Poll: The Market Has No Conscience 😈

Table of Contents

Poll: The Market Has No Conscience!

“Are you investing to make the world a better place?”

  • 57%:   Yes
  • 43% No 

From Black Lives Matter to climate change, everyone’s got something to fight for at the moment. The advent of socially responsible investing (SRI) means our community is prepared to make money talk… just. The Invstr community is largely split in one of our most contentious polls to-date! 

The dilemma is whether to restrict the investment universe and give up gains to do something that we’re not sure will have a tangible impact. It’s a reasonable concern, so let’s clear up how ethical investing works, once and for all.

If you invest in a company on the stock market, it doesn’t get your money. You’re trading with another investor, like in a giant flea market. The only way to invest unethically is to buy shares in a company you don’t like that either plans to raise funds soon, or whose management gets paid in stock options.

There are Socially Responsible Investing (SRI) indexes that suggest to you a corporate blacklist, but Environmental, Social, and Governance (ESG) scores have less to do with ethical investing. These are scores for how well companies are protected from these types of issues around the world, not at risk either through luck or skill.

When it comes to ethical decision-making as an investor, let’s say there’s a tobacco business that looks like an excellent investment from almost all angles. It’s heading into a new market. You don’t feel good about entrusting your cash with its managers, though, who’ve expressed some views you disagree with – that tobacco isn’t bad for society.

Those higher-level employees might have some insider ownership and get paid in shares of the company, but they’ll only qualify for those ‘stock options’ if the stock price reaches a certain level. If you don’t want to help managers along with their stock options, divest!

In another example, let’s say you find a coal firm that screams “buy, buy, buy!” but you quickly realize it needs to fund a new mine. It plans to issue a boatload of new stock to the market, the owners needing a high stock price to raise the most cash. Knowing this is a harmful mine, you decide not to help it along, and you decide not to invest in the stock.

You can achieve ethical investing on a huge scale in one swoop. Just go for an ‘ethical index.’ We host the ‘SPDR S&P 500 Fossil Fuel Free’ on Invstr, which keeps you out of dirty energy. Its performance is almost identical to the standard S&P 500 index.

We also have the ‘SPDR SSGA Gender Diversity’ index, which only includes companies with a high percentage of women in positions as executives and directors. 

In sum, 42% of the Invstr community might not have as much to lose from going sustainable as it thinks it does. We can all make a difference, and thousands of stocks mean thousands of ways to make a statement, not just a fortune!

Share:
More Posts
Higher Rate Households 📈

The recent Fed decision to pause rates has left the federal funds rate at its highest level since 2000.

Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.