Though I'm sure the math teacher introduced the stock market
in sober and responsible terms, this is what my 10-year-old son
heard: "You can be rich, rich, RICH!" As part of an online stock
game, each student was given a hypothetical $100,000 to invest
in a real-time portfolio. And my little Richie Rich was off and
I gave him some advice: Be realistic. True, the market climbs
in value eventually, but you can lose big on bad investments.
Fixated on the computer, my son nodded absently, as he "purchased" boatloads
of sexy stocks like Apple and Google.
Might as well let him learn on his own. My job is to guide
him in making socially responsible decisions - both in life and
in investing. I know he's got it in him. Recently at Hurd
Orchards, impressed by all the labor that went into harvesting
the fruit and making the jams on the family-owned farm, my son
generously suggested I pay more for the preserves I was buying.
"I do pay more," I whispered.
"You give them extra money? Good!"
"No," I explained, "the prices here are higher than in the
supermarket, but I don't mind paying because I support the farm,
It was lovely that my son was so generous with my money, but
I hoped he'd continue to be socially aware when it affected his
wallet. Come to think of it, outside of buying locally and supporting
good causes, I wasn't setting much of an example. I didn't really
know about socially responsible investing. Last I had heard,
the good intentions were there, but sometimes the profit wasn't.
I've since learned that that is no longer the
case. Last year, for example, several funds that take into account
the impact of their investments on the environment and social
welfare performed in the top ranks of standard mutual funds in
the same categories, according to the Los
Angeles Times. These include New Alternatives Fund, Parnassus
Fixed-Income Fund, and Catholic Equity Fund I. The article also
mentions the Domini 400 Social Index - a broad index of socially
responsible stocks modeled on Standard & Poor's 500 Index
- which, in the past 16 years, has outperformed the S&P 500's
Index by almost 6 percent.
I also learned that even the simple act of saving is socially
responsible. After nearly two years of negative personal savings
and four years of war (and tax breaks for the rich), America
is borrowing way more money than it should from the EU, China,
Japan, and others. When a nation doesn't save - at either the
government level or at the private-citizen level - it isn't investing
in our country. Every dollar we tuck away (in savings, IRAs,
mutual funds, or mattresses) gets invested in local and national
business as well as in public infrastructure. (Oh, the money
in the mattresses? Not so much.) When we don't save, however,
that investment money has to come from somewhere.
Enter The Blob that we call our national debt. Oozing under
doors and consuming everything in its path, the growing debt
could possibly cause <cue scary music> economic collapse.
But even before that happens, America loses in small ways. Lending
countries could raise interest rates to hedge against their investment
in us. And others could drop their peg to US currency - a vote
of no confidence in the sliding dollar - as Kuwait just did.
My family will start saving one of these days.
When we pay off our education loans. And then pay for the kids'
college. And then buy that little cottage we've always wanted.
That's when I'll look into the new "fourth sector" or "for-benefit" investments.
The nascent movement involves businesses "driven by both social
purposes and financial promise that fall somewhere between traditional
companies and charities," a recent New
York Times article explained. GE's $12 billion Ecoimagination
business, for example, set out to produce a cleaner, quieter
airplane that would presumably save money and the planet. Also,
a teacher's pension fund cited in the article invests in wind
farms and developers of low-income housing.
To me, the idea of a green GE seems counterintuitive, but maybe
I need to give it another look. And take Wal-Mart. We never go
there, but I've just learned that it's "one of the most aggressive
environmental companies," according to a Christian
Science Monitor interview with Andrew Shalit, of the environmentally
sensitive Green Century Capital Management. His claim checks
out. Wal-Mart plans to double its fleet's fuel economy by 2015
and hopes to eliminate its manufacturing waste by recycling and
eliminating non-recyclable materials. Now I wonder: does that
make it okay to shop there?
I'll advise our kids to be socially responsible investors when
they're older. For my husband and me, however, I've cooked up
a get-rich-quick scheme: vice funds. These recession-proof industries
- alcohol, tobacco, gaming, and weapons - are pretty much everything
we gave up when we got pregnant. All we've got left are our memories.
Can you blame us for living vicariously through our portfolio?