What companies in the stock market are the most environmentally responsible?

[CathyA]

DD has a boyfriend who works for an insurance company. He's trying to help us arrange our assets (stocks, CDs, etc.) so that we don't run out of money in our old age. We're both 69 now.
I've always invested most of my IRA money in CDs with a credit union that I love and trust. I also have a couple socially responsible mutual funds.
I know my CDs hardly make anything, but it's hard for me to invest in so many things out there that I don't like and can't support in good conscience.

We really like DD's boyfriend and feel he is very trustworthy, intelligent, and sincere in his wanting to look out for our futures.

He's showing us some plans that will keep money coming in, no matter what the stock market does, but the fee is pretty high, but eventually pays off. It's a guaranteed monthly income, no matter if there are downturns in the market.


What are your favorite socially/environmentally responsible companies?
I'm feeling pretty overwhelmed with all the choices.
Living in the U.S. is so overwhelmingly complicated for me. :(

[iris lilies]

My knee jerk response is that nothng with an “insurance company” is much good as investment. Their fees are super high.

I have decided that annuities, which may be what he is selling, might be ok for DH for PART of his portfolio but in general to put a lot of his/our funds into annuities isnt smart. Since I think I will be dead for a good decade before DH, annuities are NOT for me.

What kind of financial vehicle is this man selling you? Is he commission based? How does he make his money?

there are mutual funds that are ethically screened and sanitized, for those of your mindset. Can this man sell you mutual funds? I will bet not.

This whole thing sounds like a not-good action for most of your money but if you want to throw him a bone, putting SOME of your assets with him might be ok.

As an example, we are in the process of moving $100,000 to a Hermann bank that will pay hardly any interest. I want to pump money into the Hermann economy, that is a social justice idea, it is not a smart investment idea. DH is having trouble with the idea :-) He is Just a GD capitalist!

[Tybee]

Is he selling annuities, Cathy? I would not mix family and money by buying from him--just would not work for me because if something happened to my money, I might resent him for giving me advice that did not work out.

It sounds like you are pretty happy with what you have now, the cds and the socially responsible fund--I am guessing something like Domani? I would go to a fee based financial planner if I wanted to do something else with retirement money, and ask the bigger questions about asset allocation etc. before buying anything from someone selling insurance product. I don't think you are at that point to buy something from him, unless you want to do what IL is saying, something small. But to me 100,000 is huge, so I would not have that to put into something as an aside.

It would have to be a big part of my overall plan.

[razz]

Never mix money investment advice and family!!! I did it against my DH's advice and it was a huge mistake. Dare I repeat - never mix money and family!!!!

High fees are not necessary except to pay high commissions.

Pay a fee-based financial planner for advice and then decide. No one, no one will be more responsible than you are about YOUR money. What you do need is the correct information to make the decisions that are right for you and you don't need to rush your decision once you have the info.

[Rogar]

My days of trying to pick individual stocks are over. I only invest in mutual funds to balance out risk by having a variety of companies. A saying I've used before is that I don't need a home run at this point in the game I just need to get on first. In my case I just want to keep up with inflation and make a little bit on top. I'd just do an internet search for environmentally friendly mutual funds. I like Fidelity for not charging an arm and leg for management fees for their mutual funds. One that popped for me was FSLEX which is an environment and alternative energy mutual fund. I don't own it, it just looked decent and would fit your desires.

And...what IL said makes good sense to me.

[CathyA]

You all have brought up some good points. We need to slow down and take time to think this over, but we are feeling a bit rushed. I love my DD's boyfriend, but he's living in the fast lane, and we are in the slow lane! :)
I'm glad I asked this here. You have brought up great points and I definitely need to think about a lot of other alternatives.

Thanks guys!
I look forward to more replies too. Oh....yes, he was talking about annuities. But he has lots of other ideas too. It's sort of overwhelming, with my little brain.

[Tammy]

I think he should be your daughters boyfriend and not your financial advisor.

[oldhat]

I think the advice here not to mix family and money is wise. And yes, high costs are always a good reason to be suspicious. None of these companies are in business for their health.

If you want financial advice, hire someone disinterested, like a financial advisor you pay by the hour.

[Teacher Terry]

Totally agree with old hat. Nothing good will come from this.

[ToomuchStuff]

Did you approach him, or did he approach you?
Is he a fiduciary?
What is he licensed in/to sell?
What of those is he invested in, how long and how much?

Sounds like the typical person that I have seen who gets into the insurance business. They tend to start to try to sell to everyone they know first. Most think they will be able to get rich quick from commissions.

I have one friend who sells annuities and only personally know of one instance where it made some sense. In the process of cleaning out an estate, some penny stocks were found in a safety deposit box, by a family with no real inheritance or financial understanding. This was near the height of that company, AOL. They knew the money they were going to get from them (around 7 figures), would end up gone or causing a lot of family drama (those who blew it verses those who saved).

On another front, one friend inherited a house, car, and a 900K insurance policy. He did the friend/family investment advice thing and it was gone in a year and he was sued and lost everything he owned except his truck and dog.

[sweetana3]

CathyA, you have gotten good warnings and should beware. Salesmen abound out there whether strangers, family members, or trusted individuals (ministers, doctors, etc.) I saw a lot of the fallout while working at the IRS and it was pretty sad.

If you really want advice, find a fee based (not salesman) qualified financial adviser and never ever invest your hard earned money in something you do not totally understand.

We have a good chunk of our personally managed portfolio in the market but all in low fee index funds. We don't buy and sell. A good chunk is in cash which is my insurance policy. You need good household money management and family financial goals to work on. Beware all the media about easy money or safe money or such. They prey on those who don't understand the instruments being discussed and sold.

[bicyclist]

A truly helpful financial advisor will in the first place, lay out some alternatives a little at a time and give you time to consider them in light of what is the most important of your values. If you feel overwhelmed, join the crowd most people feel the same way! But good advisors are first good listeners and not enamoured of one company or type of investment. As the others have said, insurance companies tend to emphasize annuities. There are other whole investment classes that could still make sense. Some perspective can help. I recommend Bernard Malkiel's book "A Random Walk Down Wall Street" as a well written and not very technical book to read about investments, the best single book I have found. Mr. Malkiel taught at Yale and Princeton but you don't have to be business student to benefit from it. The Vangurd Group has many excellent staff people you can talk to over the phone (I am an investor with Vanguard) who don't have a vested interest in selling you one type of investment. They can be very helpful. Dave

[dado potato]

Retired people who receive a defined benefit pension and social security payments are in effect receiving annuities already.

If the current annuity income from pensions and social security is projected to be inadequate for lifestyle expenses (if there is a projected deficit), I would consider a Single Premium Immediate Annuity for 2 joint lives, 100% continuing to the survivor, with no riders. The amount of the monthly payment would be equal the projected deficit in year one of the SPIA. Quotes from 7 to 15 highly rated (by AM Best) insurance companies would determine which company would require the least premium to obtain the desired monthly income. For Quotes I would probably contact "Stan the Annuity Man" Haithcock.


I would categorically not speak to a family member (or a social acquaintance, or an agent in the yellow pages) about investment strategy.

SPIAs are a "commodity". Commissions of 2-4% are paid to "producers", but the buyer does not see the commission. Commissions are imbedded in the quotes obtained from the insurance companies. Shopping around is usually a good idea, because at any point in time some companies (rated the same "A+" or "A" by AM Best) will be more competitive about pricing. Compare apples to identical apples!


After securing a guaranteed income equal to projected lifestyle expenses with annuities (including pensions and social security), I assume there would likely be other investable funds for people who have been thrifty during their working years. In my opinion a reserve consisting of broadly diversified common stocks in an index-type fund potentially offsets inflation, and is lower-risk and lower-fee than other alternatives that can offset inflation. This equity reserve can be there to absorb a major financial shock (uninsured casualty losses, long-term care expenses, etc.). Income from the equity reserve which is not needed for lifestyle expenses can be reinvested in more shares. When the second to die passes away, the remainder of the equity reserve would be part of his/her estate, and there should be provision in the wills about where the wealth should go then.


I understand that Warren Buffett "the great investor" intends that his widow invest 90% in Vanguard's SP500 Stock Index Fund and 10% in an ultra-short term bond fund. It is significant that Bonds and CDs play no role in the intended portfolio. I believe Buffett expects the average annual total return on equities will be greater than on fixed income securities over the long term. "The Oracle of Omaha" understands statistics!


Significantly greater diversification would be possible in Vanguard's Global (Total World) Stock Index Fund, investing in over 7,000 companies rather than 500 big US-based ones.

Nothing herein is to be construed as investment advice. I am stating my personal opinion only.

[eleighj]

Retired people who receive a defined benefit pension and social security payments are in effect receiving annuities already.

If the current annuity income from pensions and social security is projected to be inadequate for lifestyle expenses (if there is a projected deficit), I would consider a Single Premium Immediate Annuity for 2 joint lives, 100% continuing to the survivor, with no riders. The amount of the monthly payment would be equal the projected deficit in year one of the SPIA. Quotes from 7 to 15 highly rated (by AM Best) insurance companies would determine which company would require the least premium to obtain the desired monthly income. For Quotes I would probably contact "Stan the Annuity Man" Haithcock.


I would categorically not speak to a family member (or a social acquaintance, or an agent in the yellow pages) about investment strategy.

SPIAs are a "commodity". Commissions of 2-4% are paid to "producers", but the buyer does not see the commission. Commissions are imbedded in the quotes obtained from the insurance companies. Shopping around is usually a good idea, because at any point in time some companies (rated the same "A+" or "A" by AM Best) will be more competitive about pricing. Compare apples to identical apples!


After securing a guaranteed income equal to projected lifestyle expenses with annuities (including pensions and social security), I assume there would likely be other investable funds for people who have been thrifty during their working years. In my opinion a reserve consisting of broadly diversified common stocks in an index-type fund potentially offsets inflation, and is lower-risk and lower-fee than other alternatives that can offset inflation. This equity reserve can be there to absorb a major financial shock (uninsured casualty losses, long-term care expenses, etc.). Income from the equity reserve which is not needed for lifestyle expenses can be reinvested in more shares. When the second to die passes away, the remainder of the equity reserve would be part of his/her estate, and there should be provision in the wills about where the wealth should go then.


I understand that Warren Buffett "the great investor" intends that his widow invest 90% in Vanguard's SP500 Stock Index Fund and 10% in an ultra-short term bond fund. It is significant that Bonds and CDs play no role in the intended portfolio. I believe Buffett expects the average annual total return on equities will be greater than on fixed income securities over the long term. "The Oracle of Omaha" understands statistics!


Significantly greater diversification would be possible in Vanguard's Global (Total World) Stock Index Fund, investing in over 7,000 companies rather than 500 big US-based ones.

Nothing herein is to be construed as investment advice. I am stating my personal opinion only.

Dado; very well written. My wife and I interviewed over five "Fee Based Only" advisors until we found one that both of us trust. He provides the advice after discussion between the three of us and we make the changes ourselves. He does not have or wants access to our accounts to make the transactions. If there is something we do not understand or are uncomfortable with; we discuss it and come up with a mutually agreeable plan.

Ed