The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Socially Responsible Investing

URL:  http://boards.fool.com/your-points-are-interesting-about-individual-26086022.aspx

Subject:  Re: Why SRI? Date:  11/10/2007  9:07 AM
Author:  SunnyJames Number:  2214 of 2249

Your points are interesting about individual investors avoiding companies whose actions clash with that person's values. But even if I kept ironclad rules about avoiding stock purchases of, say, tobacco companies, chemical companies, or any company I feel is damaging the environment or hogging resources, I most likely STILL would not be able to avoid them if I am in any way connected with large mutual funds.

If I am indexed in a mutual fund, or if I participate in any type of retirement plan, I am most likely holding those types of companies, like it or not. If you check the top holdings of any of the biggest equity funds, you'll find many of the same companies represented; Exxon-Mobil and Altria (formerly Phillip Morris) are on countless Top 10 Holdings lists.

If institutional investors like state pension funds or huge mutual funds like American Funds have holdings that approximate the Gross National Products of small nations, what can you or I expect to accomplish with our few dozen or few hundred shares? Not much. In fact, we are more than likely even benefitting from the actions of these companies - enjoying the fruits of capitalism if you will - if our IRA's are growing as time goes by.

I think if you disapprove of what any company is doing you are better off participating in media campaigns or with a group of people t