Making a Difference with Your Investments
Oct 31, 2011 03:44PM
● By Eric Packer
The economic turbulence of the last few years has led to significant stagnation within domestic and global markets, and the trend continues. Many people are pulling their money out of the stock market and mutual funds and reallocating their capital to savings accounts, CDs and Treasury bonds. As Americans cope with these seismic economic changes, many also are asking, “Where, exactly, is my money being invested, and how is it affecting the world in which I live?”
Investment portfolios can be a means for social change and activism. By investing primarily in sustainable and responsible corporations, citizens can encourage irresponsible companies to change harmful business practices. Faced with losing investors, corporations such as the large energy companies, big-box retailers, major defense companies, tobacco firms and producers of genetically modified food may be forced to adopt practices that lead to a more sustainable economic environment.
There are many effective options for concerned and conscientious investors. Socially and Environmentally Responsible Investing (SRI)—also known as Green, Sustainable and Value-Based Investing—is a powerful way to make a difference in society and maintain a stable financial portfolio. There are more than 120 SRI mutual funds, including those that allocate funds for community-development initiatives. This allows investors to have a diversified, well-balanced portfolio, based on their personalized risk tolerance and investment time frame, while feeling better about where their money is going.
The reallocation of capital from less responsive and problematic corporations to more responsible companies that support their workers and the community at large means that funds will be invested and used in wiser and more effective ways. Families can save for college by investing in SRI-focused 529 college saving plans instead of traditional college funds. Individuals also can loan money to community foundations and receive yearly interest while supporting local and regional development. These nonprofit investments options offer excellent alternatives to CDs and Treasury bonds. Banking with local credit unions, supporting regional cooperative businesses and making charitable gifts through giving funds are other ways to ensure that capital is being used to encourage a healthy and sustainable economy.
Eric Packer is an investment advisor at Progressive Asset Management Group (PAM Group), the Socially Responsible Division of Financial West Group. His office is located at 177 Worcester St., in Wellesley. For more information, call 781-239-1187, email [email protected] or visit PAMGroupBoston.com.