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PAGE 12 T Q-Notes T AprU 17, 1999 money matters Sociaily- responsible investing by J. Lynn Davidson Special to Q-Notes It’s not unusual for a gay or lesbian investor to wonder whether hard-earned dollars are be ing invested in companies that support or op pose the struggle for equal rights. The issue hits home when a prominent national firm in which they invest makes news by doing something either helpful (e.g. granting domestic partner benefits) or harmful (e.g. firing a gay employee) to the cause. In the broader scheme, this issue is referred to as socially-responsible investing, and it’s something most lesbians and gay men think about during the financial planning pro cess. What is socially-responsible investing? Broadly speaking, socially-responsible investing requires eliminating from a portfolio the secu rities of any company whose goods or services are considered harmful to society, whose work practices are unfair to its labor force, or whose production processes denigrate the environ ment. ‘ If you think about how to apply these crite ria — or “screens” in the parlance of socially- responsible investing — it becomes apparent that the concept actually may mean different things to different investors. For some, avoid ing investments in companies that promote nuclear technologies or genetic engineering may be of para- mount concern; for others, it may be avoid ing investments that further society’s depen dence on chemicals such as tobacco or al cohol. Within the lesbian and gay community, the issue tends to center on a company’s treatment of its gay employees and customers. For some people, sat isfying the broadest possible array of social screens is required. Most investors tend to fall into one of three categories when it comes to socially-responsible investing. It is a prime factor in investment decisions. For a small minority, it is simply unconscio nable — and therefore not possible — to in vest money in an enterprise that isn’t socially- responsible. The issue is irrelevant. For a slighdy larger group, investments are for making money, no more and no less. The muddled middle is a large group of in vestors who don’t quite understand the concept of socially-resjjonsible investing or how diffi cult it can be to apply. They do know that they want to do the right thing and meet their fi nancial planning goals. Socially-responsible investing requires eliminating the securities of any company whose goods or services are considered harmful to society whose work practices are unfair to its labor force, or whose production processes denigrate the environment The basic rules still apply. For the majority of investors, including the majority of lesbian and gay investors, the challenge of socially-re sponsible investing is to find a happy medium. This isn’t always as easy as it sounds, though; especially if you invest through mutual funds. It’s hard to monitor the social responsibility of the companies you invest in. There are a few things you can do, though, to reach that middle ground. Keep your perspective — remember that the basic rules of investment planning don’t change when you decide to add some socially-respon- NOW MORE DIGITAL MINUTES THAN EVER! 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That sentence is loaded with important words; it’s worth reading again. Social screen ing should not ;hange the way you approach the investment process. Remember, too, that even with socially-responsible investments, ' you’re not a matket- time, you’re in this for the long-haul, until you reach your financial goals. There can be no room for hot tips or quick in-and-outs in your investing strat- Don’t let the so cial tail wag the investment dog. You’re invest ments need to be sound first and socially-re sponsible second. If an investment wouldn’t make it into your portfolio without its socially- responsible pedigree, it has no business being in there just because it meets your social screens. Said another way, one good approach to so cially-responsible investing is, where possible, use it to choose among otherwise acceptable investment alternatives, but make sure it meets your investment criteria before you buy. Get advice. Even in the information age, it can be hatd to keep track of how companies perform on social issues. In the case of gay rights, national organizations sometimes track the actions of large companies. A handful of investment advisors in a few large cities man age portfolios that concentrate on social screens; occasionally, community newspapers report information from them. There are a number of mutual fund companies that use social screens to make their investment decisions and at least one of the screens specifically focuses on gay issues. Again, though, be certain that such an investment meets your broader finan cial goals before deciding whether it belongs in your portfolio. And, most important of all, talk to your financial advisor to help you decide the place for socially-responsible investing in your plan. ▼ [/. 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