Ethical Investing?
I had a look at one of my older posts Vultures and while it is an interesting rant which fires in all directions the first comment made me think about something that I keep hearing about these days, and that is the concept of Ethical Investing.
The commenter in that specific post pretty much called me a scum bag for investing in banks, which given my rants about how terrible the service is that Banks give, makes me more of a hypocrite than a scum bag (IMHO), but I only bring this up to start the discussion.
Yes, I do invest in the Canadian Banks, mostly because they do seem to find new and exciting ways to make money, most likely in a way that screws regular folks royally, but I don’t have an issue with that, but that is pretty much where I draw the line for where I invest. You might ask what I don’t invest in (directly, I may invest in these because I hold many index funds and ETFs that may spread funds to these industries/areas):
- Payday Loan companies: interesting that I will invest in banks which make a fortune off consumer debt using credit cards and bad loan terms, yet I don’t want to invest in Pay Day loan companies, which are just a much smellier part of the same financial compost heap. I am a complicated guy that way (or a hypocrite as I am sure someone will point out).
- China: I am staying the heck away from China and Russia (to a lesser extent), just because totalitarian governments worry me, and what they have done to their populations just makes me leery of giving them my money.
- High Tech: this is mostly a once bitten, twice shy scenario where I have lost enough money in this area in my younger days, and frankly the scum bags that run some of these companies are really in the same category as a few dictatorships I have read about.
- Carbon Footprint Offset Funds: I don’t understand it, and I really don’t trust any of it. I think I’d rather invest in Sanitation Companies before I got into this Green Shell Game.
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August 15th, 2011 at 7:32 PM
I’ve been investing 3% of my income in “ethical investments” rather than giving it to charity. There’s a couple of green tech start ups i’ve invested in that haven’t done to bad. I feel i’m getting a better ROI
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August 16th, 2011 at 9:53 AM
Clearly, ethical investors will frequently disagree about specifics. However, I believe that if everyone does invest according to their personal values, then, since so many of core values are alike — and are supportive of higher ideals — that in the long run, only companies employing these higher values will truly prosper.
Serious, unbiased studies do show that in general, long-term returns on ethical investment portfolios are as good, and sometimes better, than with most regular portfolios. See this page on my Canadian ethical investing site . {link removed}
Also, surveys all-over-the-world show that most investors want to invest in ethical companies and don’t want their investments being the cause of grief to others.
I’ve been following ethical investing for some forty years.
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August 16th, 2011 at 10:22 AM
Great post. I myself have been sharing my opinion on ethical investing on my blog lately. It is really important to me and something that I like to advocate for. I would say I am a big ethical investor. I would rater forgo some profits than to make “dirty money”. I would like to do what I can to help those companies trying to be sustainable. It is what sits right with me.
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August 16th, 2011 at 6:52 PM
Nice post. I don’t do tobacco. Liquor, like LIQ, that works
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August 19th, 2011 at 9:06 AM
[...] Big Cajun Man discussed ethical investing. I liked this article; I’ll continue to invest in Canadian bank stocks since I’m getting gauged like everyone else but I won’t invest in tobacco companies - I draw the line there. He also got a little annoyed with Bell this past week. [...]
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August 20th, 2011 at 12:20 PM
I always look at how a company makes it money before I invest. I do not invest in tobacco or Pay-Loan type companies. I do look around the net to see if there are negative comments.
I once did not invest in a retail stock because I found lots of negative comments on how it did business. I felt I might be better off with another investment instead.
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August 20th, 2011 at 12:32 PM
Bye the way, I loan money via kiva.com. Via kiva.com you can loan $25 to some budding entrepreneur in most countries of the world.
This is half of my charity money.
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August 20th, 2011 at 5:34 PM
I see nothing about investing in the Big 5/6 as ‘unethical’. If anything we have no choice in Canada but to deal with one of these companies for a myriad of reasons. As investors we might as well get a return via a stable and growing dividend. If you can’t win, join!
Long: CM, BNS, RY
If I had more cash I would certainly be long TD and BMO.
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