Money Talks For Candidate Stein
Invest With Your Values So You Can Get On With Living Them
With days to go, the campaign crescendo is drowning out the minor party candidates, but their missteps can still turn heads. Last week Jill Stein took heat for investing in mutual funds that hold stock in oil companies, defense contractors and big tobacco makers. You don’t have to be a Stein voter to see a conflict between the Green candidate and her dirty portfolio.
And it’s frustrating when a leader dodges an ethical question, especially when she claims to break with business as usual. Dr. Stein says she sold her GE, Dupont, and Merck stock long ago. But, in a classic political dodge, she asks for a break on her mutual fund holdings because those pooled products are “as compromised as the American economy.”
The candidate said she looked at investing in socially responsible funds, but she lost steam and would rather spend her “time fighting for social, economic and ecological transformation, and recycling capitalist money into the fight to do so.”
This is another classic political tactic: the false choice. On the contrary, Americans have robust options to invest in line with their values — while continuing to live those values.
As an investment professional wrestling with these issues every day, I can report that the state of ethical investing is strong. Dr. Stein could easily choose funds that avoid the oil and gas, defense and tobacco sectors and instruct her advisors to exclude companies involved in fracking and biofuels, which remain big concerns for her.
Firms like mine help clients steer clear of companies that produce social ills and mistreat their workers, employees and contractors. We could even build Dr. Stein a “fossil-free” portfolio.
And if the candidate held on to some of those GE, Dupont, and Merck shares, the right investment manager could engage with the companies on her behalf, raising concerns on weapons sales, genetically modified seeds, and drug pricing. It’s called engagement — using your investor voice (a big privilege in our “compromised” system) to improve firms or, at least, call out their wrongdoing. Investors are making progress on many such issues, pushing companies to monitor social issues in their supply chains, reckon with climate change risk, and check their noxious lobbying practices.
Unlike in politics, this would all be fairly straightforward. A socially responsible investment firm could do it all for Dr. Stein: research risks, divest from the worst companies, meet with executives, and file ethical resolutions at annual stockholder meetings.
Just like in politics, Dr. Stein would never be short on advice. She would choose among more than 450 mutual funds that apply some kind of environmental, social and governance (ESG) methodology. There is a lot of variety among those firms, which now manage nearly $2 trillion in total wealth. The presidential hopeful should just make an executive decision.
Instead, Dr. Stein’s political idealism has led to investment paralysis. Her questionable portfolios show what happens when we break a cardinal rule of politics and allow the “perfect” to be the enemy of the “good”.
My advice to candidates (and all investors): meet with a socially responsible investment advisor and choose one that you trust to understand and implement your values. There will be solid returns to fund the good fight, whatever that means for you.
Jill Stein knows better than most: it’s not so easy being Green. But investing with ethics is easier than she thinks. Don’t dodge the question. Confront it, then get back to your own work with renewed purpose and peace of mind.
Disclosures:
1. Registration with the SEC should not be construed as an endorsement of Adviser’s investment skill or acumen.
2. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal.
3. Adviser’s comments should not be viewed as an endorsement of any political party or candidate.
4. Specific securities identified and described may or may not be held in portfolios managed by the Adviser and do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed were or will be profitable.
