By Joseph J. Palumbo III
But we all know too well that with investing, there is always a level of risk involved. How about portfolios that seek to combine moral values with stock values? Does that even sound realistic?This week I am going to speak on socially responsible investing. In 1971, two ministers founded the Pax World fund. The goal was to avoid companies that made products socially harmful or objectionable in some way, such as tobacco, alcohol, gambling or military stocks. Starbucks had to be removed from the portfolio after Starbucks was licensed under Jim Beam liquor. Shareholders have since voted to drop those prohibitions, putting a new emphasis on product integrity, climate change and human rights. For example, nuclear power companies are a consideration for investing, since their technology could help slow down the effects of global warming. For investors who want to focus on the environment, six new green funds have opened. So How's Business in regards to socially responsible investing? These funds have somewhat lagged the broad market for the past three years, only showing a modest 8.5 percent return from 2004 through the end of 2006, probably because the focus was based too much on what a company was doing wrong, rather than what it does right. The modern-day fund has taken a simplistic approach to investing and for the most part is showing overall better returns for their clientele; while still allowing the investor to feel good about the vested monies he or she has working for them.Call Joseph J. Palumbo III at 516-248-0256 or visit www.palcogroup.com.
