Investing in Oppression

Recently I’ve been rethinking all of my financial investments. Facing potentially long-term unemployment, it is important for me to make good decisions about imagethe current savings I have. More important, however, is scrutinizing the companies and countries that I currently support with my investments. Many of you know I made a big bet on China in late 2008 when the markets crashed. It has paid off well, returning something like 90% in 18 months.  This has been weighing on my conscious however – and is now at the forefront for me in Dharamsala.

Each day I spend 2 to 3 hours in English conversation classes with exiled Tibetans. I’ve heard story after story of tragedy, suffering and pain. Many of these Tibetans left everything behind for a chance at a better life or to escape persecution. Yesterday my friend Lobsang explained to me how during an attempt to enter back into Tibet (also illegal because if proves you left illegally), two of his friends were captured by Chinese soldiers, imprisoned and tortured for 2.5 years, just recently being released. He hid in a tree for 2 days and then walked for almost 3 weeks before he found refuge in Nepal. A monk told me his story of how in an effort to defend the leader of a protest, he was arrested and tortured daily for almost 4 years. The conditions he experienced in prison are so horrifying that I am not going to repeat them here. These stories are all too commonplace. Clearly, supporting a country with such a poor human rights record (which extends much beyond Tibet), disregard for the environment and democratic repression is creating negative karma and subtly supporting such practices. The governments of the world are no longer willing to stand up to China. Taking a few thousand dollars out of the country is not going to be noticed by anyone – but imagine if I convinced another 100 people to take $100,000 out of China?

But I digress – Cultural genocide in Tibet by the Chinese deserves its own post. Let me return to the topic of investing. What I’m really looking for is advice. How do others justify where they put their money? This is a very complex issue. Investing in specific companies is often a risky endeavor for a small time investor without the time or resources to do adequate research. Maybe the better option is to invest in Socially Responsible Mutual Funds?  That sounds great, until you look under the covers a bit. For example, I was excited to see that in my 401k account, IBM added the option to invest in Vanguards FTSE Social Index Fund, a fund that is self-described as a “Social investing” fund; invests primarily in larger U.S. companies independently screened to meet stringent social and environmental criteria.  Sounds great? Well dig into the prospectus and you’ll see companies like Bank of America in the funds top 10 holdings. While I’m sure that Bank of America gives a lot of money to charity and doesn’t pollute the environment, what about its recent record in the financial markets? Billion dollar bonuses to executives and denial of mortgage rewrites for those facing foreclosure?  While I would still prefer this fund over a general US fund that may invest in a corporation like Blackwater or ExxonMobil, it shows there is a long way to go in defining SRI criteria. Two websites that that I found are below:

http://www.socialinvest.org

http://www.socialfunds.com/

However they are limited in scope, and show that the market is not yet interested in SRI. I am back to the drawing board – clearly I don’t want to exit the market, losing potential return. Yet, how do I ensure my investments are aligned with my values?

And on a side note, many of you will say, “Well, I don’t have a lot of money, so this doesn’t pertain to me” . I will argue that this pertains to everyone. Whether you earn $10,000 a year or image$1,000,000, you still have choices on where and how you spend your money. Our political and economic systems are intricately tied together and the option of Voting with Your Dollar is one of your greatest democratic rights (and I would argue that it is also one of your greatest responsibilities).  Yes, you might pay a little more for a few items, but if truly consider the impact that you making, this will not be a difficult decision.

Looking forward to the discussion.

One thought on “Investing in Oppression

  1. Follow-up:

    I divested from China yesterday. I invested in some general international funds such as

    DFA Emerging Markets I (DFEMX)

    But using http://www.socialinvest.org/ and several other research tools I included four SRI (Socially Responsible Investing) mutual funds:

    Appleseed (APPLX)
    Winslow Green Growth Inv (WGGFX)
    Pax World Global Green Individual Inv (PGRNX)
    Vanguard FTSE Social Index Inv (VFTSX)

    Good luck!

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