Comments on: Are Values-Based and Socially-Responsible Investments Worthwhile?

By: Writers Coin

Writers Coin — Thu, 17 Dec 2009 02:39:28 +0000

Your last sentence says it all: investing really isn’t the place to do your charity work. Investing is about making money, so this is only going to get you in trouble.

And I’d be very careful, this is shocking to me:

Curiously, the FaithShares funds do not list each fund’s holdings in either their prospectuses or statements of additional information.

By: John DeFlumeri Jr

John DeFlumeri Jr — Thu, 17 Dec 2009 01:02:58 +0000

To me they are no different than any other similar choice. An attractive name gets more money though, but it’s no indicator of value!

John DeFlumeri Jr

By: Paul Williams @ Provident Planning

Paul Williams @ Provident Planning — Thu, 17 Dec 2009 00:16:15 +0000

No problem, Flexo! Thanks for letting me share it. I didn’t mean to plug my own article, but I feel pretty strongly about this – especially when the fund managers or proponents imply that anyone who invests another way just isn’t quite as holy or righteous.

By: Flexo

Flexo — Wed, 16 Dec 2009 23:16:12 +0000

Thanks for sharing the link, Paul!

By: Peter

Peter — Wed, 16 Dec 2009 17:59:47 +0000

To some degree I appreciate that people want to invest with their values. After all I write a faith based personal finanace blog, and I want to honor God with my money. When you look deeper at it, however, by investing with some of these faith based mutual funds you’re really not being a good steward of the money that God has given you. So many of them have such high costs, and while performance may not be horrible – you could be doing a whole lot better just by investing in a low cost index fund. I don’t believe it’s a salvation issue to be investing in low cost mutual funds that may contain some stock of a company with questionable ethics, for many of the same reasons as Paul enumerates in his article above.

By: Paul Williams @ Provident Planning

Paul Williams @ Provident Planning — Wed, 16 Dec 2009 16:02:56 +0000

Flexo,

I agree. If you actually want to make a difference, then you’re better off volunteering, lobbying, or giving to the causes you support. Like KC said, these funds are just playing off people’s values but the investors would be quite surprised if they actually researched the companies in those funds.

I write about personal finance from a Christian perspective and I don’t recommend faith-based investing at all. The fund costs are high and you’re not actually doing any good in the world. I outlined my other reasons here. The logic behind it is very flawed, though I guess most of the fund managers mean well.

By: RJ Weiss

RJ Weiss — Wed, 16 Dec 2009 15:59:49 +0000

I don’t blame people for investing in these types of funds. If that is what they beleive in, that’s great.

From a financial perspective, it probably makes more sense to just invest in a low cost index fund. Then with the money saved through expenses and gained through better diversification, donate that money.

By: Matt SF

Matt SF — Wed, 16 Dec 2009 15:49:04 +0000

To each his own I suppose, but it’s far better in my opinion to ignore your personal feelings (faith, past transgressions, etc) when making an investment.

I agree with KC, I think it’s a marketing ploy to fish out naive investors. Not to mention, if you only want to only invest in “ethical” companies, best of luck to you in finding them. That’s got to be a very short list.

By: Flexo

Flexo — Wed, 16 Dec 2009 15:47:01 +0000

Heh. I fixed the Freudian typo. I agree, if you want to stand by your convictions, you have to do much more than choosing funds marketed to your values.

By: KC

KC — Wed, 16 Dec 2009 15:20:30 +0000

“Ass” Marketplace (paragraph 6) – really? That’s too funny, especially in an article about values – hee-hee!

As for moral funds I don’t let much stop me from making money. If I followed my values I wouldn’t be able to shop at 90% of the places I shop/eat at as they would offend me in some way. And I probably wouldn’t own 90% of the stocks I own because I’d disagree with their values in some way or another. However I will note that I have never been able to bring myself to buy stock in a cigarette company – I just can’t do it – I’ve read too many books about the subject and I live in the home city of RJR. I’ve seen the effects and I just can’t do it. But that’s my hang-up, not something I would enforce on someone else if they asked for stock advice.

These funds are just another niche to suck money out of naive investors. They think they are buying a fund that is directed in one way or another so they can feel good about themselves. But chances are if they dug deep enough they’d find something they didn’t like about the companies they were investing in.