How Green is Your Money?

As the current economic crisis has worsened, our worries about how to sustain our individual financial stability have increased. And our own vulnerability in turn has made us more aware of the fragility of the environment. What if, in addition to foreclosures and credit freezes, we faced rising costs of water and energy and more scares about contaminated food? The Obama Administration sees alternative energy as one part of the solution for a healthier economic future. We hear a discussion beginning about how to do better, how to cut back, how to be more responsible. So, how green is your money?

Green money - yes, I mean both socially responsible and green in color. In the United States one name for the dollar is the "greenback." There is a raucous history of our money in Greenback: The Almighty Dollar and the Invention of America by Jason Goodwin. Today's crisis is easier to understand when put in the context of how we came to have a dollar we could transact. Quite a story. You might find it as interesting, as did I, to learn what a long and uncertain process brought us to the development of our stable currency. In the early years of our nation, paying for an item was not a simple matter of putting down your cash. You might have to discuss with the merchant the various conversion rates depending on whether you were going to pay in English pounds, fur skins, notes from a local bank or dollars of a distant bank. Your answer involved more arithmetic and time, and was not so quick and simple as responding to the question, "Will that be debit or credit?"

We are Time-Crunchers and want everything to be quick, and simple. You probably feel time-starved, and multi-tasking is your way of life. Do you find yourself making a strategy for the Saturday errands so that you can squeeze as much as possible into the time you have, and use as little as necessary of that oh so expensive gas? Well, you might also be demanding that your dollars do more. You want your invested dollars to grow, to provide a cushion in bad times, to offer you and your loved ones some luxuries, to circulate in the economy and to support the kinds of companies that you think are "good", green, socially conscious. That is a lot to ask of a dollar.

When you buy something, you are voting for that business to prosper. You might choose to have lunch in a small "mom and pop" restaurant instead of a big chain restaurant, both because you like the food and you want the small restaurant to survive. Likewise, you might purchase a product that is good for the environment, or uses fewer resources to produce, or doesn't add as much waste to the landfill. When you buy shares of that company or use its products you are voting, Yes for that company's initiatives and success. Do you have the time to research the company? To find out if its good intentions are backed by solid financials? How important to you are its employee practices, its handling of waste, its contributing to the community? Must they avoid alcohol, tobacco, gambling, weapons? How will you gauge the company it keeps? Are you concerned about the next tier out--the company's distributors and suppliers?

Money does not operate in a world of innocence--where there are no compromises, no gray areas, where good is purely good. Business endeavors might be characterized by Shakespeare's phrase "soiled in the working." That does not mean reprehensible, it means experienced, adult, surviving with values while navigating in a complex world.

Now, if you want your money and values to row in the same direction, there are many investment choices in the category of socially responsible investing, often abbreviated as SRI. Over two trillion dollars are invested in the SRI category.

Here are three steps to put you on the road to SRI. First, you have to define what is important to you. What industries do you want to avoid? What types of companies do you want to support? Second, you have to find the company that wins your approval. Yes, you can research individual companies. A short cut is looking at the annual report from various stock and bond funds to see which companies those SRI managers have identified. Alternatively, and more workable for you if you have little time or skill for analyzing individual companies, is to choose a fund rather than one company. Third, you have to decide what your benchmark for performance is. Can this fund provide the returns you want with the values you support?

I will highlight a few of the SRI funds to encourage you to learn more about them. These funds invest your money according to their prospectuses, which say, "NO" to certain types of companies or certain types of activities in companies. If the mission statement of that fund family reflects what you are screening in or out, then read the prospectus, go to the web site, learn more and invest appropriately. If you want more help, talk with me, toll-free: 800-631-1970, or your financial advisor.

The following funds have track records that show the ability of their research teams to find companies--each fund family defining "socially responsible" differently--and to provide returns on your money that--over time--have been better than keeping your money under the mattress.

Alger Green Fund (SPEGX) www.alger.com according to its website "seeks long-term capital appreciation by investing at least 80% of its net assets in equity securities of companies of any size that, in the opinion of the Fund's management, conduct their business in an environmentally sustainable manner, while demonstrating promising growth potential."

Next is Pax World. As stated on its website www.paxworld.com, in August 1971, Pax World founded the first publicly available, socially responsible fund, pioneering "an investment movement that is broadening the concept of investment analysis - Sustainable Investing. Drawing on our considerable analytical experience, we go beyond traditional financial metrics and scrutinize additional factors that often can have as much, if not more, influence on companies' investment performance. We are speaking of companies' environmental, social and corporate governance (ESG) performance."

Another fund family is Calvert Funds; www.calvertfunds.com, which offers "mutual funds designed to help you achieve financial security while helping to build a sustainable world and protect our quality of life." Among the categories it screens out are tobacco and weapons.

Like Calvert Funds, the next fund family, Parnassus Funds; www.parnassus.com, screens out similar categories of companies, and additionally, Parnassus avoids companies that generate electricity from nuclear power. Parnassus looks for companies that show positively that they: "respect the environment, treat their employees as partners, encourage diversity in the workplace, support the communities where they operate, [and] insist on ethical business dealings." Their website provides further discussion of their investing principles.

Winslow Green Growth (WGGFX); www.winslowgreen.com, is driven by the "mission of demonstrating that an environmentally focused investment strategy could yield positive results for clients." In addition, their website states they have expanded their "knowledge of crucial green markets, such as renewable energy, energy efficiency, and natural products."

As of February 2009, there are over 100 socially conscious, unique portfolio funds in Morningstar's data base, so you have many choices. Some are guided by their concern for animals, employee's rights, women, minorities, alternative fuels, impact on the environment, Christian values, ethical practices, etc. If you are patient and committed to "voting" for companies with practices that sustain life, and value better choices for society, then consider investing your money in one or more of the SRI funds. Invest for your own goals, and do good in the world too. Let your dollars multi-task as much as you do.

Investing in mutual funds involves risk, including the possible loss of principal. Investments in specialized industry sectors have additional risks, which are outlined in the prospectus. Investors should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. You can obtain a prospectus from your financial representative. Read carefully before investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor or me, prior to investing.

To make it easy for you to get all my contact information, just remember my company name: Wealthy Choices(R). That's what you want for yourself, isn't it?

My website is; www.wealthychoices.com. I'm Penelope Tzougros. Securities offered through LPL Financial, Member FINRA/SIPC. Financial planning is offered through Wealthy Choices(R) LLC.

I welcome your comments and questions, and please call me toll-free at 800-631-1970 for the latest information about 401k/403b rollovers, long-term care and; The Five Stages of Retirement.

Wealthy Choices(R) -- 800-631-1970.

Until next time - remember, I'm here for you. I'm Penelope, coaching you and cheering you on so that you make money choices that lead you to both inner and outer wealth.

Wealthy Choices(R) LLC. Penelope S. Tzougros. 800-631-1970. [email protected], 130 Turner Street, Bldg 3, Suite 230, Waltham, MA 02454. Securities offered through LPL Financial, Member FINRA/SIPC.