posted on February 27th 2015 in Your Financial Advisor with 0 Comments /


In the old days, not so long ago, investors had to decide if it was worth it to them to sacrifice returns by supporting socially responsible companies instead of “sin” companies that produced a more robust bottom line. Looking at it simply from an investment perspective, some studies found that excluding sin companies resulted in a performance drop of more than 2%. In addition, that practice significantly reduced our ability to diversify portfolios.

Since our goal is to provide investors with the highest returns, and we believe diversification is a key to ensuring that occurs, we weren’t really comfortable recommending the socially responsible investment strategies available to us. They just didn’t support our investment philosophy.

Today, that has changed with the advent of new funds that basically allow investors who wish to be socially responsible to have their cake and eat it, too. We can now present these folks with globally diverse portfolios that are efficient, low-cost and effective at employing screens that weed out sin companies in favor of those that are more “saintly.”

These well-engineered funds use screens to identify companies with spotty social or behavioral records (e.g., unfair labor practices) and little interest in the environment (e.g., polluters), as well as those involved in business activities like gambling, tobacco, alcohol, pornography, producing landmines and other weapons, and conducting business with regimes such as the Republic of Sudan. It’s also possible to employ just a “green screen,” which eliminates companies that don’t use environmentally friendly practices.

We’re delighted that we can better respond to the needs of socially responsible investors—facilitating their ability to bypass sin companies without having to sacrifice as much in the areas of returns and portfolio design. These investors are willing to put their money where their mouth is, and that’s something worth celebrating.

about the author: WorthPointe Wealth Management

Continue Reading

Other articles filed under Your Financial Advisor

Meet Our Advisors

November 29, 2018 - We love sharing the stories of how our advisors found WorthPointe to be the perfect fit for their lifestyles and professional goals. It brings us joy to help them find their niche and serve our clients even better. Here are...
Continue Reading

Protect Your Assets And Your Free Time

March 27, 2018 - Time is Money. Time is at a premium these days, and with work following us on our phones, it can be hard to draw a boundary and embrace quality time outside of the office. If you’re like many dedicated entrepreneurs,...
Continue Reading

Should You Consider Investing Your Home Equity?

February 19, 2018 - In our decades of experience, we've found that this strategy may not be appropriate for everyone. For some, it has caused more harm than good. For others, it has been beneficial. We, however, wanted write on the topic, because it is...
Continue Reading

Stock Market Plunge: What’s Going On?

February 6, 2018 - By now, you have probably seen the news that the stock market is taking a dip. There is a lot of information coming at us fast as we watch to see what happens next. We are here to answer a...
Continue Reading

Five Key Concepts for Financial Success

December 13, 2017 - The following blog post is an excerpt of the WorthPointe e-book, The Informed Investor. We created The Informed Investor to show you a Nobel Prize–winning approach crafted to optimize your investment portfolio over time. We have designed it specifically to...
Continue Reading

Return to Blog Home