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sschullo

Interesting ESG investment article.

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By Larry Swedroe, a well-known author in the Boglehead community. His most famous book: "What Wall Street doesn't want you to know" and "Winning a Bond Strategy" and other books. 

Many of our colleagues and the young FI and FIRE communities are interested in the Environment, Social and Governance investing, known as ESG. 

Larry's article show promise! Investors are demanding compensation for the risk taken by carbon emissions, and so Larry's article points out that investors are getting compensated for that risk. It doesn't really move the needle towards ESG investing but the investor demands are very promising. 

https://seekingalpha.com/article/4359161-impact-of-carbon-risk-on-stock-returns?utm_medium=email&utm_source=seeking_alpha&mail_subject=larry-swedroe-the-impact-of-carbon-risk-on-stock-returns&utm_campaign=rta-author-article&utm_content=link-0

I am currently not invested specifically in any ESG funds because those funds are expensive and don't fit my diversification plan. However, what I have done is to purchase solar panels 12 years ago and 2 100% electric cars (no hybrids!). And saved a bunch of money. Here is an article published in the Huffington Post detailing my solar panels and 2 electric car investments: https://www.huffpost.com/entry/renewable-energy-investme_1_b_8028316 (This article is five years old, and I am updating it as we speak). 

We cannot wait for somebody else to clean up the environment. 

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FITLX and FNIDX have low expense ratios.

Aligning where your money goes with your values is noble, but admittedly difficult to accomplish through index investing. The two funds above are the bulk of my Roth 403b elections for when I decide to utilize that account.

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On 7/23/2020 at 11:32 PM, ScottO said:

FITLX and FNIDX have low expense ratios.

Aligning where your money goes with your values is noble, but admittedly difficult to accomplish through index investing. The two funds above are the bulk of my Roth 403b elections for when I decide to utilize that account.

Thanks ScottO. Good choices

Fitlx details: https://fundresearch.fidelity.com/mutual-funds/summary/31635V398 Domestic Large-cap blend. 

FNIDX: https://fundresearch.fidelity.com/mutual-funds/summary/31635V349 International, ex U.S., large-cap blend as well: https://fundresearch.fidelity.com/mutual-funds/summary/31635V349

Both passive strategy, moderate risk, low expenses. 

I don't remember the fund that I was invested years ago. Dropped it when I learned about proper diversification, with an eye out for my risk tolerance and of course low costs and passive strategy.  

As I have stated here before, I practice responsible investing by reducing my consumption of petroleum products by purchasing solar panels and electric cars. Yeah, being the first adapter was expensive but after 12 years the solar panel investment of $33000 was paid off and I save money on reduced maintenance, time and no petroleum products for the electric cars (no gas, no oil and filter changes, no grease jobs, no transmissions, no motor cooling systems and much less time at those awful ripoff dealerships). 

But what I do is not for everybody. Not sure if anybody else has an electric car who frequents this forum. Let us know if you do.

FYI, you can get a used Nissan Leaf for about $5000, and its a great car for local driving only, and charged overnight with a standard 110V.

Mr. Money Muschach loved his: https://www.mrmoneymustache.com/the-nissan-leaf-experiment/.

and this usually brilliant MMM article: https://www.mrmoneymustache.com/2016/10/04/so-i-bought-an-electric-car/

Excerpt: 
MM wrote: Over 99% of new cars sold in the US are still gas-powered, and when I run the numbers as an engineer and car enthusiast, I find this to be preposterous. Logically, this should already be less than 50%, and by the end of this decade, it should be zero. The only thing keeping more people from ditching gasoline is that people don’t realize how f...... amazing electric cars are, and I feel I should do my part to share this information. The most effective way to do this is to own one myself and write about the experience.

What an absolutely brilliant article by an enlightened man. Sorry, I got way off-topic. I am so excited that THE MMM is also encouraging this purchase and he alone will convince more people to purchase electric cars. I wonder if Elon Musk reached out to him to be on his marketing team! 

On the big picture of socially responsible investing, there is a growing change in investing, especially the younger generation, with not just the environment but how investors judge the current state of socially responsible investing with many current issues: racial inequality, income inequality, COVID and our health crisis. 

For years, our k12 colleagues are interested in this topic. Both my late hubby and I were definitely interested so we did what we could do. We bought the products, not the stock, and try to practice by reducing our carbon footprint.

 

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10 hours ago, sschullo said:

I don't remember the fund that I was invested years ago. Dropped it when I learned about proper diversification, with an eye out for my risk tolerance and of course low costs and passive strategy.  

As I have stated here before, I practice responsible investing by reducing my consumption of petroleum products by purchasing solar panels and electric cars. Yeah, being the first adapter was expensive but after 12 years the solar panel investment of $33000 was paid off and I save money on reduced maintenance, time and no petroleum products for the electric cars (no gas, no oil and filter changes, no grease jobs, no transmissions, no motor cooling systems and much less time at those awful ripoff dealerships). 

But what I do is not for everybody. Not sure if anybody else has an electric car who frequents this forum. Let us know if you do.

Excluding every company I disagree with or wouldn't support from my investments wouldn't leave many. There's probably not an industry, sector or company I really care for. Warren Buffet talked about the "American tailwind" during his last shareholder meeting and Bogle would talk about buying the US market in nationalistic ways. I'd like to feel like my money in VTSAX goes toward supporting the home team somehow, but trickle down economics has been largely disproved.

https://www.bloomberg.com/news/articles/2020-07-22/all-that-dumb-index-money-may-be-creating-worse-run-companies (that's a fun recent article)

Our investment portfolio certainly doesn't reflect our values. They are more aligned with our financial goals by taking advantage of capitalism(which is basically taking advantage of people.) I have colleagues who haven't utilized the 403b/457 program at our district because finding ESG funds that align with their views is so difficult. Investing requires some cognitive dissonance.

If you've been diggin' MMM I would highly suggest reading "Small Is Beautiful" by E.F. Schumacher and "Buddhist Economics" by Clair Brown:
https://en.wikipedia.org/wiki/Small_Is_Beautiful
https://en.wikipedia.org/wiki/Buddhist_economics
The topics of money, environment and ethics get really interesting when put together. I also started reading "The Value of Nothing" by Raj Patel, but haven't finished it yet.

https://en.wikipedia.org/wiki/BerkShares (local currency - cool initiative from Schumacher)

Being in tech and seeing the amount of trash it generates has really made me not wild about electric vehicles. If people begin replacing cars like they do cell phones, we're in trouble. There have already been stories on Tesla owners who's cars have gone out of warranty and are no longer receiving support: https://youtu.be/tI1Ord5GsQI

I still have two mid-1980's Toyotas, but both have their batteries disconnected as 99% of my commuting lately has been by bicycle. Gas < Electric < Human Power (not soylent green)

Reducing consumption is great.

 

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1 hour ago, ScottO said:

Excluding every company I disagree with or wouldn't support from my investments wouldn't leave many. There's probably not an industry, sector or company I really care for. Warren Buffet talked about the "American tailwind" during his last shareholder meeting and Bogle would talk about buying the US market in nationalistic ways. I'd like to feel like my money in VTSAX goes toward supporting the home team somehow, but trickle down economics has been largely disproved.

https://www.bloomberg.com/news/articles/2020-07-22/all-that-dumb-index-money-may-be-creating-worse-run-companies (that's a fun recent article)

Our investment portfolio certainly doesn't reflect our values. They are more aligned with our financial goals by taking advantage of capitalism(which is basically taking advantage of people.) I have colleagues who haven't utilized the 403b/457 program at our district because finding ESG funds that align with their views is so difficult. Investing requires some cognitive dissonance.

If you've been diggin' MMM I would highly suggest reading "Small Is Beautiful" by E.F. Schumacher and "Buddhist Economics" by Clair Brown:
https://en.wikipedia.org/wiki/Small_Is_Beautiful
https://en.wikipedia.org/wiki/Buddhist_economics
The topics of money, environment and ethics get really interesting when put together. I also started reading "The Value of Nothing" by Raj Patel, but haven't finished it yet.

https://en.wikipedia.org/wiki/BerkShares (local currency - cool initiative from Schumacher)

Being in tech and seeing the amount of trash it generates has really made me not wild about electric vehicles. If people begin replacing cars like they do cell phones, we're in trouble. There have already been stories on Tesla owners who's cars have gone out of warranty and are no longer receiving support: https://youtu.be/tI1Ord5GsQI

I still have two mid-1980's Toyotas, but both have their batteries disconnected as 99% of my commuting lately has been by bicycle. Gas < Electric < Human Power (not soylent green)

Reducing consumption is great.

 

My Tesla is out of warranty and I still get support.

There are plenty of anti-Tesla people out there. I have heard it all. It started with 8 years and now it increased to 20 years according to some loud-mouthed jerk at a Tesla charging station (of all places!) when he said the same old crap. Not heard what a Mercedez production does to the environment, and then you have to put in gas and oil for years!  

Everybody is right and everybody is wrong. There is no good answer to the problem of reducing our carbon footprint. Electric is one way. BTW I have not heard of much negativity of solar panels but I am sure their opponents are everywhere. 

Thanks for the Small is Beautiful book. His essay Buddhist Economics reads like a sociologist: long-winded! LOLs. 

Yeah, my portfolio has all the companies good, bad, and indifferent. 

BTW I read a very interesting piece on the connection of Buddhist practice and passive investing on some blog years ago, and unfortunately, I cannot find it! 

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