(03) 9020 2905HIPPY alert! Sound the warning sirens! Whooop! Whooop! Whooop!
Be careful when inviting hippies into your investment world. You might get a little more than “peace”, “free love” and a sitar being gently played by Ravi Shankar, if you know what I mean.
Janis Joplin, Cheech & Chong and Timothy Leary are all are highly talented hippies, particularly under the influence of various narcotics, but would you have trusted them for investment advice? Disastrous!
But seriously, ethical is just an investment “filter”. And virtually everyone uses some sort of a sieve when they invest.
Your filter might be a shade of green, social change, for high-yielding investments, growth, gearing or investments in companies you truly understand.
While I largely use index funds, when I am choosing direct investments, I have a bias towards top 100 companies, and those that pay consistent dividends. That cuts out an enormous number of true growth stocks.
Ethical and socially responsible investing has as many shades of green as hippy vegetarians, who have many shades of eating purity.
If you’d like help with “ethical” direction with your investments, check out www.responsibleinvestment.org, for some of the basics.
Potentially, it can lead to greater returns, as well as giving you warm fuzzies. Remember that any time you cut out potential investments from the investment pool, it will impact on your returns, either up or down.
But please don’t take any philosophical or investment advice from Neil Pye, that dastardly boring hippy from The Young Ones. The demand side dynamic of farming for mung beans and lentils is probably limited.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.