News from: Middleton Wealth Management
It’s not uncommon – Many a well-educated, socially conscious, environmentally friendly investor winds up buying shares of companies whose beliefs and business practices are far removed from their own. Why? Often investors simply haven’t thought about merging their personal beliefs with their investment strategies. Some may not even be aware of where and how their money is invested.
Is it that big of a deal? Only you can answer that. For some it is, and for others it isn’t. What matters to you may not matter to the next guy, and vice versa. But consider this – when you invest in a company, you own part of that company. Some investors would prefer to separate themselves from their investments, but any shareholder cannot. So what you really need to consider, based on what the company does and how they conduct business, is whether you would feel comfortable being a partial owner of that company.
Voting with your wallet. How we invest or don’t invest our money can be a significant statement of our beliefs and personal principles. For example, if someone is strongly opposed to gambling or pornography, they could choose not to invest in any company that contributes to those industries. If everyone who opposed those industries sold (or didn’t purchase) shares from those companies, that could potentially send a powerful message. On the flip side, if someone firmly believes in eco-friendly alternative energy sources, they could choose to invest in wind farms rather than big oil (for example) as a way to show their support.
The tradeoff. Investing according to your beliefs and convictions can definitely affect your rate of return. Whether the effect is positive or negative depends upon the investments you choose and the performance of those investments. But it is entirely possible, and perhaps probable, that at some point you could face a situation where you feel the best return on your investment would come from a company that is absolutely contrary to what you believe. In that case, what do you do? No one but YOU can answer that question. You must decide for yourself which is more important – your convictions or your potential financial return.
Kari Middleton may be reached at 760.409.2864 or [email protected] www.karimiddleton.com
Middleton Wealth Management and LPL Financial are separate entities. Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. CA #0C98340