Comments on: Socially Responsible Investing http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/ Investing and Personal Finance Thu, 11 Mar 2010 15:53:20 -0500 http://wordpress.org/?v=2.9.2 hourly 1 By: Best Dividend Investing Posts of the Week – October 31, 2009 | The Dividend Guy Blog http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-41040 Best Dividend Investing Posts of the Week – October 31, 2009 | The Dividend Guy Blog Sat, 31 Oct 2009 11:02:21 +0000 http://www.four-pillars.ca/?p=915#comment-41040 [...] Socially Responsible Investing [...] [...] Socially Responsible Investing [...]

]]> By: Book Giveaway, Variable Discount and Weekend Links | Million Dollar Journey http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40891 Book Giveaway, Variable Discount and Weekend Links | Million Dollar Journey Fri, 30 Oct 2009 10:30:55 +0000 http://www.four-pillars.ca/?p=915#comment-40891 [...] Socially Responsible Investing @ Four Pillars [...] [...] Socially Responsible Investing @ Four Pillars [...]

]]> By: This and That: Spendthrift celebrities and more… | Canadian Capitalist http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40860 This and That: Spendthrift celebrities and more… | Canadian Capitalist Fri, 30 Oct 2009 02:20:19 +0000 http://www.four-pillars.ca/?p=915#comment-40860 [...] Mr. Cheap grapples with where to draw the line when it comes to socially-responsible investing. [...] [...] Mr. Cheap grapples with where to draw the line when it comes to socially-responsible investing. [...]

]]> By: Matt http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40578 Matt Thu, 29 Oct 2009 15:44:44 +0000 http://www.four-pillars.ca/?p=915#comment-40578 Interesting to see what other posters had to write. When it comes to my own investing style, I'm more of a passive investor: I recognize the need and value of investing for my future, but my investment ambition comes quite short of starting a blog on the topic. ;) I do believe that investing is just another facet of my life and I don't see why it should be exempted from the values I hold on a day to day basis, all talk of legality aside. So, no puppy killing clinics for me! Also, I'm investing for the long term and I'd like to think that my investments are working towards a better future for myself and for coming generations and, although I'm no investment wizard, I'm pretty sure one can get decent returns over the long term investing in "ethical" funds. To answer some of the criticisms that have been lodged against ethical funds, it may not be a perfect or even particularly effective solution, but it is sending a message of sorts to corporations that there are investors out there interested in more that the mere bottom line. As with any social action, it takes a critical mass to achieve results and I'm sure I won't regret my decision to be at the vanguard of this movement. And the best part? No dead puppies on my conscience! Interesting to see what other posters had to write. When it comes to my own investing style, I’m more of a passive investor: I recognize the need and value of investing for my future, but my investment ambition comes quite short of starting a blog on the topic. ;) I do believe that investing is just another facet of my life and I don’t see why it should be exempted from the values I hold on a day to day basis, all talk of legality aside. So, no puppy killing clinics for me! Also, I’m investing for the long term and I’d like to think that my investments are working towards a better future for myself and for coming generations and, although I’m no investment wizard, I’m pretty sure one can get decent returns over the long term investing in “ethical” funds.

To answer some of the criticisms that have been lodged against ethical funds, it may not be a perfect or even particularly effective solution, but it is sending a message of sorts to corporations that there are investors out there interested in more that the mere bottom line. As with any social action, it takes a critical mass to achieve results and I’m sure I won’t regret my decision to be at the vanguard of this movement. And the best part? No dead puppies on my conscience!

]]> By: Akkei http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40239 Akkei Wed, 28 Oct 2009 18:47:04 +0000 http://www.four-pillars.ca/?p=915#comment-40239 I certainly agree with this post when it comes to people judging you for the investments you make. However, my personal preference is to own stocks of companies that I actually like. There are many choices and alternatives on the market (very true in the US, maybe less in Canada) and I do not wish to own companies that I dislike. I despise Bell for a very bad customer experience I had with them and I would feel kind of dirty if I would become an owner of this company. But it has never crossed my mind to buy their stocks and to use their dividends against them, or to cut ties with everyone that owns this stock as a matter of fact. I'm sure many feel the same way about Rothmans and your personal experience probably has more to do with bad luck than being the manifestation of a general sentiment. I certainly agree with this post when it comes to people judging you for the investments you make. However, my personal preference is to own stocks of companies that I actually like. There are many choices and alternatives on the market (very true in the US, maybe less in Canada) and I do not wish to own companies that I dislike. I despise Bell for a very bad customer experience I had with them and I would feel kind of dirty if I would become an owner of this company. But it has never crossed my mind to buy their stocks and to use their dividends against them, or to cut ties with everyone that owns this stock as a matter of fact. I’m sure many feel the same way about Rothmans and your personal experience probably has more to do with bad luck than being the manifestation of a general sentiment.

]]> By: Mr. Cheap http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40208 Mr. Cheap Wed, 28 Oct 2009 17:47:09 +0000 http://www.four-pillars.ca/?p=915#comment-40208 TMW: So, would an extension of your saying be that lawyers help criminals commit legal crime? :-) I *DEFINITELY* agree that substituting the law for personal morality is very dangerous (and I can see how what I've written may be leaning in that direction). I guess the point I was trying to make when I repeatedly referred to legal in the post and comments is that society sanctions (for better or worse) the activities of "sin stock" companies, and that attacking the companies themselves (and laws that allow them to operate) is where opponents should direct their energies, not at investors. If people are already doing that (and also going after investors), fair enough, but it doesn't make a lot of sense to attack investors and give the companies and lawmakers a pass. RE: the crush, I'm a big stud on the Internet, but you probably get more people crushing on you in real life than I do ;-). <b>Austin Powers: So I started to work my mojo, to counter their mojo; we got cross-mojulation, and their heads started exploding. </b> TMW: So, would an extension of your saying be that lawyers help criminals commit legal crime? :-)

I *DEFINITELY* agree that substituting the law for personal morality is very dangerous (and I can see how what I’ve written may be leaning in that direction). I guess the point I was trying to make when I repeatedly referred to legal in the post and comments is that society sanctions (for better or worse) the activities of “sin stock” companies, and that attacking the companies themselves (and laws that allow them to operate) is where opponents should direct their energies, not at investors. If people are already doing that (and also going after investors), fair enough, but it doesn’t make a lot of sense to attack investors and give the companies and lawmakers a pass.

RE: the crush, I’m a big stud on the Internet, but you probably get more people crushing on you in real life than I do ;-) .

Austin Powers: So I started to work my mojo, to counter their mojo; we got cross-mojulation, and their heads started exploding.

]]> By: Thicken My Wallet http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40132 Thicken My Wallet Wed, 28 Oct 2009 14:40:23 +0000 http://www.four-pillars.ca/?p=915#comment-40132 One of my favorite sayings (and I think its my own) is "business is legalized crime." Its a sloppery slope to impose your value systems onto someone else for what is legal behavior according to the state. I gotta say, none of my readers crush on me. I am feeling kinda of low right now. You clearly got some mojo going! One of my favorite sayings (and I think its my own) is “business is legalized crime.” Its a sloppery slope to impose your value systems onto someone else for what is legal behavior according to the state.

I gotta say, none of my readers crush on me. I am feeling kinda of low right now. You clearly got some mojo going!

]]> By: DividendMan http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40130 DividendMan Wed, 28 Oct 2009 14:20:11 +0000 http://www.four-pillars.ca/?p=915#comment-40130 Sin stocks all the way! What performs better than banks with government backing/oligopolies, oil companies with monopolies, massive conglomerates who can take advantage of currency fluctuations and tech giants that squeeze out the little guy? I would invest in puppy killing clinics if they made enough money :) Sin stocks all the way! What performs better than banks with government backing/oligopolies, oil companies with monopolies, massive conglomerates who can take advantage of currency fluctuations and tech giants that squeeze out the little guy?

I would invest in puppy killing clinics if they made enough money :)

]]> By: DuckConference http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40065 DuckConference Wed, 28 Oct 2009 01:19:00 +0000 http://www.four-pillars.ca/?p=915#comment-40065 This came up for me, since I was interested in buying an oil service sector ETF (as a small part of a portfolio) but then decided against it due to Halliburton making up a pretty huge portion of those funds. This came up for me, since I was interested in buying an oil service sector ETF (as a small part of a portfolio) but then decided against it due to Halliburton making up a pretty huge portion of those funds.

]]> By: Potato http://www.four-pillars.ca/2009/10/27/socially-responsible-investing/comment-page-1/#comment-40062 Potato Wed, 28 Oct 2009 00:54:33 +0000 http://www.four-pillars.ca/?p=915#comment-40062 Mr. Cheap: I think that all depends on how many people (or more properly, how much capital) follows SRI, and how dedicated they are to it (i.e.: would an extra 0.1% return draw them back to a "sin" stock? 1%? 10%?). If 99% of the world's capital was religiously against investing in say tobacco, then would the other 1% form enough of a market to get it up to fair price? Conversely, if only a small fraction of capital was directed according to SRI, and not very stringently at that, then you'd never notice the effect... I don't follow tobacco stocks, but you may be able to answer that for the real-world based on your investments: would you say that they were trading at fair value? I was going to say that it would probably be easier to see an effect on where the capital gets concentrated, rather than what it avoids, since even a fairly small amount of capital can raise the prices on a small number of "socially positive stocks" -- but I went looking to iShares for their social index fund, and in the top 10 holdings at least it looks identical to the largecap 60 index, with the exception of Barrick. I wasn't expecting it to be quite so close :) Anyhow, taking the iShares example, with ~$10B in the XIU fund and ~$20M in XEN, it looks like such a tiny part of the capital in Canadian markets is following a socially responsible investing strategy that you'd never see the effect in real life. Plus, it looks like the reason that the SRI funds got just as good results as the general market is that they look a lot like closet index funds! Mr. Cheap: I think that all depends on how many people (or more properly, how much capital) follows SRI, and how dedicated they are to it (i.e.: would an extra 0.1% return draw them back to a “sin” stock? 1%? 10%?). If 99% of the world’s capital was religiously against investing in say tobacco, then would the other 1% form enough of a market to get it up to fair price? Conversely, if only a small fraction of capital was directed according to SRI, and not very stringently at that, then you’d never notice the effect…

I don’t follow tobacco stocks, but you may be able to answer that for the real-world based on your investments: would you say that they were trading at fair value? I was going to say that it would probably be easier to see an effect on where the capital gets concentrated, rather than what it avoids, since even a fairly small amount of capital can raise the prices on a small number of “socially positive stocks” — but I went looking to iShares for their social index fund, and in the top 10 holdings at least it looks identical to the largecap 60 index, with the exception of Barrick. I wasn’t expecting it to be quite so close :)

Anyhow, taking the iShares example, with ~$10B in the XIU fund and ~$20M in XEN, it looks like such a tiny part of the capital in Canadian markets is following a socially responsible investing strategy that you’d never see the effect in real life. Plus, it looks like the reason that the SRI funds got just as good results as the general market is that they look a lot like closet index funds!

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