For example, the column dings a company for making "immoral see through" athletic wear. How is that socially irresponsible? Another for supporting Planned Parenthood, an organization a majority of Americans see as quite socially responsible.

On a personal level I see the stock market as intrinsically destructive to human moral values. "Good business" decisions most often make for bad news for humanity in the absence of a strong regulatory environment.

I invest in real estate and own no stocks.

Just about every corporation has dirty laundry, even companies that pledge to "do no evil."

If you are investing, especially in mutual funds, you are likely complicit.

But the way I look at it, they generally don't directly benefit when you buy their stock. The money doesn't go in their bank account (unless it is the initial offering and good luck to any normal Joe getting in on that). The only thing it does for them is support a market for their shares, i.e. liquidity.

So why not get a little something back in the form of dividends or appreciation or both (if you're lucky, because normal Joes are exposed to the whims of markets, world events, cooked books, predatory traders, and lots of other things beyond their control or possession of information.)

Yes, you might profit a little from the evil doers' evil doings. But if you don't somebody else will. I've traded Exxon Mobile, Chevron, Caterpillar, sometimes made a few bucks, and slept well at night.

We boycotted Walmart for years, and only buy anything there now out of convenience (or because it's the only store in a 50 mile radius of some rural town) and only rarely.

I hate the company, but back in the early 90s I learned some stuff from one of their vendors about what they were doing with technology that would revolutionize retailing. I thought about investing in them (back before I hated them) but didn't. If I had invested, say, $10,000 then at around $13 a share it would be worth about $55,000 today, . I think that works out to about a 450% return? (Check my math.)

And speaking of Exxon Mobile, if you had invested $10,000 in their stock around the same time at about $12 per share, it would be worth about $76,000 today. (Wish I had done that.) People are going to buy gas and will for the foreseeable future, so I don't think it's immoral to make a few bucks yourself.

The problem is that it really is a "rigged market" for small investors. It's just gambling at some level. The odds are only a little better than Vegas, but sometimes you can get lucky.

What would be great is if U.S. corporations adopted more "corporate social responsibility" like they have in Europe. I think it's even regulated to an extent there? There's no reason why profits and the planet and its people can't coexist.

Also another topic we've been meaning to ask David Moon about is, what's the deal with growth? Next quarter revenues, obsession with GDP, etc.? Ultimately it's not sustainable. (As famous economist Edward Abbey once said, "Growth for the sake of growth is the ideology of the cancer cell.")

What's wrong with zero growth except as needed for population growth (which should probably be zero growth, too), make some steady, sustainable profits, pay some dividends, everybody's happy.

Guess that should be a discussion for a different day.

And, back to the original question, most "socially responsible" investing is probably a feel good exercise.

That doesn't mean people shouldn't do it or the products shouldn't be offered. Sort of like buying "green power" on your utility bill.

Maybe it will make a small difference and promote attitudes that eventually lead to big changes. But there should be transparency so you know what you're buying or investing in.

The labels are misleading and inaccurate. You have to do extensiv research or do it yourself.

Still, some funds can avoid the obvious- tobacco, guns, etc.

As far as reviewing the column- the conclusion is "why bother trying?", which I wouldn't agree with.

With the disclaimer that I am also a "complicit" owner of a couple of those opaque mutual funds, I do agree with Reform4 that it's worth the try to scrutinize one's investments this way. One can study that annual report to catch any offensive holdings after the fact, at least.

Still, my first thought on the column mirrored WhitesCreek's, namely that this sort of scrutiny is really the province of government (via regulation, I mean), not of consumers.

From the consumer's point of view, it's both difficult and time consuming to have to monitor this aspect of one's investments or purchases, and it's also frustrating to sometimes discover one's miscalculation only "in the rear view mirror."

From the business' point of view, it's a bit of a gamble to have to adopt one's own higher code of ethics when government shies from imposing one. When government fails to level the playing field among all businesses, just some of them will choose to adopt martyrdom as their plan.

More succinctly, "social investing" isn't a very efficient approach to affecting cultural change among businesses.

It's not a very efficient way of investing either. There are certain sorts of investments that any given investor may or may not shy away from, but, on the whole, investing is an ammoral activity. It is neither good nor bad, but a necessary part of building a secure financial future. One must tread lightly on the concept of applying good and evil moral equations with money. And while investing in a company making snuff films, for instance, would be clearly wrong, the vast majority of investments are not nearly as cut and dried.

For instance, my current stock of interest is Tesla, not because I think reducing carbon output by cars is the right thing to do (though I do and it is), but because I think that our infrastructure is in such shitty shape that if one wants uninterrupted, consistent electrical service, i.e. heating and air conditioning, refrigerators, T.V.s computers etc. one will be forced to produce and store one's own electricity, if only to deal with rolling blackouts, brownouts and longterm grid interruptions. As to their operations being deeply good, I'm more interested on the return on a ten year commitment than I am whether or not Elon Musk goes to church every Sunday.

There's only twenty-four hours in a day and sometimes one must accept that we can only do the best we can do.

This just speaks to the huge market of segmenting stocks into hundreds or thousands of mutual funds where the mutual fund industry is just choosing from the same pool of companies over and over again. You're writing about the sins of financial product marketing, not corporate responsibility.

Do you even recommend conventional, highly managed mutual funds? Shouldn't the small investor be putting his/her retirement savings instead into broad market index funds with low fees? Seems like bad advice, IMHO, to recommend otherwise. I would be interested in hearing your views on this.

Then, there's corporate social responsibility, or CSR, which is a very real thing that's catching on among the largest corporations around the world and can pay sustainability and growth dividends beyond the next quarterly earnings. Companies are choosing to go this route for the best interest of the company, not just feel-good publicity.

Seriously and with all due respect, are you just trolling us?

socially responsible mutual fund investing seems to be couched here in a sort of Right or Left lens ... i wonder if one can actually equate social responsibility to investing.
it seems more a label akin to the sign in the grocery store that says "Organic" tomatoes with the quote marks as in this column's headline for "socially-responsible" -
not saying the concept is bad at all, and in fact given that corporate personhood exists then wouldn't such persons be compelled to follow socially responsible behavior?

Factchecker, I can assure you that I have no interest in trolling. My question is sincere, as some people on this site can attest. I am interested in the boundaries of thought, and the changes in those boundaries over time. This board is a place that offers a local perspective on one thought boundary on many topics, including, I suspected, "socially responsible investing."

(Satire alert.) Normally when I want to hear the local, radical left-wing communist position on a topic I privately ask Bean.

Re mutual funds, both managed and indexed... The mutual fund industry is a reverse Lahe Wobegone; most managers are below average. Index funds are the wisest choice for the largest portion of individual investors. There are, however, a small group of managers who regularly outperform the averages. (Many of these managers do not offer public, retail mutual funds.) Interesting, and not coincidentally, most of these managers "live in" a very similar intellectual neighborhood and maintain private, structured systems in which they visit, share ideas and argue about how to solve the world's problems.

Tamara, feel free to publicly discuss PBCs and thanks for the info. If I write on the topic, it won't be any time soon enough that anyone would remember if I plagiarize you. (more satire)

(link...)

Speaking of looking into a socially responsible crystal ball.