Morality investments: Putting your money where your soul is
These days, most people don't have a lot of money to invest, and those who do are probably best served by sure bets, like gas, diamonds, and the Euro. On the other hand, investors who want to entrust their hard-earned dollars to companies that reflect their moral beliefs could hardly pick a better time to get involved in the market. Faced with the major moral, political, and cultural issues of the day, many groups have started funds that let investors, quite literally, vote with their wallets. If you have some money to play with and a political, religious, or social axe to grind, you should take a look at these investment opportunities:
Green Funds: If you hadn't heard of them before, you might have noticed the emergence of so-called "Green Hedges" when Al Gore launched his "Global Equity Fund," which is run by Generation Investment Management. Gore's idea is simple: as he notes, "The principles and ways and values that have an impact on the way markets allocate resources can have an enormous effect" on the environment. By giving people a way to put their money into green investments, Gore hopes to encourage businesses that are actively working against global climate change.
Unfortunately, Gore's fund is almost full, and will be closing very soon. However, there are no lack of green investment opportunities, from the Green Century Fund to Winslow Management's Green funds to Portfolio 21. Before plunking down your money, you will probably want to take a long, hard look at the performance history of the funds and the companies that they invest in. Regardless of their performance, however, investing in green funds will probably give you the smug joy that you can only get from saving the world. I imagine it's a lot like shopping at Whole Foods.
Anti-Terror: If your idea of wise investment means trying to avoid funding terrorists, then you might want to take a peek at the Roosevelt Anti-Terror Multi-Cap Fund. Basically, Roosevelt ensures that your investment dollars will not be given to any company that does business with Iran, Sudan, Syria, and North Korea, the four countries that the U.S. government has identified as abettors of terrorism. By ensuring that you're only engaged in politically responsible regimes, the Roosevelt fund won't just keep your money out of the hands of terrorists, it might also keep your butt out of jail. After all, given the current laws against investing in nations supporting terrorism, it seems likely that careless investors might find themselves doing time!
It's in God's Hands: If your moral code comes with a religion attached, you might want to look into a fund that caters to your particular beliefs. For example, Amana Funds claim to invest according to Muslim Sharia principles, avoiding companies that deal with liquor, pornography, gambling, and banks. Similarly, the Ave Maria Fund bases its investments on a combination of "investment performance and moral criteria," and claims that its companies hew to Catholic values. Finally, the MMA Praxis Fund bases its decisions on Mennonite beliefs, avoiding any investments that support the military or the U.S. Department of Defense. The Buddhist fund, on the other hand, largely involves putting coins in the begging bowls of guys who are wearing saffron-colored robes.
Giving the Devil His Due: In any given situation, there are always contrarians, and morality investing is no different. The Vice Fund invests in only four industries: aerospace/defense, casinos and gaming, cigarettes and tobacco, and brewing and distilling. From what I know of human nature, The Vice Fund's investment strategy seems pretty sound, although the constant threat of renewed laws and restrictions from the morality brigade probably keeps its investors awake at night.
Investing based on your morals obviously has its downsides: by restricting the breadth of your investments, you also cut off a fair bit of potential profit. However, as all the managers of all these funds would probably agree, investing in your beliefs can sometimes offer rewards that can't be measured!
Bruce Watson is a freelance writer, blogger, and all-around cheapskate. Right now, he's limiting his investments to ramen and tuna fish, as he's predicting a lot of growth in poverty foods.