Socially Responsible Investing For Dummies (For Dummies (Business & Personal Finance))

362 Pages·2008·3.19 MB·English

by  Ann C. Logue

Spine: .72”
Business/Personal Finance/Investing
Generate a good return as well
as goodwill with this guide to
ethical investments Open the book and find:
Want to make money while you make a difference in • A clear introduction to social
the world? This practical, hands-on guide to smart social investing
investing shows you how to maximize your profits while
• I ssues to invest in, from
remaining true to your values. You get expert advice in environmental to international
targeting an issue you’re passionate about, researching
• T he different types of investments
potential investments, and putting your socially responsible
choices into action. • How to buy and sell
• G et started with social investing basics — understand what it is, • F iduciary responsibilities for the
why it works, and how investors define social responsibility social investor
• N avigate the socially responsible enterprise — discover the • H ow to use your investment
business principles that help ethical organizations thrive clout to influence a company’s
performance
• C onduct your research — determine whether an investment has
financial potential and also serves your personal needs • T en social investing traps you
must avoid
• E valuate your investment choices — from stocks and bonds to
mutual funds and ETFs to real estate and high finance, select the • A ctivist investing success stories
best investments and adjust your portfolio over time
• G et help from the pros — find brokers, financial planners, and
mutual fund companies that can help you with your decisions
• E nsure your success — see how to diversify, monitor your Learn to:
investments, join forces with others, vote your proxies, keep your
Go to dummies.com® • C onduct effective research on potential
perspective, and more
for more! investments
• K eep up with investment trends — discover how to take
advantage of new investment products and stay on top of • Locate ethical companies and causes
industry changes
• R ecognize truly socially responsible investments — understand • A lign your current investments with
how to tell socially responsible investment opportunities from your morals
“feel good” opportunities
• A ppease both your conscience and
your wallet
$24.99 US / $26.99 CN / £15.99 UK
Ann C. Logue, MBA, has twelve years of working experience in financial
ISBN 978-0-470-39471-7
services and has taught business administration at the University of Illinois.
She is a finance writer who has written numerous articles on investment
and has edited publications on equity trading and risk management. Ann C. Logue, MBA
Author, Hedge Funds For Dummies and
Logue Day Trading For Dummies
Socially Responsible Investing
™
Making Everything Easier!
Socially Responsible
Investing
Socially Responsible
Investing
FOR
‰
DUMmIES
By Ann C. Logue
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®
Socially Responsible Investing For Dummies
Published by
Wiley Publishing, Inc.
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Copyright © 2009 by Wiley Publishing, Inc., Indianapolis, Indiana
Published by Wiley Publishing, Inc., Indianapolis, Indiana
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ISBN: 978-0-470-39471-7
Manufactured in the United States of America
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About the Author
Ann C. Logue is the author of Hedge Funds For Dummies (Wiley, 2006) and
Day Trading For Dummies (Wiley, 2007). She has written for Alpha, Barron’s,
MSN Money, Newsweek Japan, and Wealth Manager. She is a lecturer at the
Liautaud Graduate School of Business at the University of Illinois at Chicago.
Her current career follows 12 years of experience as an investment analyst.
She has a BA from Northwestern University and an MBA from the University
of Chicago, and she holds the Chartered Financial Analyst designation.
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Dedication
Once again, to Rik and Andrew, for their love and support.
Acknowledgments
So many friends and strangers alike helped me with this book. Among them
were Nazim Ali of the Islamic Finance Project at Harvard University, Snehal
Bhagat, Cody Craynor at the Church of Jesus Christ of Latter-day Saints,
Jeffrey Dekro of Jewish Funds for Justice, Peyton Fleming at Ceres, Michael
Saleh Gassner, Nitesh Gor of Dharma Investments, Robert Gough of the
National Association of Socially Responsible Organizations, Aviya Kushner,
Rik Lantz, Eric Lee, David Loundy at Devon Bank, Bruce MacDonald of
Accion International, Ann McKenzie, Nell Minow of The Corporate Library,
Mark Orloswki at Sustainable Endowments, Brad Pokorny of the Baha’i
International Community, Nicole Rea, Lynne Meredith Schreiber, and Morgan
Simon of the Responsible Endowments Coalition. Their insights and ideas
made it much better.
As for the mechanics of putting together the book, Natalie Harris, Alissa
Schwipps, Vicki Adang, Patricia Hathaway, and Stacy Kennedy of Wiley were
great to work with. Finally, my agent, Marilyn Allen, made it all happen again.
Thanks, everyone!
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Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our Dummies online registration
form located at www.dummies.com/register/.
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Cover Photos: © lmasses.com/corbis
Cartoons: Rich Tennant (www.the5thwave.com)
Publishing and Editorial for Consumer Dummies
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Contents at a Glance
Introduction ................................................................ 1
Part I: Getting Started in Social Investing ..................... 7
Chapter 1: Investing the Socially Responsible Way ...................................................... 9
Chapter 2: The Socially Responsible Enterprise: Understanding and Monitoring
Performance ................................................................................................................... 23
Chapter 3: Understanding Why Institutions Invest the Way They Do ...................... 41
Chapter 4: How to Research Responsible Investments .............................................. 53
Chapter 5: Lights, Research, Action! Using Your Research to Inf uence Your
Investments .................................................................................................................... 79
Part II: Issues to Invest In .......................................... 95
Chapter 6: Close to Home: Supporting Community Development ............................ 97
Chapter 7: Scrutinizing Governance: How Is the Company Run? ............................ 113
Chapter 8: Evaluating Environmental Investing ......................................................... 129
Chapter 9: The World around Us: Following International Affairs .......................... 151
Chapter 10: Keeping Your Faith: Investing with Religious Beliefs ........................... 167
Chapter 11: Social Change and the Responsible Corporation ................................. 179
Part III: Putting Your Socially Responsible
Choices into Action .................................................. 191
Chapter 12: Buying and Selling Responsible Stocks and Bonds .............................. 193
Chapter 13: Mutual Funds and Exchange-Traded Funds (ETFs) ............................. 215
Chapter 14: Banking on Social Responsibility (and Insuring It, Too) ..................... 237
Chapter 15: The Responsible Side of Real Estate ...................................................... 253
Chapter 16: Getting into High Finance: Private Partnerships .................................. 267
Chapter 17: Making a Difference with Microf nance.................................................. 283
Part IV: The Part of Tens .......................................... 297
Chapter 18: Ten Tips for Social and Activist Investors............................................. 299
Chapter 19: Ten Investment Traps and How to Avoid Them ................................... 303
Chapter 20: Ten Socially Responsible Investing Success Stories ............................ 309
Appendix ................................................................. 315
Index ...................................................................... 321
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Table of Contents
Introduction ................................................................. 1
About This Book .............................................................................................. 2
Conventions Used in This Book ..................................................................... 2
What You’re Not to Read ................................................................................ 3
Foolish Assumptions ....................................................................................... 3
How This Book Is Organized .......................................................................... 4
Part I: Getting Started in Social Investing ........................................... 4
Part II: Issues to Invest In ...................................................................... 4
Part III: Putting Your Socially Responsible Choices into Action ...... 4
Part IV: The Part of Tens ....................................................................... 5
Icons Used in This Book ................................................................................. 5
Where to Go from Here ................................................................................... 6
Part I: Getting Started in Social Investing ...................... 7
Chapter 1: Investing the Socially Responsible Way . . . . . . . . . . . . . . . .9
Social Investing DOES Give a Good Return ................................................ 10
Yes, Responsible Behavior Does Help Businesses .................................... 11
Effects of charitable contributions .................................................... 11
Identifying the 100 most sustainable companies ............................. 12
Weighing social performance against f nancial performance ........ 12
The Moskowitz Prize for social investing research ......................... 13
Let’s Make a Deal: Exchanging Money for Everyone’s Benef t ................. 14
Companies and governments need f nancing .................................. 14
Individuals and institutions need investments ................................ 15
Who Invests Responsibly, and Why? .......................................................... 15
Contributing to the community ......................................................... 17
Monitoring a company’s managers ................................................... 17
Hugging those trees ............................................................................. 18
Investing internationally and socially ............................................... 19
Reminders from religion ..................................................................... 19
Choosing, Monitoring, and Inf uencing Your Investments ....................... 20
Ensuring socially responsible choices .............................................. 20
Keeping abreast of changes ................................................................ 20
Making a careful selection of assets .................................................. 21
Using shareholder activism ................................................................ 21
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