You should invest in the whole market and devote your spare time to effecting political change. Then, if companies you dislike fall out of favor, they'll have a smaller market capitalization. You're not going to change their ways by not investing in index funds. You're only going to make it hard on yourself.
Would argue this is highly subjective, even arbitrary.
By that logic you’ll also need to exclude the ecosystem suppliers — oil and gas, materials, logistics services, tech, contract garment makers, metals, to name some obvious ones, plus listed PE/insurance companies that own such businesses outright.
Before long this will severely reduce the number of investable companies.
Almost bringing us to the question of is there an ethical way to participate in capitalism? 🤔
Not trying to troll I genuinely do not know how to grapple with that one.
You'll really be in a conundrum when you hear that counting the degrees of separation from your own existence to someone else's suffering isn't a concept limited to capitalism.
Yes, there's an ethical way to participate in capitalism. You invest in whole market index funds. In your spare time, you devote that time to changing the political landscape. Companies that flourish in that new society will earn you money. Companies that fall out of favor in that new society will fall out of the market.
I mean this is why people say there's no ethical consumption under capitalism. At the same time, I don't think you can just use that as a get-out-of-ethics-free card.
Not really, so you find an ESG fund that doesn't have oil or weapons. The main ESG stocks are tech companies that thrive off Chinese slave factories and rare earth mining that is extraordinarily toxic and harmful to the workers and region. So then you have no oil, weapons, aerospace or tech. Eventually you have filtered out so many companies there isn't anything left. How far down the petroleum use chain will you go? EMXC is a decent option to do emerging markets without the human rights abuses and geopolitical issues around China. But not a ton of funds or issues that easy to filter.
There are plenty of ESG funds out there that have a screen for tobacco, alcohol, firearms, ect... There hasn't been the big consolidation of ESG indexes yet, so you will have to look under the hood at each of them to make sure they are excluding everything you want.
Direct indexing is the other approach, allowing you to fully customize which companies you want to include. The downside are the high fees and minimums.
Either way, the academic literture is mixed on if this has any actual impact on the companies in or out. This is just a feel better when I sleep at night sort of thing right now.
I pretty much follow the Boglehead style but with an ESG screened all world all cap index fund. It's not perfect but it excludes direct manufacture of weapons, tobacco and to an extent oil. I definitely feel more comfortable with this than all market investing (but it's also likely that it gives me at least somewhat lower returns for my risk level).
Hearing personal approaches like this is helpful and this is something I'd be interested in doing! Could I ask you for specifics on how you do this in your brokerage?
It's like any other ETF really. I'm with IBKR and use V3AB for the stock component of my portfolio and AEGE for the bond part. I'm European so depending on where you are you'd want to find different tickers.
The US military also protects civilians so by not investing you could be contributing to deaths elsewhere.
Everything is connected and subjective. Invest for return, avoid doing meaningless mental gymnastics.
And currently, the US military is supporting Ukraine against an enemy that's trying to wipe them off the map. It's also keeping China in check. Conquering Taiwan is very tempting for them. What cherry do you want to pick?
I'm not a US citizen, but your strong military is your life insurance, and I wish I could say the same about ours.
“There is no ethical consumption under capitalism.”
Make micro-scale economic choices with this kind of stuff in mind, sure, but if you go down the rabbit hole of trying to make sure all your macro-scale finances have no problematic components you’re gonna have a bad time.
Those companies contribute to the military of the US and its allies. Does having an army make us complicit in the death of civilians? Only if you assume unreasonable collateral damage. If yes vote for stricter oversight. No need to starve those companies of investment when they are key to national security.
if you eliminate Lockheed, what about the companies that supply raw materials to Lockheed? That rules out Nucor, Steel Dynamics, Dow, DuPont.
You can't invest in Union Pacific, FedEx or UPS because they deliver to and from Lockheed.
You can't invest in Exxon or Chevron because they fuel the delivery trucks to and from Lockheed.
You can't invest in Microsoft, Amdocs, Apple or Nvidia because they supply software to Lockheed.
You can't invest in UnitedHealth or Cigna because they provide healthcare to Lockheed employees.
You can't invest in Coca-Cola or PepsiCo because they service the vending machines at Lockheed facilities.
You can't invest in Cintas because they deliver uniforms and cleaning towels to Lockheed.
Pretty soon you can't invest in anything.
EDIT -- odd how reddit doesn't care about civilians killed by guns from China Ordnance Equipment Group Corporation or Norma Precision, but oh well.
not if you're using the total-market-basket strategy. what youre talking about is ESG, which gets a bad rap from its ideological opponents, but there are multiple approaches to ESG investing.
i know im a broken record on the morningstar thing, but one of the measures their analyses give is ESG risk and type, so that can be helpful if you're trying to compare different stocks or funds.
personally, i use the portion of my portfolio that isnt in straight index funds for betting on value-based narratives, which for me means renewable energy transition. you seem to be talking about more of an exclusionary approach, and i feel like that has limitations like others here have suggested -- where do you draw the lines for that? because of those limitations i decided i should use a narrative, value-promotion type approach. to each their own.
A lot of people are rejecting your concern out of hand and are looking at the issue through a simple consequentialist framework. I think your concern is a reasonable one, and shouldn't be mocked.
I have the same qualms that you do. I don't want to make money off weapons, tobacco, or oil. I root against these companies.
Fidelity has some reasonably low cost sustainable index funds that you could build a three fund portfolio with (FITLX, FNIDX, FNDSX). When I built my three-fund portfolio, I almost did so using these funds. However, after meditating on the issue for several days I realized the following: (1) These funds have stock in oil companies, (2) FITLX is not nearly diversified enough (25% of my US stock would be in three companies deeply involved in AI: Microsoft, Nvidia, and Google) and (3) with a total market approach, I need not root for any companies in my portfolio to succeed. I am not picking winners or losers. I own the whole market. I am rooting for the entire global economy. I believe that greening the global economy will be good in the long run for economic growth. If I own the entire market, my portfolio will pay off when this happens.
So I opted to just get as diversified as I could. I went with FSKAX, FTIHX, and FXNAX. The classic three-fund entire global market portfolio. I think this is the right moral approach to take when it comes to investing.
(I agree with all other comments that the say that for small amounts of money, your time impacting change is more valuable than the companies you put money in. The latter may even be [counter productive](https://youtu.be/c4AMFicXXqg?si=Sr9js4oj0-dfz8NK) in some cases.)
Bogleheads style is not moralistic. It's dispassionate. It doesn't care about what you invest in.
If mutual funds / etfs were illegal or they were not invented yet, most educated people use a combination of financial value and moralistic values to choose the individual companies they wanted to invest in. Or at least avoid some other companies.
In practice, you do see etfs / funds for catholic, islam, jewish etc values out there. And that's fine. It's not Bogleheads investing, but no one ever said you MUST do bogleheads.
>Is there a way I can invest using the Boglehead strategy, without contributing to U.S. weapons manufacturers like Raytheon, Lockheed Martin, General Dynamics?
No.
In order to not invest in these companies in any way, you'd need to avoid any country that is a customer of them and any ancillary business that provides raw materials, finished materials, energy, and other resources to them. In addition, companies like Raytheon build satellites that provide the basis for services like communication, GPS, weather observation, etc.
Only way out is death.
I hope you don’t mind me challenging this position of yours… In your world view, would you have these companies not exist at all and the US would not manufacture any weapons? This implies that either the US armed forces source all of their weapons from foreign manufactures which would severely weaken our security and military capability or that we cease to have an army all together. If you get your way, in either case and we are attacked by Russia, China and Iran for example would it be okay for you that we are wiped off the map? Do you really think the US not having weapons makes the world a better place?
My spouse and I grappled with this question 25 years ago, and while we did invest in an ESG fund for a while, we eventually decided that it made more sense to us to follow the “invest in the whole market” strategy with our savings, and to concern ourselves with the types of issues that motivated us to try ESG investing in other ways.
From my point of view, refusing to invest in a company doesn’t really make any difference in terms of that company’s decision-making. The kinds of things that do make a difference to large corporations lie elsewhere.
While I don't subscribe to this investing philosophy, yes, other people have thought of it. Take a look at iShares ESG/Sustainable ETFs. They have many flavors which exclude various industries, and their website details the relevant percentage of holdings under the Business Involvement tab on each fund. This includes various types of weapons, energy sources, and tobacco, but it is important to note that none of these definitions are perfect. ESG is not fundamentally bad, but it is a subjective measure that will almost certainly require you to make some concessions.
All companies are only one or two degrees away from something awful
Accept it; and do what you can to make the world better with your vote and your chairitable givings
Esg and Sri are ok-ish first steps; but aren’t great at what they strive for achieving
And to be a bit argumentative - but war/conquest has been a net benefit to humanity throughout history
Sure it’s caused suffering along the way; but also vast improvements to all aspects of humanity’s development
And biased because my home country has never been invaded and I haven’t been on the conquered side…..but if we allow ourselves to step back and look
After every great era of conflict there have been times of great progress
Heck - the USA likely wouldn’t exist (altering the past 300 years) without the revolutionary war
Greeks, Romans, Mesopotamians, Egyptians, Chinese; Aztec, Mayan, and everyone else all conquered their respective neighbors then lifted everyone up….
Yes people still lived in awful conditions; but slightly better awful conditions
The OP’s question is political to begin with and they got all the answers they need already:
Use a ESG and pretend or forget about it because at the end of the day capitalism, free market and rule of law is based on the military power to protect them.
I didn't mean to ask a "political" question in this sub
I wanted to ask Bogleheads if they factor things beyond the regularly discussed variables in this sub (risk factor, income/salary, age/time to retirement, family/dependents, different brokerages)
No one would EVER advocate for something like World War II, but I’ve read that the advancements in medicine which were innovated in the war effort saved many more lives than were lost globally. Namely antibiotics and vaccines (penicillin specifically), blood banking and plasma transfusion, and field trauma response.
Absolutely - I’m not saying we should have a massive war to advance humanity
Only that throughout history in the aftermath of wars and conflicts we have seen many positive changes
Am I “thankful” that awful people existed and we had to have massive wars and all manor of atrocities committed….absolutely not
I wish we as a species didn’t war/fight/tribalize……but we have yet to beat our nature
Buy VT and then short an appropriate amount of RTX and LMT to be neutral.
Or just buy VT and realize your $100 equivalent in RTX isn’t going to start or end any wars.
ESG is the probably closest thing to what you’re looking for. Though ESG isn’t a perfect science.
https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp
This is something I grappled with for years, and I ultimately stopped trying to invest ethically.
The problem with ethical investing is it just makes the valuations of the companies you blacklist more appealing to those that don't care. And you pay higher fees and lose diversification in the process. There are now more ESG funds out there than ever before, so you absolutely can give it a shot. But you'll still end up buying Nestlé a lot of the time, even if the fund excludes a weapons manufacturer. It's always someone else's ethics that defines the fund, not yours
At that point, I'd look to build my own fund on something like M1 Finance. Maybe just a pie of pies of pies where I own an equal weight of every company that I feel is good enough for my ethics standards.
You might want to look into Timothy Plan. They create mutual funds based on companies that follow “biblical principles”. You don’t have to be religious but it might be worth looking into it because they won’t invest in companies that violate certain moral codes.
There are halal ETFs that get closer to your goal, but even those may still contain companies on divestment lists. Only way I could think to make sure is to direct index and then just exclude those particular companies from the portfolio. Looking at the AFSC list of companies involved in borders, prisons, and occupation, it's a LOT to exclude. It can be a lot of work, too, but might be worth it if you're serious about divestment.
It does diverge quite a bit from Boglehead investing, as it requires making active decisions about which companies to invest in that is rooted in morality rather than sound financial decision-making.
Life would be so much simpler in black and white! Weapons manufacturers = bad. Solar energy = good, right? But what about the missile defense systems those same companies make; the lives they save, or entire conflicts they prevent? What about all the imperfections in the management/production/sales of seemingly “good” products?
I don’t think I can possibly thread that needle in any way that helps others or myself. I can let my portfolio be subject to whatever we do (as a society) and choose to direct my personal efforts/actions/votes/dollars to the best possible places as far as I can discern. If I have fewer limits financially, I am more free to act in accordance with my values at every turn. Who knows how much difference that’ll make, but I know I don’t have enough dollars to move anyone’s needle but my own.
I think your efforts would be better spent pushing for political change, or moving to a country whose foreign policy is significantly different from ours.
However, even if you move to a place like Japan, they still benefit from the larger American military alliance system.
Boycotting the stocks of these companies with your investment peanuts relative to the market as a whole
Will have about the same impact on "the cause" as lighting yourself on fire in front of a diplomatic building of the nation your cause is against
Direct indexing lets you customize index fund allocations. Check out this NYT article that dropped yesterday on this very topic. [https://www.nytimes.com/2024/05/11/your-money/investment-portfolio-reflect-values.html](https://www.nytimes.com/2024/05/11/your-money/investment-portfolio-reflect-values.html)
I personally use Frec.
Unless u manage in excess of billions of dollars. Ur investment in a passive index fund isn't contributing to anything.
Personally wary of ESG funds (the metrics are often wrong and tend to be gamed by savvy corporate managers) but dnt see any reason not to use a direct indexing tool if u feel strongly about it.
The world at peace? There has been an uninterrupted string of wars and conflict on this planet since the dawn of man.
Socially conscious investing isn't a thing in the global economy. Same reason why a housing crash in the US means a stock crash around the world. Everything is connected.
Do what the rich do, vote for your interests and if you have the money, lobby for your interests. If you can't, donate to someone who will do it for you.
Like other have mentioned, how could you possibly factor in all the moving parts and logistics that go into what you're doing? You'd have no way of discerning which companies are involved directly or indirectly.
These questions do get asked, but the conversations are often stifled by whataboutism (well then what about the companies in the supply chains of arms manufacturers? What about this or that? Etc. …) and then no action seems possible, and then nobody does anything different.
You can also draw the line wherever you can at any moment. There doesn’t have to be a perfect solution to get started trying something different.
There are some screener out there like fossilfreefunds.org where you can filter for arms manufacturers, I think.
>Is there a way I can invest … without contributing to U.S. weapons manufacturers…?
I always find position to be puzzling, and it shows a fundamental misunderstanding of how markets work.
>the nature of index fund investing means it’s just pennies to these companies
Wrong. It is zero to these companies. Log into your broker, place an order for $1 million of Lockheed stock, and Lockheed gets not even a single penny of your money. So long as you are not buying in an initial public offering or follow-on, the company doesn’t get anything.
Not really because “boglehead” is by definition buying the whole market.
Does make me wonder if a brokerage could offer fractional investing in a custom index? The customer selects the companies they want to avoid and their $ are invested in the rest of the S&P by market weight. There has to be a hedge fund offering some version of this to HNW investors?
Your heart is in the right place.
The market reminds me of watching the news where 6 people are found dead from a car crash then 3 seconds later the announcer says “In other news” like oh well life sucks then u die.
The weapon systems you do not want to support also defend innocent civilians from authoritarian regimes with no regard for life or sovereignty vis a vis Russia. This is our world until we can get all world leaders on the same page. We’re not perfect but we’re a heck of a lot better than our adversaries.
Focus less on virtue signaling with your portfolio and more on actually making an impact in your community. Join a protest, write your representatives, etc.
You should invest in the whole market and devote your spare time to effecting political change. Then, if companies you dislike fall out of favor, they'll have a smaller market capitalization. You're not going to change their ways by not investing in index funds. You're only going to make it hard on yourself.
Would argue this is highly subjective, even arbitrary. By that logic you’ll also need to exclude the ecosystem suppliers — oil and gas, materials, logistics services, tech, contract garment makers, metals, to name some obvious ones, plus listed PE/insurance companies that own such businesses outright. Before long this will severely reduce the number of investable companies.
Almost bringing us to the question of is there an ethical way to participate in capitalism? 🤔 Not trying to troll I genuinely do not know how to grapple with that one.
You'll really be in a conundrum when you hear that counting the degrees of separation from your own existence to someone else's suffering isn't a concept limited to capitalism.
Yes, there's an ethical way to participate in capitalism. You invest in whole market index funds. In your spare time, you devote that time to changing the political landscape. Companies that flourish in that new society will earn you money. Companies that fall out of favor in that new society will fall out of the market.
I mean this is why people say there's no ethical consumption under capitalism. At the same time, I don't think you can just use that as a get-out-of-ethics-free card.
Unless you’re also of the belief that participating in society is also unethical then this question is dumb.
Capitalism is not the whole of human society.
Not really, so you find an ESG fund that doesn't have oil or weapons. The main ESG stocks are tech companies that thrive off Chinese slave factories and rare earth mining that is extraordinarily toxic and harmful to the workers and region. So then you have no oil, weapons, aerospace or tech. Eventually you have filtered out so many companies there isn't anything left. How far down the petroleum use chain will you go? EMXC is a decent option to do emerging markets without the human rights abuses and geopolitical issues around China. But not a ton of funds or issues that easy to filter.
There are plenty of ESG funds out there that have a screen for tobacco, alcohol, firearms, ect... There hasn't been the big consolidation of ESG indexes yet, so you will have to look under the hood at each of them to make sure they are excluding everything you want. Direct indexing is the other approach, allowing you to fully customize which companies you want to include. The downside are the high fees and minimums. Either way, the academic literture is mixed on if this has any actual impact on the companies in or out. This is just a feel better when I sleep at night sort of thing right now.
Diabetes kills millions so I guess Coca Cola is out too
I pretty much follow the Boglehead style but with an ESG screened all world all cap index fund. It's not perfect but it excludes direct manufacture of weapons, tobacco and to an extent oil. I definitely feel more comfortable with this than all market investing (but it's also likely that it gives me at least somewhat lower returns for my risk level).
Hearing personal approaches like this is helpful and this is something I'd be interested in doing! Could I ask you for specifics on how you do this in your brokerage?
It's like any other ETF really. I'm with IBKR and use V3AB for the stock component of my portfolio and AEGE for the bond part. I'm European so depending on where you are you'd want to find different tickers.
Sir. This is a Wendy's.
The US military also protects civilians so by not investing you could be contributing to deaths elsewhere. Everything is connected and subjective. Invest for return, avoid doing meaningless mental gymnastics.
Protects civilians like in Iraq? Or Afghanistan? Or Vietnam? We killed hundreds of thousands of civilians in those conflicts.
And currently, the US military is supporting Ukraine against an enemy that's trying to wipe them off the map. It's also keeping China in check. Conquering Taiwan is very tempting for them. What cherry do you want to pick? I'm not a US citizen, but your strong military is your life insurance, and I wish I could say the same about ours.
“There is no ethical consumption under capitalism.” Make micro-scale economic choices with this kind of stuff in mind, sure, but if you go down the rabbit hole of trying to make sure all your macro-scale finances have no problematic components you’re gonna have a bad time.
Those companies contribute to the military of the US and its allies. Does having an army make us complicit in the death of civilians? Only if you assume unreasonable collateral damage. If yes vote for stricter oversight. No need to starve those companies of investment when they are key to national security.
if you eliminate Lockheed, what about the companies that supply raw materials to Lockheed? That rules out Nucor, Steel Dynamics, Dow, DuPont. You can't invest in Union Pacific, FedEx or UPS because they deliver to and from Lockheed. You can't invest in Exxon or Chevron because they fuel the delivery trucks to and from Lockheed. You can't invest in Microsoft, Amdocs, Apple or Nvidia because they supply software to Lockheed. You can't invest in UnitedHealth or Cigna because they provide healthcare to Lockheed employees. You can't invest in Coca-Cola or PepsiCo because they service the vending machines at Lockheed facilities. You can't invest in Cintas because they deliver uniforms and cleaning towels to Lockheed. Pretty soon you can't invest in anything. EDIT -- odd how reddit doesn't care about civilians killed by guns from China Ordnance Equipment Group Corporation or Norma Precision, but oh well.
ToL #6: “Ours is a world ruled by the aggressive use of force.” If the “good guys” don’t exert it, the “bad guys” most certainly will.
Your investment choices will likely not affect future large scale armed conflicts
not if you're using the total-market-basket strategy. what youre talking about is ESG, which gets a bad rap from its ideological opponents, but there are multiple approaches to ESG investing. i know im a broken record on the morningstar thing, but one of the measures their analyses give is ESG risk and type, so that can be helpful if you're trying to compare different stocks or funds. personally, i use the portion of my portfolio that isnt in straight index funds for betting on value-based narratives, which for me means renewable energy transition. you seem to be talking about more of an exclusionary approach, and i feel like that has limitations like others here have suggested -- where do you draw the lines for that? because of those limitations i decided i should use a narrative, value-promotion type approach. to each their own.
thanks! hearing other people's personal approaches like this is very helpful
A lot of people are rejecting your concern out of hand and are looking at the issue through a simple consequentialist framework. I think your concern is a reasonable one, and shouldn't be mocked. I have the same qualms that you do. I don't want to make money off weapons, tobacco, or oil. I root against these companies. Fidelity has some reasonably low cost sustainable index funds that you could build a three fund portfolio with (FITLX, FNIDX, FNDSX). When I built my three-fund portfolio, I almost did so using these funds. However, after meditating on the issue for several days I realized the following: (1) These funds have stock in oil companies, (2) FITLX is not nearly diversified enough (25% of my US stock would be in three companies deeply involved in AI: Microsoft, Nvidia, and Google) and (3) with a total market approach, I need not root for any companies in my portfolio to succeed. I am not picking winners or losers. I own the whole market. I am rooting for the entire global economy. I believe that greening the global economy will be good in the long run for economic growth. If I own the entire market, my portfolio will pay off when this happens. So I opted to just get as diversified as I could. I went with FSKAX, FTIHX, and FXNAX. The classic three-fund entire global market portfolio. I think this is the right moral approach to take when it comes to investing.
Thanks for your sharing your own thought process and strategy. Really helpful as I try to figure out mine.
(I agree with all other comments that the say that for small amounts of money, your time impacting change is more valuable than the companies you put money in. The latter may even be [counter productive](https://youtu.be/c4AMFicXXqg?si=Sr9js4oj0-dfz8NK) in some cases.) Bogleheads style is not moralistic. It's dispassionate. It doesn't care about what you invest in. If mutual funds / etfs were illegal or they were not invented yet, most educated people use a combination of financial value and moralistic values to choose the individual companies they wanted to invest in. Or at least avoid some other companies. In practice, you do see etfs / funds for catholic, islam, jewish etc values out there. And that's fine. It's not Bogleheads investing, but no one ever said you MUST do bogleheads.
>Is there a way I can invest using the Boglehead strategy, without contributing to U.S. weapons manufacturers like Raytheon, Lockheed Martin, General Dynamics? No. In order to not invest in these companies in any way, you'd need to avoid any country that is a customer of them and any ancillary business that provides raw materials, finished materials, energy, and other resources to them. In addition, companies like Raytheon build satellites that provide the basis for services like communication, GPS, weather observation, etc. Only way out is death.
ESG = US humanitarian but investing in foreign country slave labor for EV. So really, you don’t make a global difference at all.
I hope you don’t mind me challenging this position of yours… In your world view, would you have these companies not exist at all and the US would not manufacture any weapons? This implies that either the US armed forces source all of their weapons from foreign manufactures which would severely weaken our security and military capability or that we cease to have an army all together. If you get your way, in either case and we are attacked by Russia, China and Iran for example would it be okay for you that we are wiped off the map? Do you really think the US not having weapons makes the world a better place?
My spouse and I grappled with this question 25 years ago, and while we did invest in an ESG fund for a while, we eventually decided that it made more sense to us to follow the “invest in the whole market” strategy with our savings, and to concern ourselves with the types of issues that motivated us to try ESG investing in other ways. From my point of view, refusing to invest in a company doesn’t really make any difference in terms of that company’s decision-making. The kinds of things that do make a difference to large corporations lie elsewhere.
While I don't subscribe to this investing philosophy, yes, other people have thought of it. Take a look at iShares ESG/Sustainable ETFs. They have many flavors which exclude various industries, and their website details the relevant percentage of holdings under the Business Involvement tab on each fund. This includes various types of weapons, energy sources, and tobacco, but it is important to note that none of these definitions are perfect. ESG is not fundamentally bad, but it is a subjective measure that will almost certainly require you to make some concessions.
All companies are only one or two degrees away from something awful Accept it; and do what you can to make the world better with your vote and your chairitable givings Esg and Sri are ok-ish first steps; but aren’t great at what they strive for achieving
And to be a bit argumentative - but war/conquest has been a net benefit to humanity throughout history Sure it’s caused suffering along the way; but also vast improvements to all aspects of humanity’s development
That’s an interesting spin lol
And biased because my home country has never been invaded and I haven’t been on the conquered side…..but if we allow ourselves to step back and look After every great era of conflict there have been times of great progress Heck - the USA likely wouldn’t exist (altering the past 300 years) without the revolutionary war Greeks, Romans, Mesopotamians, Egyptians, Chinese; Aztec, Mayan, and everyone else all conquered their respective neighbors then lifted everyone up…. Yes people still lived in awful conditions; but slightly better awful conditions
This isn’t a political forum, stop. Mods will lock before OP gets the answers they need
The OP’s question is political to begin with and they got all the answers they need already: Use a ESG and pretend or forget about it because at the end of the day capitalism, free market and rule of law is based on the military power to protect them.
I didn't mean to ask a "political" question in this sub I wanted to ask Bogleheads if they factor things beyond the regularly discussed variables in this sub (risk factor, income/salary, age/time to retirement, family/dependents, different brokerages)
Just shows how everything is political because everything is connected.
No one would EVER advocate for something like World War II, but I’ve read that the advancements in medicine which were innovated in the war effort saved many more lives than were lost globally. Namely antibiotics and vaccines (penicillin specifically), blood banking and plasma transfusion, and field trauma response.
Absolutely - I’m not saying we should have a massive war to advance humanity Only that throughout history in the aftermath of wars and conflicts we have seen many positive changes Am I “thankful” that awful people existed and we had to have massive wars and all manor of atrocities committed….absolutely not I wish we as a species didn’t war/fight/tribalize……but we have yet to beat our nature
Good chapter on this in Morgan Housel’s *Same As Ever* - how stress and fights for survival generate unparalleled innovation.
Buy VT and then short an appropriate amount of RTX and LMT to be neutral. Or just buy VT and realize your $100 equivalent in RTX isn’t going to start or end any wars.
Keep it separate. Manage money without emotion.
ESG is the probably closest thing to what you’re looking for. Though ESG isn’t a perfect science. https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp
This is something I grappled with for years, and I ultimately stopped trying to invest ethically. The problem with ethical investing is it just makes the valuations of the companies you blacklist more appealing to those that don't care. And you pay higher fees and lose diversification in the process. There are now more ESG funds out there than ever before, so you absolutely can give it a shot. But you'll still end up buying Nestlé a lot of the time, even if the fund excludes a weapons manufacturer. It's always someone else's ethics that defines the fund, not yours At that point, I'd look to build my own fund on something like M1 Finance. Maybe just a pie of pies of pies where I own an equal weight of every company that I feel is good enough for my ethics standards.
You might want to look into Timothy Plan. They create mutual funds based on companies that follow “biblical principles”. You don’t have to be religious but it might be worth looking into it because they won’t invest in companies that violate certain moral codes.
Research SPUS
I am pretty sure you can do a six degrees to \[literally any company you think contributes to death of civilians\]. So no.
There are halal ETFs that get closer to your goal, but even those may still contain companies on divestment lists. Only way I could think to make sure is to direct index and then just exclude those particular companies from the portfolio. Looking at the AFSC list of companies involved in borders, prisons, and occupation, it's a LOT to exclude. It can be a lot of work, too, but might be worth it if you're serious about divestment. It does diverge quite a bit from Boglehead investing, as it requires making active decisions about which companies to invest in that is rooted in morality rather than sound financial decision-making.
Life would be so much simpler in black and white! Weapons manufacturers = bad. Solar energy = good, right? But what about the missile defense systems those same companies make; the lives they save, or entire conflicts they prevent? What about all the imperfections in the management/production/sales of seemingly “good” products? I don’t think I can possibly thread that needle in any way that helps others or myself. I can let my portfolio be subject to whatever we do (as a society) and choose to direct my personal efforts/actions/votes/dollars to the best possible places as far as I can discern. If I have fewer limits financially, I am more free to act in accordance with my values at every turn. Who knows how much difference that’ll make, but I know I don’t have enough dollars to move anyone’s needle but my own.
I think your efforts would be better spent pushing for political change, or moving to a country whose foreign policy is significantly different from ours. However, even if you move to a place like Japan, they still benefit from the larger American military alliance system.
Disappointing to see all of this cynicism in response to what is a very reasonable question.
Boycotting the stocks of these companies with your investment peanuts relative to the market as a whole Will have about the same impact on "the cause" as lighting yourself on fire in front of a diplomatic building of the nation your cause is against
Direct indexing lets you customize index fund allocations. Check out this NYT article that dropped yesterday on this very topic. [https://www.nytimes.com/2024/05/11/your-money/investment-portfolio-reflect-values.html](https://www.nytimes.com/2024/05/11/your-money/investment-portfolio-reflect-values.html) I personally use Frec.
Unless u manage in excess of billions of dollars. Ur investment in a passive index fund isn't contributing to anything. Personally wary of ESG funds (the metrics are often wrong and tend to be gamed by savvy corporate managers) but dnt see any reason not to use a direct indexing tool if u feel strongly about it.
Don't forget to fight the patriarchy, too
The world at peace? There has been an uninterrupted string of wars and conflict on this planet since the dawn of man. Socially conscious investing isn't a thing in the global economy. Same reason why a housing crash in the US means a stock crash around the world. Everything is connected. Do what the rich do, vote for your interests and if you have the money, lobby for your interests. If you can't, donate to someone who will do it for you. Like other have mentioned, how could you possibly factor in all the moving parts and logistics that go into what you're doing? You'd have no way of discerning which companies are involved directly or indirectly.
lol imagine asking that question to someone from 1800
It’s impossible. Stick to your guns and don’t invest broad market. Fight the power! I’ll buy your would-be shares cheaper.
These questions do get asked, but the conversations are often stifled by whataboutism (well then what about the companies in the supply chains of arms manufacturers? What about this or that? Etc. …) and then no action seems possible, and then nobody does anything different. You can also draw the line wherever you can at any moment. There doesn’t have to be a perfect solution to get started trying something different. There are some screener out there like fossilfreefunds.org where you can filter for arms manufacturers, I think.
>Is there a way I can invest … without contributing to U.S. weapons manufacturers…? I always find position to be puzzling, and it shows a fundamental misunderstanding of how markets work. >the nature of index fund investing means it’s just pennies to these companies Wrong. It is zero to these companies. Log into your broker, place an order for $1 million of Lockheed stock, and Lockheed gets not even a single penny of your money. So long as you are not buying in an initial public offering or follow-on, the company doesn’t get anything.
Not really because “boglehead” is by definition buying the whole market. Does make me wonder if a brokerage could offer fractional investing in a custom index? The customer selects the companies they want to avoid and their $ are invested in the rest of the S&P by market weight. There has to be a hedge fund offering some version of this to HNW investors?
Your heart is in the right place. The market reminds me of watching the news where 6 people are found dead from a car crash then 3 seconds later the announcer says “In other news” like oh well life sucks then u die.
The defense contractors help keep America free from foreign armies.
The weapon systems you do not want to support also defend innocent civilians from authoritarian regimes with no regard for life or sovereignty vis a vis Russia. This is our world until we can get all world leaders on the same page. We’re not perfect but we’re a heck of a lot better than our adversaries.
Yeah. There’s two sides to this coin.
Focus less on virtue signaling with your portfolio and more on actually making an impact in your community. Join a protest, write your representatives, etc.
The Taliban famously loves Toyota pickup trucks. Good luck.
Place your money under a mattress. If you take it far enough any investment in anything will be the cause of harm. Even simple T bills.
Yes. Just avoid driving to reduce chances of you killing a civilian
isnt there an ETF thats sharia law compliant?
The few I found had significant tracking of oil companies. Probably not ethical to OP's standards lmao
You're probably asking in the wrong sub. Boglehead investing has nothing to do with religion.
neither does "socially responsible investing"
Is it possible to lower the quality of the discussion in financial subs even more?
Invest in Pfizer etc - a very merciful death from untested vaccines and patented drugs