One of the things my late father taught me from an early age (starting with my monthly $4 allowance) was to try to invest a portion of everything I earn and, if possible, to have a diverse portfolio of investments.
Lately I’ve been thinking a lot about those investments, particularly funds invested in the specific publicly traded companies. I learned long ago that this isn’t an area of expertise or discipline for me, so I have a financial advisor who handles the investment process. Their job is to maximize the investments, and while I’ve brought up ethical investing in the past, I’ve struggled to define that in a way that has practical applications.
However, I now have some specific terms I’m using to reshape how I invest. I thought I’d share them in case you have any additions, suggestions, or strategies of your own. There are three types of companies in which I’m looking to divest (pull money out of and not invest further in):
- fossil fuel companies
- AI-enabling companies (e.g., Nvidia)
- military industrial complex
AI is the most difficult area to divest from, as so many major companies are using it. But I think there’s a difference between a company that uses AI and a company that creates the building blocks of AI (e.g., the microchips). At least, that’s where I’m currently drawing the line.
What do you think? What’s your perspective and methodology for ethical investing?
Have you ever looked into blue-chip art as an option? It’s outside the sectors you’re trying to avoid and can add some nice diversification. Platforms like Masterworks let you buy small shares in art pieces by major artists. I put small amounts into three different pieces (Soulages, Rothko & Kusama) and I’m waiting to see how they do when they eventually sell.
That’s really interesting! Art speculation isn’t something I’ve considered, but I’ll look into it. 🙂
My personal investment guidelines are the same as for how I would choose where to work (as a tech person): No guns, no ads and no “evil” companies. Evil is subjective but to me they include companies like Meta and Tesla. Although i have to say since 99.9% of companies are driven by greed and not human advancement, that distinction fades very quickly.
Do you have a few favorite publicly tradeable companies that you invest in and root for?
So about two years ago I got out of investing in individual companies completely, I only do index funds now and I did some research back then on the ones that are somewhat more ethical and exclude guns, alcohol, tobacco, fossil fuels. Some examples are ESG funds (Environment, Social, Governance) like ESGV, SUSA, EFIV and some that exclude even more categories (nuclear, adult entertainment) like VFTACX, TICRX, PRBLX.
Not all of them exclude everything so you have to check one by one. Realistically if you invest in ETFs it’s very hard if not impossible to avoid the evils but at least there’s a balance since many of these are building their portfolios with awareness.
That’s brilliant! Thank you for sharing.