Is it Time for Your Church’s Annual Investment Checkup?


With all the volatility in the markets, a dovish tilt from central banks, uncertainties over the global economy and geopolitical headwinds, now is the ideal time for your church’s financial leadership team to look carefully at your investments.

Here are some of the things you will want to consider.

1) What is the performance of your investments? How do your returns compare to benchmarks? Often returns are calculated on calendar dates. You might want to look at returns over a three- to five-year period. Note also that some firms quote returns before their fees and some after.

2) Review the purpose of your investments. Are you looking for long-term appreciation with a smaller annual distribution or are you investing for a shorter term when you will need most of the money? Income is generally the sum of market appreciation, dividends and interest income. Annual distributions on true funds are often a spending ratio applied to the rolling average of quarterly market values of the fund. Depending on the purpose of your investment, you may want to consider changes to your investment mix.

3) Review your appetite for risk. Equity investments over time generate higher returns. On the other hand, equities also offer higher volatility in line with stock market swings. As a result, the market may be up or down when you need the money. Fixed income securities and funds also carry market risk. However, the degree of change in their market values is historically much less. Investing in certificates avoids market risk. In general, the higher the risk, the higher the expected return and vice versa.

4) Review your provider. Are you getting the service you expect? How do your provider’s fees compare to others? Does your provider abide by the socially responsible investing principles required of United Methodist institutions under “The Book of Discipline of The United Methodist Church?” Are there hidden fees? Does your provider help by answering questions and providing documents?

5) Revisit your asset allocation. As the markets have appreciated this year, asset values have increased significantly. You may need to rebalance your portfolio to bring your asset allocation back into your desired target balance. Ideally, you should rebalance if your asset mix has tilted too heavily toward stocks or bonds by at least five percentage points.

If you would like to learn how to conduct an investment review, please contact Rev. Keith E. Lawder, GUMF President/CEO, at 770-449-6726, 877-220-5664, or