and Lv 19:9 for only a few examples of their "do good" teachings that encouraged social investing and other activities beyond charitable giving. This higher dimension keeps wealth managers connected to the gracious Creative Spirit, and therefore to the souls of we the Created, and is common to many spiritual traditions. For example, it is a central teaching of my tradition of Christianity that mankind cannot live by bread alone and that the truly abundant life has two dimensions beyond material well-being: the horizontal or social dimension and the vertical or spiritual dimension. That's only one belief about reality that is expressed by our symbolic Cross but it is a most important one. The implication is that the truest riches are three-fold: a triple bottom line of financial, social and spiritual returns.

The joy I've often seen in the face of Sir John, perhaps the most spiritual of the Wall Street legends, is not unlike that often seen in the face of the Dalai Lama. I believe that joy affirms that triple rewards are not only possible for investors but that they are complementary. If you'll excuse a personal example, it speaks volumes about that conclusion, made after a decade of studying the philosophies that made John the #1 mutual fund manager of the past half-century.

Just after the developing markets of Southeast Asia suffered a sharp decline during 1998, the November issue of Money featured an article about spiritually-oriented investment advisors. During an interview for that article, I mentioned that most Americans were heading for treasury securities but John had suggested that I might profit our many friends in Southeast Asia as well as my clients and ultimately myself by doubling our investments in those markets. I shared that John was particularly fond of South Korea, which happens to be the home of the largest Christian church in the world. And I explained that by investing there, I was simply following the spiritual guidance to love my neighbor as myself. Money wrote that I was a believer who takes the idea of spiritual investing to "unexpected lengths." I might have been tempted by that old sin of religious pride had the writer's tone not been that I had just taken the financial equivalent of a long walk off a short pier!

A year later, the good news is that the developing markets funds were among last year's best-performing asset classes. The South Korean market more than doubled. And a crisis that President Clinton called one of the greatest threats to America's economy since the Great Depression has now passed. Perhaps that is why Peter Drucker has emphasized: "The developed countries also have a tremendous stake in the Third World. Unless there is rapid development there--both economic and social--the developed countries will be inundated by a human flood of Third World immigrants far beyond their economic, social or cultural capacity to absorb."

This "harmony of interests" as Adam Smith called it was noted in the December 4, 1999 edition of The Economist. It made the case that Mark Mobius, the manager of the various Templeton developing markets funds, has not only compiled a ten year track record virtually identical to the vaunted S&P 500 index but "almost certainly does more good" for the world's poor than Mother Teresa. From a spiritual perspective, that conclusion is surely open to debate, particularly if we consider how Mother Teresa enriched the spiritually poor of the materially rich nations, myself included. But from an economic perspective, it surely contains more than an element of truth.

I am both an investment advisor and the board treasurer of a "micro-credit" ministry that finances tiny jobs for that fifth of humanity that lives on less than $1 per day with loans that average less than $200 each. And I am constantly amazed at how the traditional capital markets of the U.S.--long estimated at well over $30 trillion--dwarf the alternative capital markets. Mr. Mobius alone manages over $13 billion. But $100 million is a very significant sum in the micro-credit world. Both the developed and the developing worlds would surely be more hopeful, peaceful and prosperous places if only 1% of the traditional markets found its way into developing markets funds and micro-credit organizations. Another 1% in "community development" institutions like Chicago's South Shore Bank might work miracles among the disadvantaged in the U.S..

But there is far more for spiritual investing to influence than the sheer size of the traditional markets. Markets that are motivated by fear and greed can do harm to the most vulnerable in indirect ways. For example, the April 3, 2000 edition of the Wall Street Journal said: "Conventional wisdom holds that the Federal Reserve's five recent interest-rate increases are having little effect on the surging U.S. economy, including the rate-sensitive housing sector. But beneath the radar screen of many government statisticians, developers of low- and moderate-income housing say the rate increases are exacerbating a near crisis in the affordable housing market, forcing the delay or cancellation of thousands of projects." It is commonly assumed that speculation in the technology stock dominated Nasdaq is a major factor for the rate increases.

Noting this makes us as popular as John Bogle, the thrift-obsessed founder of Vanguard, at a load-fund convention but some spiritual leaders wonder if even social investors should heavily over-weight U.S. technology companies, "sinless" as they might be, particularly when technology companies typically sell at far more reasonable valuations in international markets. For example, Professor Freeman Dyson recently won the Templeton Prize For Progress In Religion, which was founded by Sir John to be the spiritual equivalent of the Nobel Prizes. The press release described Professor Dyson as "one of the world's pre-eminent physicists whose futurist views consistently challenge humankind to reconcile technology and social justice." It added that this spiritual "man of a third culture in the making" has "chastised science for concentrating too much technology in 'making toys for the rich'--cellular phones, ever-smaller laptop computers, and the like--rather than helping to spread knowledge, well-being, and wealth around the world so that one day 'every Egyptian village can be as wealthy as Princeton.'" As over two-thirds of the worldUs homes do not have a telephone, we essentially wonder how much capital can be morally devoted to "toys."

Yet be not afraid that spiritual investing must enrich our neighbors at our expense. The last time Sir John graced the cover of Forbes (Jan 95), he said the way for investors to beat the market over the long term was to invest at his famous "point of maximum pessimism." His investment in South Korea was only the latest example of how having "faith" when others had lost hope enriched his shareholders over the decades. That has been a characteristic of spiritual investors since Jeremiah bought his field in a time of pending crisis (see the thirty-second chapter of that book in The Bible).

The corollary to John's maxim is to sell before the point of maximum euphoria or greed. That too has social and spiritual dimensions. During the late-80's, John suggested that Japan would be wise to invest its excess capital in other nations rather than to bid up Japan's stocks, bonds and real estate. Few were humble enough, another spiritual discipline, to listen. He was even criticized in a 1992 Forbes cover story for leaving the party too early. But the hangover arrived. And now the price/earnings ratio--which we believe remains a useful if imperfect tool for measuring capital utilization--of America's Nasdaq 100 has just soared to 90 in February, a height last seen in Japan. Few have listened as John has again said "sell" and the Templeton funds are being criticized for under-weighting technology. But as the medieval monk described the eternal cycle: Discipline creates abundance, abundance destroys discipline, and discipline in its fall, destroys abundance.

A more patient spirit might also enrich us in several ways. The January 15, 2000 issue of The New York Times said that investors held stocks for eight months on average during 1999. They held Nasdaq stocks just five months on average and held the 50 Nasdaq stocks with the heaviest trading for just three weeks on average. Meanwhile, mutual fund managers trade all our stocks about each year on average. But Mr. Bogle has done studies at Vanguard that indicate there is a strong but inverse relationship between trading and returns. Sir John held his stocks about five years, about the length of a typical business cycle. Warren Buffett says his favorite holding period is "forever," which is similar to the eternal perspective advocated by many spiritual traditions. Socially, it's doubtful that rapid-fire traders bother with corporate governance issues and so on.

Spiritually, trading seems a most stressful way to manage wealth. As Sir John often notes, people sitting in a casino hour after hour rarely appear particularly joyful. It seems little different with rapid-fire traders, whether on our exchanges, in our day-trading firms, on the Internet, or in Silicon Valley. The spiritual poverty that has accompanied the quick wealth of the Valley was the subject of a feature article in the most recent Money. Entitled "Heal the Rich!," the article's headline read: "So you dreamed that wealth would bring you happiness? Think again. Newly minted millionaires now flock to shrinks, seeking a cure for the latest psychiatric malady: 'Sudden-Wealth syndrome.'"

In short, adding a social dimension to our investing has put more bread into the mouths of our neighbors during recent decades. But adding a spiritual dimension might put more joy onto our faces during the coming millennium. And the faces of Sir John Templeton, Mother Teresa and the Dalai Lama suggest that might be the richest bottom line of all.

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