August 2007 Newsletter
News & Commentaries by Ron Robins
Market Turmoil. Ethics Of Credit Market Participants A Central Issue. – [COMMENTARY]From my perspective, the turmoil in the financial markets revolves around ethics. Participants in the credit and debt markets receive massive financial incentives to create innumerable types of new financial instruments which totally ignore reality. As the pitiful ethics are exposed, trust vanishes, and financial instruments are properly ’marked to market’ rather than some mathematicians hypothetical ’marked to model’. As the true market prices become known, financial markets adjust downwards to accommodate reality and many financial institutions receive major hits to their profits. Most ethical investors up to now have been completely ignorant of this risk in the financial institutions that they have invested in. It is time now for everyone to work with their investment advisors to determine just what are the best ethical stocks and bonds to invest in among the banking and brokerage concerns.
SEC combing Wall St books for subprime losses,by Joe Giannone and Lilla Zuill; Additional reporting by Tim McLaughlin, August 10, 2007, Reuters, USA.
What Is The Social Responsibility Of Business? – [COMMENTARY] I recently came across this old article. Despite its age, the article features the thoughts of three fascinating people, Milton Friedman (American Nobel Laureate in Economics who unfortunately passed-away last November), Whole Foods’ John Mackey, and Cypress Semiconductor’s T.J. Rodgers. The advantage of using corporate social responsibility towards social ends is deeply discussed and will interest anyone engaged in ethical investing or who consider themselves as socially responsible investors.
Rethinking the Social Responsibility of Business, November 2005, Reason Magazine, USA.
UK Ethical Funds Outperform Mainstream Funds For Past Three Years. – [COMMENTARY]According to the magazine Investment, Life & Pensions, for the three years prior to July 31, 2007, ethical funds returns were 57.2% compared to 52.39% for mainstream funds and 48.02% for the FTSE 100. For the 12 months to July 31, 2007, ethical funds gained 18.36%, mainstream funds 13.73% and the FTSE 100 13.28%. Investing in ethical stocks and bonds is certainly providing good returns for UK ethical investors!
Investors reap ethical rewards, by Hilary Osborne, August 29, 2007, Guardian Unlimited, UK.
Ethical Investments In The FTSE 350. – [COMMENTARY] This article focuses on what its authors believe are the best ethical investments in the London FTSE 350 index. It is a collaboration of The Observer’s Good Companies Guide and research compiled by Co-operative Investments. This is a helpful list for ethical investors interested in finding UK ethical stocks and bonds. Always get help with investing from your investment advisor though.
The good, the bad and the FTSE, by Ruth Sunderland, Heather Stewart and Zoe Wood, August 26, 2007, The Observer, UK.
European & Asian Socially Responsible Investment (SRI) Funds Under-Perform Benchmarks, Whereas US And UK SRI Funds Show Little Difference To Their Benchmarks. – [COMMENTARY] This global study is the first of its kind. And I welcome comments from readers on it. The basic point I gather from this work is that there are huge differences in gains between various SRI funds and that investors or investment advisors are not able to distinguish which funds will outperform the others. This drives home two points I have always made: (1) Selecting a fund, (or stocks that are good to invest in), is ultimately dependent upon one’s clarity of consciousness and depth of awareness. And, (2) that as global consciousness rises, the companies with the highest ethics will tend to outperform their competitors, and that this has yet to be tested over time. To assist with the developing our consciousness, I encourage ethical investors to look intoTranscendental Meditation (TM). Also, consider enrolling in ourEthical Investing Services andWorkshops. See this study at:
The Price of Ethics: Evidence from Socially Responsible Mutual Funds, by Luc Renneboog, Jenke ter Horst, Chendi Zhang, published by the Social Science Research Network. (To download the full pdf document, click download from Social Science Research Network, on top left of page.)
Study Argues For Clean Energy. – [COMMENTARY] Greenpeace International and European Renewable Energy Council (EREC) have completed a significant study that persuasively argues for green energy. Green investors should read this as it may help them find the best socially responsible stocks to invest in.
FUTURE INVESTMENT: A SUSTAINABLE INVESTMENT PLAN FOR THE POWER SECTOR TO SAVE THE CLIMATE, July, 2007,Greenpeace International and European Renewable Energy Council (EREC).
Religious Investors Turning To Wall Street With Zeal. – [COMMENTARY]No longer are religious activists satisfied with boycotts, etc., to get their message across to corporate America. With their new found substantial financial clout, they are bringing changes to corporations via the boardroom and Wall Street. I welcome this approach as it is resulting in greater transparency of corporate actions as well as showing companies the advantage of using corporate social responsibility (CSR) policies.
Religious Investments, by G. Jeffrey MacDonald, August 11, 2007, The Washington Post, USA. Also, along the same theme:Resolved: Public Corporations Shall Take Us Seriously, by Daska Slater, August 12, 2007, The New York Times, USA.