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What’s In Your Portfolio?

What’s in Your Portfolio?

Do you remember the Capital One ads on TV, “What’s in your wallet?” I would be happy to never hear that phrase again.

But, as I was thinking about ethical investing this week, I realized I’d like to make a new phrase famous: “What’s in your portfolio?”

Here’s why.

Most of us are invested in public equities, either through our 401k at work, or maybe a personal investing account (IRA, ROTH, etc). And if you’re like the majority of Americans, you’re probably invested in some sort of index fund. Basically, you own a basket of stocks that track a particular index. It makes smart investing sense.

Research has shown that owning a basket of stocks through an index (often referred to as passive investing) can reduce volatility, and actually performs as well (or even better) than trying to choose stocks or investments in an actively managed fund. It’s a smart financial move.

But there’s a downside; when you are investing in an index fund, you own a piece of every company in that index. So the next time you get upset about vaping, or gun manufacturers, or private prisons — you should know, you probably own stock in those companies, which means you own that company.

Now the problem is that these companies often have innocuous-sounding names.

For example, do you know what The Geo Group does or CoreCivic? They both operate private prisons and are contractors for ICE detention centers. It’d be nice if they’d name themselves Villian, Inc. or Evil Prisons Incorporated.

Or how about Sturm Ruger? Seems harmless enough. Nope. They’re the largest weapons manufacturer in the country.

Or how about Altria Group, Inc. (previously known as Phillip Morris, Inc.). Altria is one of the largest shareholders in the vaping behemoth JUUL. Chances are you’re part-owner in all these companies.

So, I’ll ask again: what’s in your portfolio? If you’d like help reviewing your portfolio, and exploring less objectionable options, shoot me an email. I’m happy to chat.