Morally Responsible Investing

Matt wants to know what Dave thinks about investing in a morally responsible way. Dave tells Matt it's going to be almost impossible to stay away from the rabbit holes where the money goes.

QUESTION: Matt in Tucson wants to know what Dave thinks about investing in a morally responsible way. Dave tells Matt it’s going to be almost impossible to stay away from the rabbit holes where the money goes.

ANSWER: There are some people who do some socially responsible investing. There are two categories. There’s the category under which you’re looking at it from a Christian or from a religious worldview. For example, there are mutual funds that cater to Muslims because they have a different view on interest and how it can be earned and whether it’s usurious or not. They can’t make money off of somebody making money if they follow the Quran strictly, and many funds do. Then there’s the side that are socially concerned—for example, worried about animal rights. When someone is tuna fishing, does a dolphin get caught in the net? There are two categories—the religious side or the socially whatever—the animal rights or people who are concerned about green stuff and that kind of thing .

There’s a valid discussion to have here. I will throw out there a couple of other things to consider in this discussion, because it’s a spiritual discussion of, “Am I going to put God’s money that He called me to manage into trash?” The answer is I would never intentionally do that, but we need to understand two parts of this. One is that if you shop at a grocery store, you have supported everything that grocery store does. You can’t possibly track it all. It’s impossible. If you bank with a bank in our town that supports United Way … In our town, United Way is almost the exclusive support of Planned Parenthood. You're going to put some money in there. I’m not saying United Way is bad, but if you’re against abortion and you bank with a bank that has a big United Way campaign … You just can’t follow the money all the way down that rabbit hole.

You’ve got to just be fair about how legalistic you get about it, I guess. I back off and put some grace on it with some common sense and say, “There’s going to be some things I can’t handle. God has to, and it doesn’t mean I can’t invest there.”

The second thing that’s probably more important than that point is that when you buy stock in a company, that company does not profit. You’re not directly giving them money. If I buy a share of Home Depot stock, Home Depot doesn’t get the money unless they’re issuing stock brand new like Facebook did. But if I just go to my broker and say I want to buy 1,000 shares of Home Depot, I’m buying them from some other guy who’s selling them. That’s why they call it the stock exchange. I’m exchanging money for stock with another individual or company that holds that stock.

It’s like I bought an old Chevrolet car the other day. When I bought that car, the guy who owned the car got the money. Chevrolet didn’t get the money. I’m not supporting Chevrolet by buying that car. You can’t say that by buying into a mutual fund that owns stock that somehow you’re supporting that company. You are profiting from that company making a profit while they do bad things. That part is bad. But the idea that somehow you’re giving this company money … You’re really not because Chevy didn’t get any of that check I gave that guy the other day. I got a Chevy car, but Chevy really wasn’t involved in the transaction. You’ve got to think about that in this discussion too.

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