Investing With Your Values
So I’m not at all chuffed with the concept of “working for a living”. And it seems that the best way to avoid working for a living is to be independently wealthy, which one accomplishes through some combination of living below one’s means and witchcraft. Or marrying rich. As plans for marrying rich have stalled while I work through my classist antipathy towards the upper crust, I’ve decided to practice witchcraft, aided by an occasional series of book reviews.
Investing With Your Values was written with a nervous reader in mind. Nervous about sacrificing financial interests on the altar of social responsibility, nervous about whether or not socially responsible investment can actually make a difference, nervous about investing and personal finance generally. I was evidently not the intended audience.
The book is divided into four sections.
- A hand-wavy overview of the history and philosophy of ethical investing. The authors make up their own special hippy jargon here, including the term “Natural Investing” for the SRI movement, which is just silly. I skimmed through this section without learning anything useful.
- The four “spokes” of the “Natural Investing Wheel”. Silly hippy terminology notwithstanding, this section provides a reasonable introduction to the methods by which one’s money can be put to good use, with screened investments (both affirmative and avoidance screens), community investing, and shareholder activism. Too much space is devoted here to a list of potential screens, including things like “Do you want your money going to companies that brutally exploit adorable third-world puppies? Yes or No?” and “Maybe you could invest in an energy-efficient granola factory”. Not enough space is given to the impact that different investment screens will have on one’s range of acceptable portfolio choices, or the time required for an individual investor to implement various screening measures. I already know more or less what I care about and was looking for some practical guidance. No dice.
- The “Natural Portfolio” Guidebook. Aha, it’s the practical guidance I was looking for, right? Sort of. Section III covers mutual funds, special-interest bond funds, real estate investment trusts, annuities, stocks, and asset allocation. With so much to cover, there’s not much time for specific tips. I’ve already made some decisions about my asset allocation for the near future (stocks! stocks! stocks! passively managed index funds!) so I flipped straight to the section on stocks. It’s short, declares that it is very difficult for an individual investor to do her own social screening, and refers back to the appendices.
- New Age Revolutionary Claptrap. The authors are to be commended for refraining from analogies between ethical investments and quantum physics. They do, however, use the phrase “evolutionary dance” more than once. There’s no information here at all, let alone any useful information.
- The Appendices. Lists of pre-screened companies, watchdog organizations, community banks, and other resources. In keeping with the rest of the book, these lists are not as useful as they might seem at first glance – partly an artifact of the 1999 publication date.
Bottom line: not a bad book to read if you’re sitting and thinking about maybe investing some of your next paycheck, but next to worthless if you’re sitting and thinking about investing and your browser window is opened on your online brokerage account, waiting for your input.