Author Topic: What is the best alternative if I want to divest from stock market?  (Read 1606 times)

calamityb

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Hi,

I have a number of questions about my investment stocks and hoping that smart folks here can help me find resources and share ideas! 

First, in general, is there any easy way to find out how the money I have invested in the stock market is being used in the world?

Second, if I were to divest from the stock market, what's the next best option in terms of social responsibility and financial security? I have 403b and Roth IRA, so I know I would be getting a penalty for taking funds out suddenly.

Thanks!

threefive

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Re: What is the best alternative if I want to divest from stock market?
« Reply #1 on: December 04, 2017, 09:36:07 AM »
The money you have invested in the stock market is used to employ millions of people, produce products, and provide services that have/are dramatically improving the quality of life for nearly everyone on the planet.

That said, there are what are called "Socially Responsible Investing" portfolios and mutual funds that you can move your money into, if they are offered by your 403(b) plan. For example, Betterment will set-up such a portfolio and manage it for you (say, for your IRA). Vanguard also has similar funds, such as VFTSX, which you may be able to find in your 403b plan. Finally, you can just move your funds into the money market option in your 403(b) without penalty, but you'll get close to zero return and that will only be to the benefit of whatever rich financial company runs your plan.

stashing_it

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Re: What is the best alternative if I want to divest from stock market?
« Reply #2 on: December 04, 2017, 09:51:57 AM »
Besides the stock market, other common ways that people are using their assets to create more wealth are

-  Owning real estate, typically rental houses
-   owning businesses  (much higher variance in results)

both of those take more work, but can have higher (or lower) returns than the market
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alexpkeaton

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Re: What is the best alternative if I want to divest from stock market?
« Reply #3 on: December 04, 2017, 02:01:24 PM »
Why would you want to divest from stocks for social responsibility? Are stocks somehow evil?

You could try and divest from specific companies, but I'd argue there's no reason to consider that being socially responsible. If anything, divesting just makes the risk premium higher for those that don't divest. In other words you'd just making other people more money.

2Cent

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Re: What is the best alternative if I want to divest from stock market?
« Reply #4 on: December 05, 2017, 07:54:50 AM »
It kind of depends on what you feel is bad about your stocks. If it is environmental impact of increased production you could invest in businesses that are working on products that reduce this. If you really want out of stocks you could go for investing in things that will save you money like insulation, solar panels, growing your own food, etc.

stimepy

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Re: What is the best alternative if I want to divest from stock market?
« Reply #5 on: December 05, 2017, 09:06:40 AM »
The best alternative is honestly equal to the amount of risk your willing to take.

As others have said Real estate is a huge option, there are many varied paths you can take here. (Biggerpockets.com is the best place to see them all.)  The returns, are varied, but if you take the time to understand what your doing you can do very well with these types of investments.  (I think this is probably the best place for most people whom choose to go away from the stock investment path.)

Investing in your own (or someone esle's) business venture can be profitable.  Results may vary.

Commodities seem to be ok, have never played with this one, but I am aware of people doing well taking this path.

Forex and the like, (ie gold, silver, currency trading, cryto currencies, etc)  can also be... interesting.  Results may vary.

I know there are other ones out there, but these are the ones I have played with or looked into playing with.  You best bet is to do research on each one of the options you have and decide what risks you can tolerate and the amount of work you want to do for your investment.
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Yankuba

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Re: What is the best alternative if I want to divest from stock market?
« Reply #6 on: December 05, 2017, 09:19:07 AM »
Hi,

I have a number of questions about my investment stocks and hoping that smart folks here can help me find resources and share ideas! 

First, in general, is there any easy way to find out how the money I have invested in the stock market is being used in the world?

Second, if I were to divest from the stock market, what's the next best option in terms of social responsibility and financial security? I have 403b and Roth IRA, so I know I would be getting a penalty for taking funds out suddenly.

Thanks!

When you buy shares of stock your money does not go to the company that issued the stock unless you are participating in an initial public offering or secondary offering. When you buy shares of stock individually or via a mutual fund your money goes to the person or institution that owns the shares and wants to sell you the shares in exchange for your money.

So even though you may own shares in some disreputable company, your money did not go to that company. However, you will benefit when that company makes profits.

Socially responsible funds only buy stock in companies that are supposed to have good reputations but again, when that fund buys the shares of stock in company XYZ, the shares come from someone or an institution that already owns the shares. The money does not go to company XYZ.

Virtually every share of stock traded each day is in the secondary market - i.e. the shares are traded between people and institutions. The actual companies only get money via IPOs and secondary offerings.

I'm a tree hugging pro worker Bernie Sanders supporter and I have zero ethical qualms about investing in index funds.

Apple_Tango

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Re: What is the best alternative if I want to divest from stock market?
« Reply #7 on: December 05, 2017, 02:49:23 PM »
I have a family member who is a millionaire several times over and is completely out of the stock market. He owns at least 3 businesses that I know of (a paper company, a car detail place, a subway franchise). He also owns a vacation rental property that rents for $5000 per week in the summer that was bought for almost nothing back in 2010, and a parking lot next to one of his businesses that he rents out to a car dealership. Also he invested in a property development in Central America which I think is doing well. Investing in other's real estate ventures and charging a hefty interest rate seems profitable.

I think the best deal is probably the parking lot. It's literally a gravel lot but he makes BANK on it. Storage and parking lots....I'm pretty sure they're  the best kept secrets
« Last Edit: December 05, 2017, 02:57:32 PM by Apple_Tango »

alexpkeaton

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Re: What is the best alternative if I want to divest from stock market?
« Reply #8 on: December 05, 2017, 08:15:46 PM »
I think the best deal is probably the parking lot. It's literally a gravel lot but he makes BANK on it. Storage and parking lots....I'm pretty sure they're  the best kept secrets

My dad leases a portion of his land to a cell phone carrier. They pay some base rate plus additional for each competing cell company that co-locates on the tower. Turns out there are companies looking to buy these leases from him, but he's not selling. It's a good return for zero effort.

chasesfish

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Re: What is the best alternative if I want to divest from stock market?
« Reply #9 on: December 06, 2017, 05:26:38 AM »
Hi,

I have a number of questions about my investment stocks and hoping that smart folks here can help me find resources and share ideas! 

First, in general, is there any easy way to find out how the money I have invested in the stock market is being used in the world?

Second, if I were to divest from the stock market, what's the next best option in terms of social responsibility and financial security? I have 403b and Roth IRA, so I know I would be getting a penalty for taking funds out suddenly.

Thanks!


What are your goals? 
Counting down the days until I Stop Ironing Shirts

I occasionally Blog

Dances With Fire

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Re: What is the best alternative if I want to divest from stock market?
« Reply #10 on: December 06, 2017, 06:25:14 AM »
Hi,

I have a number of questions about my investment stocks and hoping that smart folks here can help me find resources and share ideas! 

First, in general, is there any easy way to find out how the money I have invested in the stock market is being used in the world?

Second, if I were to divest from the stock market, what's the next best option in terms of social responsibility and financial security? I have 403b and Roth IRA, so I know I would be getting a penalty for taking funds out suddenly.

Thanks!

When you buy shares of stock your money does not go to the company that issued the stock unless you are participating in an initial public offering or secondary offering. When you buy shares of stock individually or via a mutual fund your money goes to the person or institution that owns the shares and wants to sell you the shares in exchange for your money.

So even though you may own shares in some disreputable company, your money did not go to that company. However, you will benefit when that company makes profits.

Socially responsible funds only buy stock in companies that are supposed to have good reputations but again, when that fund buys the shares of stock in company XYZ, the shares come from someone or an institution that already owns the shares. The money does not go to company XYZ.

Virtually every share of stock traded each day is in the secondary market - i.e. the shares are traded between people and institutions. The actual companies only get money via IPOs and secondary offerings.

I'm a tree hugging pro worker Bernie Sanders supporter and I have zero ethical qualms about investing in index funds.

^^^This! That said, your other alternative is s Socially responsible fund and/or Real estate. You may want to change your paradigm towards large companies. For example, think Healthcare, medical device companies, computer and tech companies that have improved the lives of millions of people worldwide. So called "Evil" Banks that loan money for homes for families to live in and cars to drive. Food companies that allow you and others to put food on the table everyday as well as help distribute food to countries less fortunate. Just a couple of things to consider...

Dances With Fire

talltexan

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Re: What is the best alternative if I want to divest from stock market?
« Reply #11 on: December 06, 2017, 07:25:29 AM »
They ought to make a Sanders etf in which you can literally duplicate the Bernie Sanders portfolio. It could charge amazing fees!

boarder42

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Re: What is the best alternative if I want to divest from stock market?
« Reply #12 on: December 06, 2017, 07:45:21 AM »
I think the best deal is probably the parking lot. It's literally a gravel lot but he makes BANK on it. Storage and parking lots....I'm pretty sure they're  the best kept secrets

My dad leases a portion of his land to a cell phone carrier. They pay some base rate plus additional for each competing cell company that co-locates on the tower. Turns out there are companies looking to buy these leases from him, but he's not selling. It's a good return for zero effort.

parking lots will become a thing of the past as soon as 7 years from now.  We will have massive land open up all over the country due to the automation of the automobile.  People will cease to own cars companies will operate cars on an uber like application with no drivers for a lower price than the cost of ownership of a vehicle.  Currently cars spend 4% of their time being used -
 this will increase to 50% or more and Auto manufactures will own their own cars and car service companies.  Garages will be converted into ultimate man caves and work shops and extra living quarters.  investing in parking lots is a poor mans game at this point. 

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farmecologist

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Re: What is the best alternative if I want to divest from stock market?
« Reply #13 on: December 06, 2017, 07:52:06 AM »
I think the best deal is probably the parking lot. It's literally a gravel lot but he makes BANK on it. Storage and parking lots....I'm pretty sure they're  the best kept secrets

My dad leases a portion of his land to a cell phone carrier. They pay some base rate plus additional for each competing cell company that co-locates on the tower. Turns out there are companies looking to buy these leases from him, but he's not selling. It's a good return for zero effort.

parking lots will become a thing of the past as soon as 7 years from now.  We will have massive land open up all over the country due to the automation of the automobile.  People will cease to own cars companies will operate cars on an uber like application with no drivers for a lower price than the cost of ownership of a vehicle.  Currently cars spend 4% of their time being used -
 this will increase to 50% or more and Auto manufactures will own their own cars and car service companies.  Garages will be converted into ultimate man caves and work shops and extra living quarters.  investing in parking lots is a poor mans game at this point.


I think Boarder has turned into a semi-futurist now.   :-)   I agree with all of your points that a driverless 'uber-like' infrastructure is the future.  However, I think it will take far longer than 7 years to get to the point where parking lot owners will have to worry!  i guess we cal talk again in 7 years.



boarder42

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Re: What is the best alternative if I want to divest from stock market?
« Reply #14 on: December 06, 2017, 07:54:59 AM »
I think the best deal is probably the parking lot. It's literally a gravel lot but he makes BANK on it. Storage and parking lots....I'm pretty sure they're  the best kept secrets

My dad leases a portion of his land to a cell phone carrier. They pay some base rate plus additional for each competing cell company that co-locates on the tower. Turns out there are companies looking to buy these leases from him, but he's not selling. It's a good return for zero effort.

parking lots will become a thing of the past as soon as 7 years from now.  We will have massive land open up all over the country due to the automation of the automobile.  People will cease to own cars companies will operate cars on an uber like application with no drivers for a lower price than the cost of ownership of a vehicle.  Currently cars spend 4% of their time being used -
 this will increase to 50% or more and Auto manufactures will own their own cars and car service companies.  Garages will be converted into ultimate man caves and work shops and extra living quarters.  investing in parking lots is a poor mans game at this point.


I think Boarder has turned into a semi-futurist now.   :-)   I agree with all of your points that a driverless 'uber-like' infrastructure is the future.  However, I think it will take far longer than 7 years to get to the point where parking lot owners will have to worry!  i guess we cal talk again in 7 years.



https://www.youtube.com/watch?v=2b3ttqYDwF0

This guy is pretty convincing.  but i thought this all before he talked.

Also GM plans to have cars without drivers in them in major cities by 2019. its coming and its going to come fast.  it will switch like a light switch.

even if its not 7 years this would be like starting a horse selling/breeding business 10-15 years before the invention of the automobile.
« Last Edit: December 06, 2017, 08:02:58 AM by boarder42 »
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Apple_Tango

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Re: What is the best alternative if I want to divest from stock market?
« Reply #15 on: December 06, 2017, 08:18:47 AM »
Well how about storage facilities for people's extra crap? I can't see that industry going away. And probably boat storage lots will still need to exist. Gosh this one lot I pass sometimes near the Potomac is full of crazy boats and RVs. $69 per month is the lowest price I've seen on those, but I've also seen something around $150-200 per month and up depending on the type and size of spot. I'd bet there are about 200 boats in the lot that i'm near, plus there's a few closed storage units there. So that's about $15,000-20,000 per month on the low end...probably they pull in more like $30,000 per month? Maybe $40,000? Just a guess. Of course there's the cost of staff, insurance, etc. And of course now the land itself would be way too expensive to buy...at least a few million. I personally wouldn't do it. But it probably beats the return on a house! and you don't have to deal with renters.

Boarder, I'm in the stock market lol...don't worry I'm not cashing in to buy a parking lot.
« Last Edit: December 06, 2017, 08:51:29 AM by Apple_Tango »

boarder42

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Re: What is the best alternative if I want to divest from stock market?
« Reply #16 on: December 06, 2017, 10:50:09 AM »
Well how about storage facilities for people's extra crap? I can't see that industry going away. And probably boat storage lots will still need to exist. Gosh this one lot I pass sometimes near the Potomac is full of crazy boats and RVs. $69 per month is the lowest price I've seen on those, but I've also seen something around $150-200 per month and up depending on the type and size of spot. I'd bet there are about 200 boats in the lot that i'm near, plus there's a few closed storage units there. So that's about $15,000-20,000 per month on the low end...probably they pull in more like $30,000 per month? Maybe $40,000? Just a guess. Of course there's the cost of staff, insurance, etc. And of course now the land itself would be way too expensive to buy...at least a few million. I personally wouldn't do it. But it probably beats the return on a house! and you don't have to deal with renters.

Boarder, I'm in the stock market lol...don't worry I'm not cashing in to buy a parking lot.

I'm not stating all of this to attack storage and parking but more to point out that the world is changing rapidly and some things like car automation are quite easily predictable. but it impacts stretch far and wide.

to some extent yes storage will need to exist but we have giant places to store our vehicles now that will become vacant when we dont have cars.  so smaller boats will fit in the garage now. and your storage locker will be your garage (many people do this now anyways b/c they have so much crap and still have storage) but the point is i think it will effect both of these industries heavily.
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Maenad

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Re: What is the best alternative if I want to divest from stock market?
« Reply #17 on: December 06, 2017, 11:06:24 AM »
OP, I recommend you read up on the difficulties of Socially Responsible Funds. They sound like a good idea, but it's a lot harder to be idealistic in your investing than you'd think, given the mix of "good" and "bad" in various companies and sectors.

You could start with https://livingafi.com/2016/06/17/unloading-guns-from-a-portfolio/ for an example of the challenges. He has links to other similar posts on other sites as well. (Please note that I'm not starting up a debate on owning stocks of gun manufacturers, this was just an example I could remember of someone who wanted to alter their investment strategy based on their values.)

dougules

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Re: What is the best alternative if I want to divest from stock market?
« Reply #18 on: December 06, 2017, 11:25:36 AM »
Remember that owning stock means you can vote in how to company is run.  The right mutual fund can actually use their vote to influence how the companies of the world are run.  As a matter of fact the power given to mutual fund managers through their ownership in companies is becoming a major issue. 

Dee18

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Re: What is the best alternative if I want to divest from stock market?
« Reply #19 on: December 06, 2017, 04:43:35 PM »
If you want to get out of the stock market you can do so without penalty as long as you leave the money inside the 403 or IRA.  They probably have bond funds or a money market. 

Eucalyptus

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Re: What is the best alternative if I want to divest from stock market?
« Reply #20 on: December 06, 2017, 05:07:36 PM »
There are some non-profit charities now that provide micro-finance to people in developing countries. With enough diversification these could potentially be ok, though probably not your whole portfolio. I've no idea how the tax implications work when you get paid back the loan with interest (I think some do).

In Australia I think its possible to put money into the CEFC (Clean Energy Finance Corporation). Not sure how to do this, not sure if its a gov bond or something.

Infrastructure is probably another useful asset class, there are some ETFs for it out there depending on your country (we don't really have in Aus). There would no doubt be infrastructure projects out there that are more green orientated than building freeways for Clown Cars, eg Bike infrastructure, green energy networks, etc.

Health ETFs. Even in Aus there is a Global Health ETF.

Not sure if there are education ETFs? If there are ETFs that invest in Research publishing like Elsevier; Academic Insider tip; terribly unethical investment! Publishing companies are sharks!

Environmental (non-energy). Carbon farming? Forestry? In the absence of fires/with enough spatial diversification, Forestry might be a reasonable long term investment, not sure. You could potentially do your own Silviculture/AgroForestry with high value timber species if you have the land/right situation. Its not too hard, but a long term investment.

Agricultural ETFs. Every time there are agricultural advancements, the whole planet, people and the environment, benefit. The more efficient agriculture is, the less land that is used, the less carbon, the less water, the less nutrients, the less soil erosion, etc. The less poverty, malnutrition, starvation (usually, not quite always, but also ebbs and flows on different spatiotemporal scales).

Some of these options are more risky/volatile/higher MER than more trad ETF options, but with enough diversification and/or as small additions (eg 5% this, 5% that...) to your portfolio could work out fine and in fact be very powerful.

alexpkeaton

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Re: What is the best alternative if I want to divest from stock market?
« Reply #21 on: December 07, 2017, 08:40:47 PM »
Currently cars spend 4% of their time being used -
 this will increase to 50% or more and Auto manufactures will own their own cars and car service companies.  Garages will be converted into ultimate man caves and work shops and extra living quarters.  investing in parking lots is a poor mans game at this point.

Unless you solve the rush hour problem, most cars will still be sitting unused most of the day.

BuildingFrugalHabits

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Re: What is the best alternative if I want to divest from stock market?
« Reply #22 on: December 08, 2017, 06:48:35 AM »
Or maybe the technology will also make it easier for people to carpool and reduce the number of cars during rush hour.  I'm also hoping that autonomous vehicles will reduce traffic jams.

2Cent

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Re: What is the best alternative if I want to divest from stock market?
« Reply #23 on: December 08, 2017, 07:39:41 AM »
Currently cars spend 4% of their time being used -
 this will increase to 50% or more and Auto manufactures will own their own cars and car service companies.  Garages will be converted into ultimate man caves and work shops and extra living quarters.  investing in parking lots is a poor mans game at this point.

Unless you solve the rush hour problem, most cars will still be sitting unused most of the day.
Maybe, but not in a paid parking spot.