So, you read our recent Dueling Fools debate on socially responsible investing (SRI), and now you're itching to invest in some socially responsible companies. Where do you go from here? I've got some ideas for you.
First off, I want to give the not-so-interested-in-SRI camp some credit for pointing out that SRI isn't as easy and clear-cut as we may imagine. As Seth Jayson noted, when you define "responsible," that means "the usual suspects -- guns, tobacco, gambling -- are usually right out. From there on out, responsibility is in the eye of the beholder." How true. Is Starbucks suddenly "bad" because it's putting its name on a coffee liqueur? Some say yes, some say no. But let's move on for now.
One way to invest in an SRI manner is to do so through a socially responsible mutual fund. Shannon Zimmerman recommended one in our Champion Funds newsletter almost a year ago, and it's already up some 14%, versus 8% for its corresponding index. (Try the newsletter for free, and you'll be able to see all of our picks and how well they've done.)
Another way to go SRI is to find socially responsible companies on your own and invest in them directly via your friendly brokerage. To help you, here are the top socially responsible companies, according to Fortune magazine's "America's Most Admired Companies" issue:
- United Parcel Service (NYSE: UPS )
- Kinder Morgan Energy Partners
- FedEx (NYSE: FDX )
- Starbucks (Nasdaq: SBUX )
- Fortune Brands
- Anheuser-Busch (NYSE: BUD )
- BP (NYSE: BP )
- Altria Group (NYSE: MO )
Hmm . this is a useful beginning, but it seems a bit imperfect. Think, for example, of all the air pollution caused by FedEx and UPS trucks. And is that really a tobacco company in the 10th position? Yup, it is. The list isn't useless, though. If you believe, like I do, that most companies are a mix of admirable and not-so-admirable practices, then most companies are worth at least considering. If you're interested, start by visiting each company's corporate website and poking around.
Still, perhaps it would be better to look elsewhere for ideas. You might check out the Social Investment Forum, for example, or see which companies are being bandied about on the Fool's Socially Responsible Investing discussion board. Or try this -- pick one or more good socially responsible mutual funds, such as the Neuberger & Berman Socially Responsible Fund (FUND: NBSRX ) , and see what their top holdings are. Neuberger & Berman's top two holdings recently were Texas Instruments and Danaher.
If you'd like to learn more about socially responsible investing, check out these articles:
- Ethical Investments
- Is Socially Responsible Investing Possible?
- The Myth of Socially Responsible Investing
- The Myth of Socially Responsible Investing, Part 2
- Cemex Profits From Good Works
- Visionary Venture Capital
It's a fascinating field, and even if you don't invest entirely according to some SRI principles, you may want to incorporate a few into your investing strategy, or you might want to snag some shares of a few companies you can be proud to own.
And in the meantime, do give our MotleyFoolChampion Funds service a whirl -- it won't cost you anything, and you may find you discover a big bunch of terrific funds.
Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities atwww.foolanthropy.com.
LongtimeFoolcontributorSelena Maranjiandoes not own shares of any companies mentioned in this article.