Ethical investing

[Goodbook]

Can anyone explain what this really means and what you should or shouldnt invest in?

 

[dysert]

When I've seen the term used, it seems synonymous with "socially responsible investing". So that means you only invest in companies that are, e.g., green, don't violate child-labor laws, are intentionally diverse, don't pollute the environment, etc. As a Christian you may also want to add on things like, avoiding tobacco, alcohol, inappropriate contentography, etc. These companies not only want to return a profit to their investors, but they also want to make a positive impact on society.

 

[WolfGate]

Pretty much as dysert said though I would modify the definition a bit to say "investing only in companies that share your ethics". What is "ethical" however will be viewed differently by people with different worldviews. So if you are inclined to invest only in line with a Christian worldview, you have to be careful about finding an ethical mutual fund, for example. It is a bit easier in one way, but requires much more work on your part, if you choose to invest in individual businesses.

 

[Mudinyeri]

I agree with @dysert and @WolfGate 's definitions. The challenge is finding companies or funds that invest in companies that agree 100% with your ethics.

Investing in an individual business (as opposed to funds that hold equity in many businesses) isn't even a guarantee as the company's management team may change and with it the company's ethics.

I would maintain that so-called "ethical investing" is not possible.

 

[dysert]

I agree with @dysert and @WolfGate 's definitions. The challenge is finding companies or funds that invest in companies that agree 100% with your ethics.

Investing in an individual business (as opposed to funds that hold equity in many businesses) isn't even a guarantee as the company's management team may change and with it the company's ethics.

I would maintain that so-called "ethical investing" is not possible.

Oh I think it's possible -- just very difficult. Seems to me you'd have to pick a small-to-mid sized company to minimize the chances that they have affiliates/subsidiaries that aren't ethical. Then you'd have to monitor them frequently to ensure things don't significantly change (very hard to do with a private company). Too much work. I just buy index mutual funds and hang on for the ride.

 

[Mudinyeri]

Oh I think it's possible -- just very difficult. Seems to me you'd have to pick a small-to-mid sized company to minimize the chances that they have affiliates/subsidiaries that aren't ethical. Then you'd have to monitor them frequently to ensure things don't significantly change (very hard to do with a private company). Too much work. I just buy index mutual funds and hang on for the ride.

OK, maybe not entirely impossible but nearly impossible for the average investor. If you're an "activist" investor with a few million to put into a company ... yeah, you can probably do it.

 

[civilwarbuff]

http://timothyplan.com/

 

[Goodbook]

Could you give examples?
We have this scheme called kiwisaver which is a govt saving scheme. I dont want my retirrment savings invested in dodgy companies. Would it be better to switch to an ethical sheme, or a christian one?
Or just put the money into cash investing i.e just in the bank, term deposits.
One doesnt have to contribute but if you working you can opt in and the govt puts in fifty cents for every dollar you put in. Well, i think thats how it works.
Then they all have different fees, and I found out the one i am in which is just the same as my banks one, charges heaps each month.

Its seems the one i am in, invests in. Car companies, petrol companies and macdonalds. Plus other banks etc. That doesnt seem socially responisble to me!

Could I find one that invests in schools or hospitals, or gardens or something like that. Or churches?

 

[Mudinyeri]

None of those types of companies are inherently ethical.

 

[Goodbook]

Kiwisaver is a mutal fund scheme, you can pick a differnt provider that then invests in mitual funds. I think I just need to find one Im comfortable with. Cos you cant access your money until you are 65 or buy a first home, which is a long way off for me!

 

[Goodbook]

What would you say is an ethical company?

 

[dysert]

Could you give examples?
We have this scheme called kiwisaver which is a govt saving scheme. I dont want my retirrment savings invested in dodgy companies. Would it be better to switch to an ethical sheme, or a christian one?
Or just put the money into cash investing i.e just in the bank, term deposits.
One doesnt have to contribute but if you working you can opt in and the govt puts in fifty cents for every dollar you put in. Well, i think thats how it works.
Then they all have different fees, and I found out the one i am in which is just the same as my banks one, charges heaps each month.

Its seems the one i am in, invests in. Car companies, petrol companies and macdonalds. Plus other banks etc. That doesnt seem socially responisble to me!

Could I find one that invests in schools or hospitals, or gardens or something like that. Or churches?

Did you check out the site pointed to by Civilwarbuff above?

First of all, to get a 50% match on what you invest is a GREAT deal these days! By all means, you should be maxed out in that plan as much as you can possibly afford. Secondly, just because a fund calls itself Christian by no means indicates that it's really a Christ-centered investment. Companies throw around the word "Christian" as an advertising gimmick to get evangelicals to buy in. Thirdly, if you're interested in getting any decent return, you don't want to invest in a cash fund. The return on that is virtually 0.

To find a fund that invests in "schools or hospitals, or gardens or something like that" is going to take a lot of work on your part (as I indicated earlier).

I do all my own investing. The way I do it is to call some big investment firms, like Schwabb, Vanguard, Fidelity, etc., and talk to them (it's free) about what you're looking for. Then you'll be able to narrow it down, at which time they'll send you a "prospectus" (it's free) that lists all the companies the fund invests in. You can then see what your money would be going to support.

Investing isn't hard, but it takes some work -- especially in the front-end, which is where you are now. In your case (50% match), though, it would be well worth it.

If you have specific questions feel free to post them. I'm sure someone here will answer you.

 

[yeshuaslavejeff]

Can anyone explain what this really means and what you should or shouldnt invest in?

Remember the instructions of Jesus, "Love not the world, nor the things of the world." along with many other instructions similar.
Then also
"Be harmless as doves" - i.e. do harm to no one.

Since , for comparison and in the same vein, casinoes (all gambling) brings harm to individuals and families (everyone in many families) ,
and since many families lose everything , and others considerable amounts,
NO MATTER if someone else gains - (the claim / the lure/ of gambling) -
it harms many people, and is unrighteous activity. (maneuvering and marketing financial instruments with the built in caveat - SOMEONE ALWAYS LOOSES) .

It is an awkard analogy - but consider archery with a $100000.00 prize for a bullseye.
But the target is set up in the middle of a sidewalk cafe crowded with people.

On the "market" , there's been many times someone won "MILLIONS" of dollars= even "BILLIONS" sometimes, and corporations, businesses, portfolios CRASH at the same time/ as a result OR providing the winnings....

So, is anyone harmed by that ?

Is anyone harmed if 10,000 people all at once shoot their arrows at the bullseye (surrounded by people who become "collateral damage") trying to win the great financial prize ?
(Rough analogy I know, but the point is the same - many people get hurt. By what other people do. Did Jesus EVER hurt anyone by what HE did ? )

 

[Goodbook]

Shall i ask different kiwisaver schemes to give me a list of what they actually invest in?

Some of them say, no we dont invest in gambling, alchol, drugs, tobacco and inappropriate content, but how would I know what they DO invest in?

I will check if my current on invests on skycity which is the casino here.

Can anyone give me an example of an ethical company that benefits everyone? I was just thinking schools. But a school isnt really a company is it?

 

[civilwarbuff]

Another good place to start.....
https://www.financialissues.org/

 

[dysert]

Shall i ask different kiwisaver schemes to give me a list of what they actually invest in?

Some of them say, no we dont invest in gambling, alchol, drugs, tobacco and inappropriate content, but how would I know what they DO invest in?

I will check if my current on invests on skycity which is the casino here.

Can anyone give me an example of an ethical company that benefits everyone? I was just thinking schools. But a school isnt really a company is it?

Yes, ask for the prospectuses for each of the kiwisaver plans. There you'll find what companies they invest in.

 

[Mudinyeri]

What would you say is an ethical company?

There is no such thing as an inherently ethical company, industry or person. We are all sinners by nature, saved by grace.

I just finished a pretty good book by Larry Burkett called Business by the Book. You might want to read it in your search for ethical investments. Even a company owned by a Christian may be unethical.

 

[yeshuaslavejeff]

Some of them say, no we dont invest in gambling, alchol, drugs, tobacco and inappropriate content, but how would I know what they DO invest in?

It doesn't really matter (what they invest in). The method of the market, the stock market and others, is set up so some profit and others are hurt (they lose, often their life savings).

Most people never get so far as to even consider that hurting others this way is in any way their responsibility - they say it was "free will" or "their choice" to invest.

Which may be true. But it appears still to be harmful activity.

 

[Mudinyeri]

It doesn't really matter (what they invest in). The method of the market, the stock market and others, is set up so some profit and others are hurt (they lose, often their life savings).

Most people never get so far as to even consider that hurting others this way is in any way their responsibility - they say it was "free will" or "their choice" to invest.

Which may be true. But it appears still to be harmful activity.

This view of the market and investing intrigues me. If I tell you that your entire investment is as risk (required by U.S. regulations; not sure about other countries) but you go ahead and invest and do end up losing your entire investment ... I somehow hurt you? You accept no personal responsibility for your decision to invest in an inherently risky "scheme?"

If you want an investment scheme devoid of risk, lay up treasures for yourself in heaven ....

 

[dysert]

It doesn't really matter (what they invest in). The method of the market, the stock market and others, is set up so some profit and others are hurt (they lose, often their life savings).

Most people never get so far as to even consider that hurting others this way is in any way their responsibility - they say it was "free will" or "their choice" to invest.

Which may be true. But it appears still to be harmful activity.

You seem to be opposed to the idea of investing, so I won't argue with you. I do disagree with your implication that investing is a zero-sum game, though. You can invest in funds/companies that offer a decent return without hurting anyone. Everyone wins. That's (ideally) capitalism and is the engine the USA runs on.