Morality and Investing?

[beav80]

I'm in a position where I'll cross the no-debt line soon enough, and being a debt averse person I'll look more at investing.  Since I have far under $100,000 saved I'm in the beginning stages of investing.  I always come up against the same problems:

1. A lot of the best companies for stocks are companies I'd never want to help by investing in them.  I can understand why Warren Buffett would invest in Coca-Cola but I don't like the company and think that it's products are bad for people so I don't want to invest there.

2. On the flip side, and "ethical" investing that I've read about tends to under-perform relative to the best index funds or mutual funds so they aren't great investments.

3.  Being debt-averse I don't want to splash out on an investment property unless I can save close to the total cost of the home.


Anyone in the same boat? 

Any other ways of looking at this?

Anyone put these concerns to bed for some higher ethical, or selfish, reason?
 
This interests me a lot as I'm sure a lot of people, like me, stay away from a lot of the same companies in their personal purchases but interact with them through considering or owning their stock through index, mutual, or individual stock ownership.  It's a funny situation to be in.

[gooki]

I'm interested to see where this goes. Like you I want to invest in companies that don't compromising my morals.

So far the best solution I've found is to invest in myself. I.e. start looking at running my own company.

[Skinnyneo]

Like you I recently crossed the no debt line and started investing.  I also agree with you and wanted to invest in companies that didn't compromise my morals.  That is where I think this thread will get interesting because my morals could be very different from the next persons. 

Coke is a good example.  I personally don't use their product very often.  Sure when I'm out drinking I might have a rum and coke or something, but I don't actively buy their products at the store.  It's not good for you.  However I feel that this is my choice and according to my morals it's every bodies choice what they put in their bodies.  Therefore I am okay owning Coke stock (there is also the whole they are a company that grows, pays dividends, etc., as well). 

However, I will not own any stocks from people who are "defense contractors," ie they make weapons.  Being hit by a missile, or run over by a tank is not my ones choice for the most part.  I don't like the industry and they way they generate profits so I will not invest in them.

There are of course many more angels to look at things but this is one way that I approach what I invest in.  It's hard to trust a company 100% of them time, but I find I can sleep at night so I guess that is the ultimate test.

[Daley]

It's not a comprehensive discussion by any means, but this thread is relevant to the topic at hand and might be worth reading.

[beav80]

I read through the attached thread and can agree with the idea put forth that we all cherry-pick (I don't like credit card companies because they take advantage of people but I have a credit card) but also that where I voluntarily place my money is a different thing in a very important way.  We all take advantage of the evils of society while trying to maintain a positive image of ourselves by doing small things that can be considered better like organic meat or hybrid cars.

The conundrum is still there though, how to seek a good return on investment from a without being so contradictory you can't deal with it.  On the other hand, if you see your investments from a more game-like view you want to get as many points on the board as possible and ethics has no place in your thoughts, just return on investment.  I'm still not 100% satisfied on this and I may never be but I appreciate anyone else's thoughts on this.