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Should our values—religious, civic or otherwise—guide our investment choices?

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Philip Stein
Philip Stein
17 days ago

We should make investment decisions to maximize return within the bounds of reasonable risk, not to promote social beliefs.

The proper response is to donate a portion of your investment gains to support causes you believe in.

It may be noble to shun investments in companies whose products or services we feel run contrary to our values. But as long as there are customers for these products or services, someone will provide them.

J S
J S
17 days ago

Sure they should…but not others (e.g. ESG)

Matt White
Matt White
1 month ago

My values do influence my investing, but that doesn’t mean I have to agree with everything a company does—or everything that everybody who works for that company does—before I would own a share of it. In fact, that would be an impossible task even if I wanted to try.

As far as ESG investing goes—as we currently know it—I’m not particularly interested in paying a fund manager to pick investments based on criteria that they’ve created.

Index funds complicate this question. I am interested in considering new ideas and continuing to think about the best ways to make informed investment decisions that align with my values.

From another angle, how we spend and give away money are investment choices in their own right, and we all make these daily choices with our values.

mjflack
mjflack
1 month ago

I’m going to approach this from three angles:
1. Buying stock or bonds of a company on the secondary market has zero effect on its ability to function as an ongoing concern. If everyone who owns Phillip Morris (PM) sold their shares tomorrow, it would have zero effect on its ability to sell cigarettes the day after.
2.Buying initial public offering (IPO) shares or bonds does effect a company’s ability to function as an ongoing concern, so if your god, conscience, or otherwise says no, then don’t buy.
3.If you let your religious, civic, or otherwise guide your investment choices you will be prevented from buying any security, as every public company has a dark side. Remember what Balzac (and The Godfather) said: “Behind every great fortune there is a great crime.”

Andrew Forsythe
Andrew Forsythe
1 month ago

Since we invest almost entirely in broad index funds and ETFs, we undoubtedly own small amounts of companies whose values we don’t share. I guess the alternative would be to eschew those funds and ETFs and instead choose only ESGs. But I’m just not willing to abandon my belief in the wisdom of broad based, low cost, tax efficient index vehicles.

I admire good folks like Rick who are willing to take the time and do the work to arrive at investments which reflect their values. But as Mike points out, there are also other more direct ways to express your values and do good.

Rick Connor
Rick Connor
1 month ago

This an interesting question. For me the answer is yes. I believe we should live our lives according to our values. The trick is to do an honest assessment of our values and apply them in a rational fashion. There may be more positive and effective ways to bring about things we value than to not invest in a certain asset.

A friend once told me that he felt much of life was about “where to draw lines in the sand”. Many of us may agree to a value in principle, but draw the specific line in different places.

Mike Zaccardi
Mike Zaccardi
1 month ago

Call me a cold-hearted capitalist, but I simply want to maximize my investment returns. Of course, I’m not going to directly fund nefarious governments or finance a mafia, but I’m A-OK owning high-carbon-emission stocks and tobacco companies. It’ll be interesting to see if new exchange-traded products come out that really push the anti-value envelope.

I’d rather donate my time and money to causes I believe in rather than invest that way. Donating highly-appreciated taxable stocks, QCDs, and leaving pre-tax IRA and 401(k) money to charity are great ways to do it.

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