04.23.07, 12:32 PM ET
When it comes to socially responsible investing, it is possible to have both economic and environmental responsibility. Some folks engage in socially responsible investing from a thematic angle--getting rid of all the "bad" companies. We think there is a middle road, whereby investors can see excellent returns with investments in line with their personal values. At Kubera Portfolios, our socially screened investment porTfolio outperformed the S&P 500 Index by 17.6% over three years.
When vetting companies for our portfolios, our seven-member investment committees look closely at their eco-credentials: hunting for positives (such as recycling programs, clean energy initiatives, an earth-friendly product line) and screening for negatives (toxic emissions, hazardous waste liabilities, harmful community impact). First and foremost, however, we look closely at the balance sheet and make sure the company is fiscally sound, with a lean price-to-earnings ratio. We don't want to see investors sacrifice their own financial sustainability in their quest to be green.
As a guideline for sustainable investing, I've come up with four basic tenets I call "Green Rules of Thumb."
- Elucidate your own personal social values. Everyone has a slightly different definition of "socially responsible." Determine what yours is, and tailor your portfolio accordingly.
- Decide whether you want to be a shareholder activist or simply a socially concerned investor. Do you want to lobby for change in the boardroom or passively invest in a company you feel good about?
- Be sure to analyze the expense ratio of mutual funds. Keeping your personal costs low is a hallmark of sustainable investing.
- Invest in as many different types of sustainable companies as possible within your portfolio. Diversification is essential for positive returns. With the myriad of sustainable companies out there, don't abandon sound rules of investing. You don't have to.
Brent Kessel is CEO of Kubera Portfolios.
Interviewed by Devon Pendleton
sorry. anyway, there's another company that i'm thinking about putting at least 75% of my vestage into, called Winslow Green:
http://www.winslowgreen.com/products/index.aspi like the fact that there are at least a FEW people out there who understand that environmentally-sound people like money, too. yes, i'm a hippie in my own right. i'm my mother's daughter, and i'm a tree-hugging, animal-loving, vegetarian wackadoo, but let's be real. i like technology. i like an ipod. i love my computer almost as much as a person. i'm in love with the digital age, and i'm thankful i'm able to be a part of it's birth. i love the time i'm in, although i could have chosen to be born a little later, therefore making me a bit younger. i'd LOVE to be enrolled in school right now, preferrably college - not grade school. when my depression isn't peaking, i hunger for knowledge. it's like i can't get enough. ahhh, but i digress.
my point is, i'm glad there's finally someone out there who understands that although we want green companies, green investments, green living, we don't always want to have to sacrifice our hard-earned green for it! i mean, i'm lucky to have a job - i love working here. even if i won the lottery that i never entered, i still don't think i'd like to stop working. maybe less, but not altogether.
i've contacted several companies about green investing, but the answer is usually the same - "we don't offer our services in your backwoods, hillbilly, no-shoes wearin' area," or something to that effect. so, i'm just having to skirt around various obstacles to find something that suits me. anyway, i'm hoping this will all work out, eventually to my retired-self's benefit. sure, i'm all about instant gratification just like the next person.
and the saying is right - youth IS truly wasted on the young.