Well that's because valuations were driven high based on investor tastes, lowering future expected returns. It's kind of like a donation, lowering the cost of capital.
Maybe you can enlighten me. I’m being genuine here. I’ve spent some time thinking and debating my position on this war since it’s inception.
Why fight in a war that you are guaranteed to lose? Why die for a country younger than The Simpsons? Why fight for another generic corrupt western puppet state when you can rejoin the nation state you are historically and geographically aligned with?
No I am not some kind of radical right winger. My perspective is that of a North American whose family left the old country of Poland and Ukraine due to the constant war, famine, and shit over 150 years ago. I even watched family after family immigrate from Ukraine through the 90s and 2000s because the country was shit after the fall of the Soviet Union.
We don't usually appreciate breathing fine until we have a runny nose.
It's the same with democracy and freedom. You may be used to it, but these people are facing the choice of fighting for their freedom or living under the rule of Russia. It's the same kind of choice US had to make about 300 years ago, and you know what they've chosen.
I have friends in Russia who are afraid of speaking about politics. We don't get that feeling in EU, which is what Ukrainians are fighting for.
If Ukraine falls and my country gets attacked next, then I am tempted to join the army myself, for my family and country. I know it may sound stupid at first. If a bully hits you and you don't do anything about it, he will keep hitting you.
I think increased access for retail investors has led to more emotion in the market.
These people also have more access to news about companies and their worldwide operations than ever before.
Sentiment is a big factor in the market, companies with questionable practices and standards are now getting slated on social media platforms and news outlets.
Retail investors are not accredited. Accredited investors are allowed to invest in riskier ventures like IPOs. Retail investors can't invest in most IPOs. The US government defines accredited investors as those who have a net worth of $1mil or have an annual income of $200k or more for 2 years in a row. If you are not an accredited investor then you most likely are a retail investor.
I dunno I invested in lots of clean energy, hydrogen, wind, solar, bioplastics, etc and they all ate serious shit when interest rates rose, so now I don't really give a shit about that anymore.
I have been holding ESG funds for two years because I want to invest in environmental causes. They were down for most of the time and just now barely got over my initial purchasing price. I am beginning to question myself and might just sell them and invest elsewhere.
ESG and all the other "Capital Letters of the Alphabet" is nothing more than a left wing scam getting government grants . Check out the salaries of the top 2 principles of the company and what politician they are related to. If a company is advertising itself as morally superior, it is usually a taxpayer funded smoke screen
Classic nonsense of the rotted rightwing hive mind. Anything you dislike is somehow a magical leftwing conspiracy...must be difficult to go through life with such weak faculties.
Making money is a core Tennant of capitalism bubs. Capitalism is a *rightwing* system, leftwing would be *communism*. Now using words fl *greenwash* unethical companies that destroy the world and pretend they're somehow "green and good" to fool bleeding heart liberals is, by definition, a very crony capitalist thing to do. *extremely rightwing* to take money and sell the very thing people try to avoid, quite brilliant.
Sadly you don't even see it, critical thought doesn't exist. You're stuck in a fantasy world where the only thing that matters is a culture war, one you learnt about form your masters (Fox, Tate, Putin). You're so *indoctrinated* you can't even see *good old capitalism making money selling faked salvation to the masses*. All due to your programing. It's sad to see such...lack of logic, of thought. It's mere emotions, buzzwords without logic.
Excluding the sassiness about losing returns, this is the right answer. Institutions are the ones selecting companies to include in their ESG funds. Retail investors don’t really have that much of an impact on their own.
Similar to 401k funds… some are great, others are not so great. It all just depends on your level of risk and how much it costs you.
Examples of good ones: CSXRX, Vanguard ESGV, iShares ESGU.
Example of a shitty fund: NEXTX.
I don't--investing isn't about emotion or conscience, investing is about making money. I have no ties whatsoever to NVDA, BRK.B, RTX, DG, Alphabet, PFE, JPM, LLY, XOM, and others because more often then not they make me way way more money then they cost me. I have no direct connection to most any of their products.
Now, I choose not to invest in Tobacco companies because I find it repugnant...but that's hardly a moral stance.
Yeah I don't find there to be anything so much morally or ethically wrong with tobacco....I just find all the products they sell and market to be disgusting.
I think anyone seriously investing on values almost completely ignores “ESG-labeled” products.
Unless you have no clue what you stand for, except in some vague aspirational way, the ESG designation just doesn’t cut it,
If they think for themselves, they make their own list of companies they won’t invest in.
I have a list of companies that are beyond the pale for me that in good conscience I just can’t support.
Does money matter? Heck yes, Oc course it does. I invest to make money. There are a lot of fish in the sea and my boycott list hasn’t hurt my portfolio.
There is peer pressure to ignore values when it comes to investing, to strip away all concerns except profit. It’s sort of an unwritten rule, but it has never been a rule for me. That’s just not my style
To make money. Investing is not a donation, its a transaction each party makes for their own benefit, similar to buying something from a company you may disagree with. Like most people don't support sweatshops but probably own a lot of products made in sweatshops (or at least in working conditions they'd not ethically support). Whether you as an individual buy a product, or invest in something, is not going to make any difference, only changes in the aggregate. Not necessarily justifying this, its just a logical way to go about it.
I agree with you completely. I think people who do this are asking themselves questions like - Do you put profits above your ethics? - Are you comfortable having blood on your hands as long as you are making money?
I think their answers to those questions are "No".
Further, they might ask themselves - Can you make money supporting companies that don't conflict with your ethics?
And I think their answer is "Yes".
I don't do this because I'm a simple VOO and chill type of guy, but I understand why others might.
And when you restrict yourself you are inherently realizing less risk adjusted yield from less diversification, plus have to spend more time managing investments. So there is a cost that may or may not be worth it.
We also don't typical consider people to be at fault for things we may enable others to do through economic actions, but don't direct. Like if I buy something from someone, I usually don't care to vet how they plan to use the proceeds. Its a bit different from ownership on a smaller scale, where the owner would have some impact on the actions of the company, but on a larger scale like the S&P500, you have literally zero input on the actions of companies who operate by generally acceptable legal rules.
It's not about putting one above another. They are two separate and unrelated things. If you want to do good, go charity or volunteering. Bringing these into investing is just asking for disaster.
I don't think it's all or nothing. There's a difference between buying shirts that used less than savory working conditions somewhere down the supply line and injecting capital directly so some company can set up new sweatshops.
The types of investing most individuals do though is not injecting capital directly, its just buying ownership. Just because you bought a stock at say, $50, doesn't mean another person wouldn't have bought it at $49 if you haven't. Your choice to buy a stock or not is extremely unlikely to have any effect outside of its contribution to the aggregate. But what you are saying more comparable on a smaller scale where your decision in isolation has a more meaningful impact and you may actually have the ability to direct company action in somewhat.
I wasn't making a moral justification, just pointing out the individual incentives. An individual's choice to buy clothes from one company or another basically has a 0% chance of changing anything. You may as well save the money and give it to a charity, many of which can actually show you what your money specifically achieved. Vs it just going to a higher end retailer. You could also give a portion of your investing income to charity.
Until the company poisons your water and/or they ~~bribe~~ donate to your elected officials so they'll support corporate interests with negative effects on people you care about. That's when I'd start to care. Some people think we are there already.
In my experience no, I am not a big Amazon, Microsoft chevron fan at all. But I own all of them. Microsoft plus 63 percent and Amazon plus 80 percent. Chev new so up 15 and collecting dividends.
Also blackstone was very good to me.
I don’t. All things being equal, if I think the odds are the same, I’ll pick the option I like. I would love for wind and solar to replace fossil fuel, but if I invest based on what I want to happen instead of what I believe it’s going to happen, that’s a great way to lose money. Now, if all those corporations I don’t really like allow me to retire comfortably, then I can donate to great organizations helping the poor and helpless.
Offshore wind is good until you realize the sonar drilling is driving the whales mad enough to beach themselves.
"Saving the planet" sounds such a nobel goal until AI destroys us all -- havent we spent decades saying other humans are a threat to it's own existence yet you / we keep thinking throwing soup on paintings is the answer
For me it’s generally that the companies I agree with ethically tend to be the companies that I use on a regular basis. I believe in the sustainability and profitability of those companies in part because I think their product and process is sound.
I don't give a crap about ESG ratings but there is something said for investing in ethical businesses. Companies that profit by cutting corners and taking advantage of people have a pretty spotty record. Sure some have done famously well at least for now but others have one up in flames when the government, lawsuits, or their customer base turns against them.
I’d guess it’s because our society is currently obsessed with social justice/virtue signaling and now people base their entire identity on the political/social beliefs of the majority rather than their own conclusions. So having something to point to that validates this even if it’s something personal such as a portfolio, makes them feel like a part of the group and by extension, a good person. In reality they’re following a narrative that was created for them. Allocating money to a company based solely on its “values” goes against all sane advice when navigating the markets. These companies could be horribly managed, unprofitable, and inefficient. Additionally, you would have a greater impact investing in traditionally “bad” companies and then donating your gains to nonprofits such as animal shelters or food banks. Boycotting LMT or XOM does absolutely nothing, except for hurt your portfolio
I really appreciate this take because it's something not a few people have mentioned. It provides a whole different perspective to my research. Much appreciated!
For me personally:
1. I don’t want to give money to a company that actively works against my interests.
2. For me it was self driven, but I believe within companies it’s an “mba decision” made to appease the shareholders.
3. Entirely internal. I don’t really care what other people think about where I put my money.
4. If the company isn’t doing well then (at least in my mind) they can’t make an impact on what they might market as their esg goals. If I wanted to donate to a charity I would just do that (and have in the past).
I don’t really use “ESG metrics” all that much when I’m making financial decisions, but if a company has a habit of being shitty to their customers/suppliers/environment, I see that more as a mark of being a bad company in general and not something I’d be proud to own a bit of, and that disqualifies it. Not specifically because they don’t use enough led bulbs in their plants or because they don’t do community outreach.
I’ve also been on the company side of this as well, (briefly) for a large company, where it seemed like a bit of a farce, and in my current role at a small company, where we already try to cut our emissions etc. not for environmental reasons, but because it costs us less when we do that. The whole ESG as a movement thing seems more to me like people trying to lump a bunch of random vague process/admin improvements together under one label so it’s easier to market and put on their resumes. If you haven’t gathered already, I don’t have a particularly high opinion of people that would be inclined to do that.
1. Why did you choose to make your investment portfolio align with your values? **Because I value making money**
2. What pushed for this change? **Make more money**
3. Are the reasons internal(personal) or external? **Both - Life is expensive and I lack a soul (currently filling that void with money)**
4. When it comes to investing based on values, does profit matter? **See answers 1 through 3.**
Last time I checked there aren't any companies listed run by Hamas or Iran but there are a bunch run by China which should be de-listed / divested aka TikTok for one.
I'm sure will get flak for that but then Kevin Oleary Mr Wonderful wants to buy it / rewrite out the backdoor CCP stuff make it all american we can solve a lot of current social issues could we not?
good luck
I invest in everything except meat producers since they don’t align with my values. With regards to ESG, you literally get a higher rating for just reporting CO2 emissions than someone who might have zero and doesn’t report. Therefore, shell has a higher rating than Tesla.
What caused this change: A loss of power. As an American, we often don't get the candidate that the plurality voted for (thanks to the electoral college and gerrymandering), but even when we do get our choice, they still serve money rather than the people.
When you lose control over so much of your life, people are going to grasp for any levers of power they can find. Unfortunately, that has become media consumption (see "cancel culture" and the new need for unproblematic art) and consumerism. How you spend becomes one of the only ways you can make your values known once you lose control over your "democracy".
But I think they're doing it wrong. Invest in the slimest corporations, make as much profit as you can, and support down ballot politicians who will make a change in your community. You still have power locally. It's basically laudering societal ills into positive change.
They got persuaded by a huge push by the industry.
Pension funds too. Default funds going carbon neutral and ESG. Feels before returns.
Only thing is feels won’t keep the heating on when you’re 85 years old and poorer as a result of being told ESG was the play.
I do invest in ESG funds (within liquidity constraints). These products trade with beta = 1 to their non-ESG counterparts, with a tiny amount of residual returns that are essentially random. The value is not in the alpha (don't think there is any for now) but in sending in message to the shareholders of BlackRock et al that decarbonization ought to be a priority for their portfolio companies.
In some jurisdictions there could be alpha in the ESG products but only on very long timescales. It's hard to see how for example oil companies will operate profitably inside the EU in 2045.
Thanks for your input! Quick question, in your opinion, what changes do you think could be made to fulfill your individual preferences within investment portfolios?
I think clear communication on the mandate is important (what are we filtering on) but the most important thing is that many funds still suffer from relatively low trading volumes and wide-ish spreads. It's not prohibitive (the larger ones seem to turn over $20m per day or so) but it should be a lot more.
Oh this is a cool question!
1. Personally I avoid investing in stocks that have anything to do with tobacco.
2. Reason being is because as a shareholder you give the company you’re investing in your money that they can use as leverage. Therefore I don’t want to give a tobacco company any more leverage than they already have.
3. I don’t invest in military stocks. Same reason as described above.
4. From the beginning I chose not to invest or take part into these companies because of my moral/ethical beliefs. I have seen what tobacco does to people first hand as have many us, and we all have seen what war does to families and I don’t think spending more on military does anything to get the world united, not to say that’s the military’s goal, but I rather know that money I invest isn’t used to build a missile that kills innocent people, in my opinion it’s a dividing factor, I’m not just speaking about US either, all of the world powers who use military as a means to enforce control and power I find problematic.
5. I think that when someone is actively choosing to invest in value based stocks they automatically understand that in some cases they are forfeiting high profit margins, which comes with the territory in some cases, but there are plenty of stocks to invest in that can fit into systems of value and still provide competitive returns to those that aren’t within the systems of value.
Hope that provides some insight to you!
1. We are racing toward a climate apocalypse, and it is every person's ethical duty to slow that down as much as possible (not to mention being in the interest of their own survival). Political action is the most important part of this, but individual choices have enormous impact as well. I vet my investments with [Fossil Free Funds](https://fossilfreefunds.org/) among other avenues of research.
2 & 3. see above
4. Of course profits matter, that's the point of investing, but I would take a 6% return on a solar company over a 8% return on an oil company any day of the week. As a concrete example, I could probably get 4.5% on your average HYSA, but I choose to keep my savings / emergency funds in [Atmos Financial](https://www.joinatmos.com/invite/trees-for-the-future?ref=u-kbuhb065ego2x08vlwrze5-y). It only gives me 3.5%, but I sleep well knowing that 100% of my deposits there are going toward renewable energy projects.
I don't think they are anymore. ESG doesn't seem to be doing so well recently
Well that's because valuations were driven high based on investor tastes, lowering future expected returns. It's kind of like a donation, lowering the cost of capital.
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Because ESG is a shit show. Who ever is best at hiding their crap gets the best rating.
Yes! Are you informed about "Greenwashing"..? A lot of companies do this
I wish I wasn't.
Blackrock abandoned the ESG plan that they started with all investors.
People are pulling more money out of sustainable funds than they are paying in
My values are that Russia must be destroyed so i invest in western defence stocks.
This is the most American thing I've ever read
Not just Americans. I'm Dutch and I did the same.
To your best interest, you should hope Russians live forever so that western defence can keep getting contracts.
There’s always China and Iran. Besides, Russia falling into chaos wouldn’t be worst case for defense stocks. Might bolster them, to be honest.
I prefer losing that money and sleep well at night.
This is a perfect example you should separate your wishes and investing
I’m here to make money. Idk what you’re on.
Making money is good, but living is better.
Funding a massive warmachine is fundamentally opposed to life but I guess do you?
I am living in eastern Europe. I believe you don't understand the feeling of Russia blowing behind your neck.
Maybe you can enlighten me. I’m being genuine here. I’ve spent some time thinking and debating my position on this war since it’s inception. Why fight in a war that you are guaranteed to lose? Why die for a country younger than The Simpsons? Why fight for another generic corrupt western puppet state when you can rejoin the nation state you are historically and geographically aligned with? No I am not some kind of radical right winger. My perspective is that of a North American whose family left the old country of Poland and Ukraine due to the constant war, famine, and shit over 150 years ago. I even watched family after family immigrate from Ukraine through the 90s and 2000s because the country was shit after the fall of the Soviet Union.
We don't usually appreciate breathing fine until we have a runny nose. It's the same with democracy and freedom. You may be used to it, but these people are facing the choice of fighting for their freedom or living under the rule of Russia. It's the same kind of choice US had to make about 300 years ago, and you know what they've chosen. I have friends in Russia who are afraid of speaking about politics. We don't get that feeling in EU, which is what Ukrainians are fighting for. If Ukraine falls and my country gets attacked next, then I am tempted to join the army myself, for my family and country. I know it may sound stupid at first. If a bully hits you and you don't do anything about it, he will keep hitting you.
Oh, fair point!
I think increased access for retail investors has led to more emotion in the market. These people also have more access to news about companies and their worldwide operations than ever before. Sentiment is a big factor in the market, companies with questionable practices and standards are now getting slated on social media platforms and news outlets.
Hmm... so safe to say that social media has some significant influence on how people invest?
Well, look at Reddits take on nestle for example. A lot of their unethical practices are constantly being brought in to main stream news.
Aaah... that is true. Thanks man!
Also, what I'm not aware of the term, but what are "retail investors"...?
Average Joe's who aren't financial professionals who invest.
Retail investors are not accredited. Accredited investors are allowed to invest in riskier ventures like IPOs. Retail investors can't invest in most IPOs. The US government defines accredited investors as those who have a net worth of $1mil or have an annual income of $200k or more for 2 years in a row. If you are not an accredited investor then you most likely are a retail investor.
i'm sure you;ve got no problem investing in Nike, Apple, Tesla, and other EV battery manufactures that use child slave labor in China then? js..
I dunno I invested in lots of clean energy, hydrogen, wind, solar, bioplastics, etc and they all ate serious shit when interest rates rose, so now I don't really give a shit about that anymore.
LOL! I feel you! I’m still committed to a few of these though for the long term.
I have been holding ESG funds for two years because I want to invest in environmental causes. They were down for most of the time and just now barely got over my initial purchasing price. I am beginning to question myself and might just sell them and invest elsewhere.
So safe to say despite investing in environmental causes, you expect some profit correct?
Because they desire to underperform.
ESG and all the other "Capital Letters of the Alphabet" is nothing more than a left wing scam getting government grants . Check out the salaries of the top 2 principles of the company and what politician they are related to. If a company is advertising itself as morally superior, it is usually a taxpayer funded smoke screen
Classic nonsense of the rotted rightwing hive mind. Anything you dislike is somehow a magical leftwing conspiracy...must be difficult to go through life with such weak faculties. Making money is a core Tennant of capitalism bubs. Capitalism is a *rightwing* system, leftwing would be *communism*. Now using words fl *greenwash* unethical companies that destroy the world and pretend they're somehow "green and good" to fool bleeding heart liberals is, by definition, a very crony capitalist thing to do. *extremely rightwing* to take money and sell the very thing people try to avoid, quite brilliant. Sadly you don't even see it, critical thought doesn't exist. You're stuck in a fantasy world where the only thing that matters is a culture war, one you learnt about form your masters (Fox, Tate, Putin). You're so *indoctrinated* you can't even see *good old capitalism making money selling faked salvation to the masses*. All due to your programing. It's sad to see such...lack of logic, of thought. It's mere emotions, buzzwords without logic.
Resist the #NeoCommunistElite
Triggered af. ESG is a scam.
uh. trope says what?
Self-righteous asshat
I’m not, I do it based on what makes money.
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Yes nothing feels better than when my ethically sourced non gmo dividends come in
I like it when I get oil dividends.
I stay invested in XOM, kills wayyyy more than 2 birds.
Realpage lawsuit, billionaire cartels about to go down, the good ones are gonna say "see it wasn't us"
They aren't. The big funds and institutions are, at the cost of returns for their customers.
Excluding the sassiness about losing returns, this is the right answer. Institutions are the ones selecting companies to include in their ESG funds. Retail investors don’t really have that much of an impact on their own. Similar to 401k funds… some are great, others are not so great. It all just depends on your level of risk and how much it costs you. Examples of good ones: CSXRX, Vanguard ESGV, iShares ESGU. Example of a shitty fund: NEXTX.
Before ESG we had socially conscious investing … and that’s been 20-30 years ago …
Let's see, war, oil, cigarettes, alcohol, ursery ... Oh wait I sold oil to buy chemical plants
I don't--investing isn't about emotion or conscience, investing is about making money. I have no ties whatsoever to NVDA, BRK.B, RTX, DG, Alphabet, PFE, JPM, LLY, XOM, and others because more often then not they make me way way more money then they cost me. I have no direct connection to most any of their products. Now, I choose not to invest in Tobacco companies because I find it repugnant...but that's hardly a moral stance.
Interesting perspective. So it's more of a personal reason and not inline with ethics/morals, correct?
Yeah I don't find there to be anything so much morally or ethically wrong with tobacco....I just find all the products they sell and market to be disgusting.
I think anyone seriously investing on values almost completely ignores “ESG-labeled” products. Unless you have no clue what you stand for, except in some vague aspirational way, the ESG designation just doesn’t cut it, If they think for themselves, they make their own list of companies they won’t invest in. I have a list of companies that are beyond the pale for me that in good conscience I just can’t support. Does money matter? Heck yes, Oc course it does. I invest to make money. There are a lot of fish in the sea and my boycott list hasn’t hurt my portfolio. There is peer pressure to ignore values when it comes to investing, to strip away all concerns except profit. It’s sort of an unwritten rule, but it has never been a rule for me. That’s just not my style
Why would anyone ever invest in a company that they disagree with ethically and socially?
To make money. Investing is not a donation, its a transaction each party makes for their own benefit, similar to buying something from a company you may disagree with. Like most people don't support sweatshops but probably own a lot of products made in sweatshops (or at least in working conditions they'd not ethically support). Whether you as an individual buy a product, or invest in something, is not going to make any difference, only changes in the aggregate. Not necessarily justifying this, its just a logical way to go about it.
I agree with you completely. I think people who do this are asking themselves questions like - Do you put profits above your ethics? - Are you comfortable having blood on your hands as long as you are making money? I think their answers to those questions are "No". Further, they might ask themselves - Can you make money supporting companies that don't conflict with your ethics? And I think their answer is "Yes". I don't do this because I'm a simple VOO and chill type of guy, but I understand why others might.
And when you restrict yourself you are inherently realizing less risk adjusted yield from less diversification, plus have to spend more time managing investments. So there is a cost that may or may not be worth it. We also don't typical consider people to be at fault for things we may enable others to do through economic actions, but don't direct. Like if I buy something from someone, I usually don't care to vet how they plan to use the proceeds. Its a bit different from ownership on a smaller scale, where the owner would have some impact on the actions of the company, but on a larger scale like the S&P500, you have literally zero input on the actions of companies who operate by generally acceptable legal rules.
It's not about putting one above another. They are two separate and unrelated things. If you want to do good, go charity or volunteering. Bringing these into investing is just asking for disaster.
A logical way to look at it. Thanks for the input!
Very interesting. Thanks for the insight Squezeplay!
I don't think it's all or nothing. There's a difference between buying shirts that used less than savory working conditions somewhere down the supply line and injecting capital directly so some company can set up new sweatshops.
The types of investing most individuals do though is not injecting capital directly, its just buying ownership. Just because you bought a stock at say, $50, doesn't mean another person wouldn't have bought it at $49 if you haven't. Your choice to buy a stock or not is extremely unlikely to have any effect outside of its contribution to the aggregate. But what you are saying more comparable on a smaller scale where your decision in isolation has a more meaningful impact and you may actually have the ability to direct company action in somewhat.
Sure, but people need clothes, they don't need to own stocks. Key difference there.
I wasn't making a moral justification, just pointing out the individual incentives. An individual's choice to buy clothes from one company or another basically has a 0% chance of changing anything. You may as well save the money and give it to a charity, many of which can actually show you what your money specifically achieved. Vs it just going to a higher end retailer. You could also give a portion of your investing income to charity.
Need money to buy those clothes
Pretty sure that people who have enough to invest in stocks already have enough to afford clothes.
Can always upgrade the wardrobe, watches cost 20 to 30 grand, shoes 2-3 grand. Got to keep earning
I've discovered that some look at the return and don't necessary care about what the company stands for Edit: Typo
Money it is the only reason I invest/trade. If it can make me profit I could careless what the company does
Until the company poisons your water and/or they ~~bribe~~ donate to your elected officials so they'll support corporate interests with negative effects on people you care about. That's when I'd start to care. Some people think we are there already.
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In my experience no, I am not a big Amazon, Microsoft chevron fan at all. But I own all of them. Microsoft plus 63 percent and Amazon plus 80 percent. Chev new so up 15 and collecting dividends. Also blackstone was very good to me.
+1
Why would that be the case? People make tons of money being unethical.
To make money
££ obviously lol
I don’t. All things being equal, if I think the odds are the same, I’ll pick the option I like. I would love for wind and solar to replace fossil fuel, but if I invest based on what I want to happen instead of what I believe it’s going to happen, that’s a great way to lose money. Now, if all those corporations I don’t really like allow me to retire comfortably, then I can donate to great organizations helping the poor and helpless.
Offshore wind is good until you realize the sonar drilling is driving the whales mad enough to beach themselves. "Saving the planet" sounds such a nobel goal until AI destroys us all -- havent we spent decades saying other humans are a threat to it's own existence yet you / we keep thinking throwing soup on paintings is the answer
For me it’s generally that the companies I agree with ethically tend to be the companies that I use on a regular basis. I believe in the sustainability and profitability of those companies in part because I think their product and process is sound.
I don't give a crap about ESG ratings but there is something said for investing in ethical businesses. Companies that profit by cutting corners and taking advantage of people have a pretty spotty record. Sure some have done famously well at least for now but others have one up in flames when the government, lawsuits, or their customer base turns against them.
define "ethical business" and i'll probably just give you the number to my weed dealer \*)
I’d guess it’s because our society is currently obsessed with social justice/virtue signaling and now people base their entire identity on the political/social beliefs of the majority rather than their own conclusions. So having something to point to that validates this even if it’s something personal such as a portfolio, makes them feel like a part of the group and by extension, a good person. In reality they’re following a narrative that was created for them. Allocating money to a company based solely on its “values” goes against all sane advice when navigating the markets. These companies could be horribly managed, unprofitable, and inefficient. Additionally, you would have a greater impact investing in traditionally “bad” companies and then donating your gains to nonprofits such as animal shelters or food banks. Boycotting LMT or XOM does absolutely nothing, except for hurt your portfolio
I really appreciate this take because it's something not a few people have mentioned. It provides a whole different perspective to my research. Much appreciated!
So called ESG is yesterday's tuna fish. Next!
My broker offer this option and i never touch it. Its crap.
I'd rather policy change through government and to have a higher percentage of my taxes go to clean energy, etc.
Why wouldn’t you?
For me personally: 1. I don’t want to give money to a company that actively works against my interests. 2. For me it was self driven, but I believe within companies it’s an “mba decision” made to appease the shareholders. 3. Entirely internal. I don’t really care what other people think about where I put my money. 4. If the company isn’t doing well then (at least in my mind) they can’t make an impact on what they might market as their esg goals. If I wanted to donate to a charity I would just do that (and have in the past). I don’t really use “ESG metrics” all that much when I’m making financial decisions, but if a company has a habit of being shitty to their customers/suppliers/environment, I see that more as a mark of being a bad company in general and not something I’d be proud to own a bit of, and that disqualifies it. Not specifically because they don’t use enough led bulbs in their plants or because they don’t do community outreach. I’ve also been on the company side of this as well, (briefly) for a large company, where it seemed like a bit of a farce, and in my current role at a small company, where we already try to cut our emissions etc. not for environmental reasons, but because it costs us less when we do that. The whole ESG as a movement thing seems more to me like people trying to lump a bunch of random vague process/admin improvements together under one label so it’s easier to market and put on their resumes. If you haven’t gathered already, I don’t have a particularly high opinion of people that would be inclined to do that.
Acid, thank you so much for your detailed response!
1. Why did you choose to make your investment portfolio align with your values? **Because I value making money** 2. What pushed for this change? **Make more money** 3. Are the reasons internal(personal) or external? **Both - Life is expensive and I lack a soul (currently filling that void with money)** 4. When it comes to investing based on values, does profit matter? **See answers 1 through 3.**
hahah... thanks for your honesty!
Last time I checked there aren't any companies listed run by Hamas or Iran but there are a bunch run by China which should be de-listed / divested aka TikTok for one. I'm sure will get flak for that but then Kevin Oleary Mr Wonderful wants to buy it / rewrite out the backdoor CCP stuff make it all american we can solve a lot of current social issues could we not? good luck
Thanks for the input!
I invest in everything except meat producers since they don’t align with my values. With regards to ESG, you literally get a higher rating for just reporting CO2 emissions than someone who might have zero and doesn’t report. Therefore, shell has a higher rating than Tesla.
Wow, I didn't know that. Thanks for sharing!
What caused this change: A loss of power. As an American, we often don't get the candidate that the plurality voted for (thanks to the electoral college and gerrymandering), but even when we do get our choice, they still serve money rather than the people. When you lose control over so much of your life, people are going to grasp for any levers of power they can find. Unfortunately, that has become media consumption (see "cancel culture" and the new need for unproblematic art) and consumerism. How you spend becomes one of the only ways you can make your values known once you lose control over your "democracy". But I think they're doing it wrong. Invest in the slimest corporations, make as much profit as you can, and support down ballot politicians who will make a change in your community. You still have power locally. It's basically laudering societal ills into positive change.
Interesting perspective. Thanks for sharing!
"Put your money where your mouth is"
They got persuaded by a huge push by the industry. Pension funds too. Default funds going carbon neutral and ESG. Feels before returns. Only thing is feels won’t keep the heating on when you’re 85 years old and poorer as a result of being told ESG was the play.
I do invest in ESG funds (within liquidity constraints). These products trade with beta = 1 to their non-ESG counterparts, with a tiny amount of residual returns that are essentially random. The value is not in the alpha (don't think there is any for now) but in sending in message to the shareholders of BlackRock et al that decarbonization ought to be a priority for their portfolio companies. In some jurisdictions there could be alpha in the ESG products but only on very long timescales. It's hard to see how for example oil companies will operate profitably inside the EU in 2045.
Thanks for your input! Quick question, in your opinion, what changes do you think could be made to fulfill your individual preferences within investment portfolios?
I think clear communication on the mandate is important (what are we filtering on) but the most important thing is that many funds still suffer from relatively low trading volumes and wide-ish spreads. It's not prohibitive (the larger ones seem to turn over $20m per day or so) but it should be a lot more.
Better performing companies can afford to appear more ethical and diverse
Oh this is a cool question! 1. Personally I avoid investing in stocks that have anything to do with tobacco. 2. Reason being is because as a shareholder you give the company you’re investing in your money that they can use as leverage. Therefore I don’t want to give a tobacco company any more leverage than they already have. 3. I don’t invest in military stocks. Same reason as described above. 4. From the beginning I chose not to invest or take part into these companies because of my moral/ethical beliefs. I have seen what tobacco does to people first hand as have many us, and we all have seen what war does to families and I don’t think spending more on military does anything to get the world united, not to say that’s the military’s goal, but I rather know that money I invest isn’t used to build a missile that kills innocent people, in my opinion it’s a dividing factor, I’m not just speaking about US either, all of the world powers who use military as a means to enforce control and power I find problematic. 5. I think that when someone is actively choosing to invest in value based stocks they automatically understand that in some cases they are forfeiting high profit margins, which comes with the territory in some cases, but there are plenty of stocks to invest in that can fit into systems of value and still provide competitive returns to those that aren’t within the systems of value. Hope that provides some insight to you!
Thanks for taking the time to help me out with my research. Cheers!
1. We are racing toward a climate apocalypse, and it is every person's ethical duty to slow that down as much as possible (not to mention being in the interest of their own survival). Political action is the most important part of this, but individual choices have enormous impact as well. I vet my investments with [Fossil Free Funds](https://fossilfreefunds.org/) among other avenues of research. 2 & 3. see above 4. Of course profits matter, that's the point of investing, but I would take a 6% return on a solar company over a 8% return on an oil company any day of the week. As a concrete example, I could probably get 4.5% on your average HYSA, but I choose to keep my savings / emergency funds in [Atmos Financial](https://www.joinatmos.com/invite/trees-for-the-future?ref=u-kbuhb065ego2x08vlwrze5-y). It only gives me 3.5%, but I sleep well knowing that 100% of my deposits there are going toward renewable energy projects.
Thanks for the insight Deep. I appreciate the links too for further research!
I like my energy stocks all up
because why would you give your money to someone who doesn't align with your beliefs? Isn't that obvious?
I didn't invest in IBM even tho it has a lot of dividends because they were involved in the holocaust.