Making an Investment in Environment of Future
While many investors look for the quickest return on the hottest stock, others are adopting a no-rush, take-it-easy-on-the-environment philosophy. There are now North County brokers, brokerages and portfolios specializing in ecologically sensitive stock options.
Those investors who might be thinking that all this is a rather new and untried way to think about investing money, keep in mind that churches and colleges--scarcely a community of high-flying stockholders--have been “screening” their portfolios for socially affirmative stocks for a century. The environment is a fairly recent “screen” because it’s just become a “business.”
Aside from the eased conscience, why would anyone settle for what are often slow-growth or even no-growth stocks? Because they think these stocks will be valuable later--when they want to retire or the kids or grandkids are ready for college.
They are a match for people such as an Encinitas couple looking to invest money for their grandson’s college education, something with slow and steady growth, something in keeping with their sensitivity to environmental issues.
In their case, the level of their caring for the environment overcame their concerns about the delayed potential for returns. When weighed on the whole, stocks in environmentally screened companies looked like a prudent move. Now, after several years of experience as buyers of a type of mutual funds that have come to be known as “socially responsible investments,” they have decided to buy more, even though the fund doesn’t do as well as some others.
The trade-off is that they feel very comfortable and enthusiastic about where they’ve put their money.
Traditional considerations for successful investments aren’t thrown out the window in these ecologically screened investments.
“Clean and green investing only works if all the fundamentals are there,” said Candace Bahr, a financial planner associated with the Carlsbad office of Prudential Securities. That’s Wall Street jargon for a company that isn’t up to its eyeballs in debt, under investigation by the EPA, FDA, FBI, SEC or Greenpeace, and hasn’t recently announced its intention to begin making something anachronistic like 45 rpm record players.
“For my daughter’s portfolio for college I used several screens--financial performance and what kind of business they’re in, whether they’re polluting,” Bahr said. In other words, “I just want to be able to sleep at night.”
Bahr and a Del Mar financial planner, Ginita Wall, have organized a study group, Women’s Institute for Financial Education. While not strictly devoted to eco-investing, the 900-member group does reflect the fact that women seem to be taking a more beady-eyed look at stocks when it comes to the damage or boon a company brings to the world.
For various reasons, mostly having to do with longevity, women control most of the stock in the nation. That fact has probably helped Wall Street firms quicken their response to requests for socially responsible investing.
“As recently as 1987, only 6% of our clients expressed any concern about the environment. Today, 90% of the people in the (brokerage’s) Socially Responsible Investment Program have directed us not to invest in companies that are considered polluters,” said Doug Salvati, Shearson Lehman Brothers’ New York manager in this category of stocks.
Another Wall Streeter, Suzanne Harvey, who is Salvati’s counterpart at Prudential Securities, says the increased attention “puts pressure on the skills of a broker.”
North County writers have been a source of expertise in this field.
Del Mar was where Consumer’s Union went to ask Ginita Wall to write up her views on women’s investing in a book called “Our Money Ourselves.” And Olivenhain was where Alan Reder lived when he and San Diego financial planner Jack Brill wrote “Investing From the Heart” for Crown Books. Reder has moved to Oregon, but Brill and his associate, financial planner Tami Norton, still operate in Carlsbad. The subtitle of the Brill-Reder book and specialty of the office is “Socially Responsible Money Management.”
The book’s observations on environmental considerations and its glossary of terms are useful resources for those who want to educate themselves before eco-investing.
One investor who’s been at it for a while is Kim MacConnel of Encinitas, who’s been putting his chips on environmentally thoughtful companies for 15 years.
“Most environmentalists are extremely conservative with money, and most conservatives are fiscal liberals,” he said. “No high flyers for me. I want mainstream and realistic. Social investment is no-nonsense because these companies are in for the long term.”
More on “clean” investing
* Women’s Institute for Financial Education, 792-0524.
* “Our Money Ourselves” by Ginita Wall, “Investing From the Heart” by Jack Brill and Alan Reder and “The Green Entrepreneur--Business Opportunities That Can Save the Earth and Make You Money” by Gustav Berle are among related books available at North County bookstores.
* Environmentally oriented mutual funds and money management funds include Parnassus, Working Assets, Calvert, Domini, New Alternative, Kepper and Oppenheimer. Others are being brought to the market this year.
