Ethical investing

dysert · Jul 7, 2016

MoneyGuy said:
I'm a certified financial planner in Canada. I've had a few clients ask about ethical investments but have rarely used them. It's hard to guarantee something is ethical. Take a stock, for example, maybe a bank. You may think the bank invests ethically but the bank may invest into companies that don't meet your criteria. That can apply to most stocks.

Risk has been discussed here. Don't fear volatility, embrace it. It can be the friend of a long-term investor and can increase your returns. Ignore volatility and you should do well.

Regarding real estate, that asset class tends to underperform stocks.

This covers some of the topics of this discussion. Interesting topic.

Is a CFP in Canada different from a Certified Financial Analyst in the US? I know to be a CFA it's a lot of work and includes continuing education. Just curious if a CFP goes through the same rigors?

WolfGate · Jul 7, 2016

dysert said:
Examples of companies that endorse inappropriate contentography would be Playboy, Penthouse, Maxim, et al.

Many would add to that Time Warner, Comcast or any of the cable companies that deliver content.

createdtoworship · Jul 7, 2016

Goodbook said:
not sure what you mean refuse to invest in any company you boycott.
But invest in ones you happy to invest in?

For example I was just looking at superlife Ethica's list of shareholdings and one of them is Nestle.
Nestle is notorious for bad ethics, I think it was them that were involved with the whole GE food thing. Novartis is also a drug company.

Koinia emailed me back with some info. On their website they just say no to

alcohol, breweries, inappropriate contentography, armaments, tobacco and some fossil fuel companies that damage the environment.

(what would an example of a company that endorses inappropriate contentography???)
But I'm thinking I would add drug Pharmaceutical companies to that list because of all the damage they do to people, including me. I would not want to give them any money as part of a mutual fund.

well again, refusing to invest in them is only a small limitation.

for example if nestle is into bad stuff (and I don't know if they are),

then I would send a line to AFA.net and have them contacted through them, to see if it is legit.

if it is legit, they would be boycotted (again through AFA), and sent out an alert to boycott them.

it's the american family association.

but to find a good company that has no problems is hard.

and those companies one may not even want to invest in (they may not be performing enough on the markets)

again, I don't refuse to invest, because I typically only hold my funds in a company for hours, or days.

boycotts are longer lasting (with my version of investing)

if you are typically long holds (like mutual funds), you can see what their allocations are on their site, and what stocks (up to 5% each) are their performing stocks.

mutuals tend to make a lot less, less than 10% a year.

but some, are more obviously.

some a lot less, into the negative.

I do short term investing. Not long term.

because you can tell what the market will do short term. not really long term.

createdtoworship · Jul 7, 2016

dysert said:
Is a CFP in Canada different from a Certified Financial Analyst in the US? I know to be a CFA it's a lot of work and includes continuing education. Just curious if a CFP goes through the same rigors?

CFP are basically people to help you get out of debt, and put you on a budget. Personal growth stuff.

they are not investors or analysts.

Goodbook · Jul 7, 2016

Kiwisaver is a long term investment. Its for retirement or to buy your own home.

So you can choose cash, balanced or growth funds.

If choosing growth funds, since Im along way off from retirement or buying my own home, its not going to be a short term investment. So what companies would be ethical to invest in? Or should I just leave it as cash sitting in a bank.

Everyone is confusing me now. Koinoia say they dont charge any fees, the only thing is ROI gets taxed. It seems to me the only christian one Ive found.

Grosevenor has social responsible growth funds, but they also have ones that arent. I dont know if having an ethical option is just a greenwash when they could just be ethical only. They say they have low fees, but they still have fees.
However they are rated the best kiwisaver by peoples choice.

Goodbook · Jul 7, 2016

I wonder if buying a church building could count as your first home. But then id have to live in it. Hmm.

dysert · Jul 7, 2016

Goodbook said:
Kiwisaver is a long term investment. Its for retirement or to buy your own home.

So you can choose cash, balanced or growth funds.

If choosing growth funds, since Im along way off from retirement or buying my own home, its not going to be a short term investment. So what companies would be ethical to invest in? Or should I just leave it as cash sitting in a bank.

Everyone is confusing me now. Koinoia say they dont charge any fees, the only thing is ROI gets taxed. It seems to me the only christian one Ive found.

Grosevenor has social responsible growth funds, but they also have ones that arent. I dont know if having an ethical option is just a greenwash when they could just be ethical only. They say they have low fees, but they still have fees.
However they are rated the best kiwisaver by peoples choice.

I'm sorry you're confused. I honestly don't know why you should be.

You and I would have different investment philosophies, but I'll try to put myself in your shoes. In your shoes, I'd be opting for the growth fund. Definitely not cash, because your money won't grow in cash. You're young enough that a balanced fund is too conservative. You want your money to grow, grow a lot, and grow for a long time. The growth fund is designed to do just that.

Goodbook · Jul 7, 2016

I dont know if we have a watchdog like afa in nz.
But thanks for letting me know about it.

Anyway theres still lots to learn as im doing a course on money management. Ethical investing is just one thing i found out through my own research even though this course doesnt really talk about it.

I do see the effects of land speculation putting up house prices and therfore more homeless ppl and over crowding. Some people have more than others, thats just life. But rich people just get richer and poor do get poorer. However, in the Bible with the parable of the talents Jesus suggested that even if you have little you can grow it, if you have more you can grow more, but if you just waste it you will have nothing.

Its about being a good steward of what you do have.
Also, one parable says we can be friends with unrighteous mammon and they may let us live in their palaces.

The point is not to love money...ie. Hoard it for yourself.

Mudinyeri · Jul 7, 2016

Perhaps to clear up some confusion:

1. Truly "ethical" investment is virtually impossible for the average person.

2. "Cash" investments are typically in money market funds here in the U.S. You'll earn a little bit of interest on your money but not much. The catch - your money is then invested by the bank where they see fit.

3. Rich people do not always get richer and poor people do not always get poorer. I was born literally dirt poor (our home had dirt floors in the basement) and would be considered by most people now to be "rich." There are hundreds or thousands of people who do the same thing every day. Likewise, I've watched rich people squander their money, fail at business or otherwise go broke ... and I've been broke along my journey as well.

4. Residential land speculation generally creates homes for people to live in rather than creating more homeless. More homes does not equal higher prices (assuming constant demand). The law of supply and demand would say exactly the opposite. Perhaps a couple basic courses in economics would help you understand concepts such as this.

WolfGate · Jul 7, 2016

Don't stress so much over the fees if they are on the low end. The fees are paying for someone who studies the market as their profession to make investing decisions using experience and knowledge that very few of us who are not financial professionals can match. A fund that simply tracks a stock index doesn't require decision making, so funds can be extremely low. If someone is spending pretty much all their working hours studying the companies in their funds and possible replacements, fees will be higher. But if all works as it should, overall you'll end up earning more with a managed fund than you would if you did it yourself, so that more than makes up for the fund. It does require you to be comfortable with how the fund has done compared to the indexes over the long term, but if so the fees can be worth it.

Goodbook · Jul 7, 2016

No the fees for my current one are really high. I didn't know this till I got hit with it and they didn't warn me.
I am going to switch but just need to find the one I'm comfortable with and isn't investing in anything unethical.

Creating more homes is actually a good thing but they are not affordable so nobody can buy them that needs them.
NZ is different from US so please don't assume the same things about rich and poor. Standards of living are relative. Ours has actually dropped over the years.

It seems like absoultely nobody on here can tell me what is an ethical investment is which is disappointing as I thought this was a christian forum and people would actually know more about this topic.

WolfGate · Jul 7, 2016

Goodbook said:
It seems like absoultely nobody on here can tell me what is an ethical investment is which is disappointing as I thought this was a christian forum and people would actually know more about this topic.

If that is how you feel then I think many of us are hearing a different question than what you are really asking. Because I think several people answered the concept of what an ethical investment would be and how to determine if a fund meets that. Are you really asking for specific funds/companies that would be ethical? Or something else? Perhaps rephrase what you need so we can try again.

buzuxi02 · Jul 8, 2016

Goodbook said:
The bible mentions about investing and even Jesus told a parable on it about the talents. I dont just want to bury mine in the ground. At least put it in the bank where it could earn interest.

Ethical investing means something different to different people. I probably would not invest in a cannabis start up for example. But I have no problem in investing in big tobacco for their generous dividend pay outs. I have never smoked a cigarette in my life and never plan to do so. If I ever did make a large amount of money on a tobacco company I could then donate some of the money to cancer research.
The petroleum oil sector (up until recently anyway) was a great place to invest in. You dont like fossil fuels? Take some of your gains and add solar panels to your house. Defense companies have been good to investors for some time now. if your conscience troubles you then dont invest in them, or if you do give away some of your gains to a charity that helps people in war torn areas, etc.
Monsanto is a hated company, but in the long haul has been very good to investors. Take those dividends and sponsor some of those needy children you hear about on late night television.

Goodbook · Jul 8, 2016

Ok i will rephrase my question.
What would be ethical for a christian to invest in? And what would not be ethical. Is making making a return your priority and what would be most pleasing to God?
Please refer to scripture in your answer.

dysert · Jul 8, 2016

Goodbook said:
Ok i will rephrase my question.
What would be ethical for a christian to invest in? And what would not be ethical. Is making making a return your priority and what would be most pleasing to God?
Please refer to scripture in your answer.

Mat 25:16-> Then he who had received the five talents went and traded with them, and made another five talents.
Mat 25:21-> His lord said to him, 'Well done, good and faithful servant; you were faithful over a few things, I will make you ruler over many things. Enter into the joy of your lord.'
Mat 10:16-> "Behold, I send you out as sheep in the midst of wolves. Therefore be wise as serpents and harmless as doves.

dysert · Jul 8, 2016

Here's one for you:

The FTSE4Good US Select Index. The FTSE4Good US Select Index is maintained by FTSE Group (FTSE), a widely known global index provider that currently calculates over 120,000 indexes daily. FTSE selects stocks from approximately 700 of the largest public companies in the United States by evaluating each company on various criteria. The Index excludes companies that have violations or controversies related to (1) environmental impact, (2) human rights, (3) health and safety, or (4) labor standards, or that (5) fail to meet criteria related to diversity. Also excluded from the Index are companies that are involved with (1) weapons, (2) tobacco, (3) gambling, (4) alcohol, (5) adult entertainment, or (6) nuclear power.

FenderTL5 · Jul 8, 2016

Just a guess:
It's a term invented by some shyster in order to sell his/her latest investment book or program.

WolfGate · Jul 8, 2016

Yeah, that would be just a guess.

Goodbook · Jul 8, 2016

So koinoia are shysters too?
They say its the ethical investing for christians.

So...you should just not invest at all and bury your money in a hole in the ground and leave it for pirates???? Or come back when you 65 if you havent forgotten where you put it?

Please refer to my revised question. Otherwise I will not even respond to your post.

Goodbook · Jul 8, 2016

I found this

http://www.stuff.co.nz/business/money/70402581/Revealed-Where-your-KiwiSaver-cash-ends-up

Scripture comes to mind, do not worry about tomorrow...
Yet another scripture says sell all you have and give to the poor.
another says people buy and sell and get gain and do this and that (James 4:13-14 )but what is your life, but a vapour..
I may not even live to 65!
However this is a govt scheme so its not likely to fail like a finance company with a limited time span.

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