It can be tempting to put our money where our mouth is. Socially responsible investing is more and more popular as investors choose to apply their values to their investing, rather than parking their money in companies that give them the willies.
Such decisions make sense to me -- as long as the resulting investments are good performers, as many socially responsible funds are. The Winslow Green Growth (WGGFX) fund, for example, has ridden investments in First Solar
Investors with strong political views, left or right, have had investment options open to them as well. But these funds weren't back-the-truck-up investments then, and they haven't improved since.
Of the two "Blue" funds, the small-cap one is being liquidated, and the large-cap one is being renamed The Blue Fund. Its top holdings recently included CVS Caremark
Meanwhile, the right-leaning Free Enterprise Action (FEAOX) fund has deeply uninspiring returns, with ExxonMobil
In short, having a values- or politics-oriented focus isn't enough to ensure good performance in the stock market. We can arguably do more good for the world by investing in any of the many top-notch mutual funds out there -- like the ones we search out in our Champion Funds newsletter.
If we invest $10,000 for 10 years and earn a market-beating average of 12%, we'll end up with more than $30,000. Those gains will help us afford to make sizable gifts to the progressive or conservative causes of our choice, while keeping a share of the profit for ourselves, too. But by investing in poor performers, our money may just stagnate, shrink, or only grow at a slow pace, leaving us with less to contribute -- and less to enjoy.