Jack Falvey's Investor Education Briefs: Green investments return limited green
Selecting investments for anything other than returns must be questioned. Social investing is a “feel good” practice at best. You are free to feel as you wish, but feelings are not the things of which returns are made. “Who is creating wealth with other people’s money?” is the question. Listen to the numbers.
“To thine own self be true,” but let others less emotionally involved shape your investment profile. Separating emotions from investing is not easily done. Paying someone to do it for you is an accepted practice.
How numbers are generated dictates their sustainability in the true sense of the word. In this age of index funds and complex combinations of investment products, attempting to divide out those elements that we wish to support emotionally is not easily done. Why add unnecessary complexity to what is already a process with many moving parts?
If you controlled something approaching sovereign funds in size, you might be able to make a statement in support of your position. Even then it would be a political statement and not a financial move with any recognizable impact except upon your portfolio’s performance. It well could have a less-than-positive result and provide less return than available with more conventional strategies.
Creating net worth is where you want to go. Go directly to goal. Do not attempt to collect green credits along the way. They get in the way.
Jack Falvey is a frequent contributor to the Union Leader. He can be contacted at Jack@Falvey.org.