It’s hard to believe that it’s been a month since Newtown. Like everybody else, I was horrified when that terrible tragedy emerged back in December. As a mother, I’ve always worried about life’s sudden turns like childhood diseases or trips to the Emergency Room when somebody got hurt. I was one who always worried about unbuckled seat belts, report cards, and made sure that my son always wore a helmet while skateboarding. And when they got older, I always kept a close eye on who they were dating because you never stop being a parent.
For me, the image that I can’t seem to shake is the frantic mother who came to the home of the retired psychologist who lived next-door to Sandy Hook Elementary. She banged on the door in the desperate hope that her missing child was still among the living, perhaps one of the classmates who sought refuge there. However, when she received the news that her child was not to be found, he said that watching the last shred of hope disappear from this woman’s face was almost too much for anybody to bear. When he recounted the story on television, he was inconsolable.
We’re having a national conversation now about Newtown as we all try come to terms with what happened. Some of the comments have been predictable while other have been equally surprising. I can only hope we find common ground where responsibility and accountability are at the forefront.
However, another question has emerged too. I did not want to address it until some time had passed out of respect for those who are hurting in the most profound way.
I got a call from a friend of mine after Newtown and she despaired because one of her stock funds had a company that owned a weapons manufacturer. She wanted my thoughts on what to do. I told her that the simple truth was to align her values with her portfolio because she had to balance what is in her heart versus what is on her monthly statement. Historically, gun makers were strong defensive performers during economic downturns and having just lived through The Great Recession, their strength is no secret to any fund manager.
The sad truth is that most people don’t look beyond the top-line numbers to see what is driving their portfolio. There is a high chance that you are investing in something you might find objectionable. To be fair, fund managers are under pressure too. They have to create opportunities with a diverse financial complexion that will attract investors for the long term.
However, what took place in Newtown has raised some larger questions. Some feel that gun manufacturers have not adopted a responsible approach like other American industries and remain part of the problem. With that in mind, some investors have chosen to look beyond their strong returns to invest their money elsewhere.
Embarrassingly enough, there are teacher pension funds that have healthy investments with gun makers but some have been pressured to divest. Public employee pension funds are powerful voices with the investment community. During the 1980s, many pension fund managers were pressured by the members to divest from South Africa holdings because of the practice of apartheid. Change happened. Nelson Mandela went from a prisoner on Robbins Island to become one of the most admired people in the world. So if you are not pleased with the choices made by your pension fund manager, raise some hell. He or she will listen.
Now might also be a good time to look at what makes up your investment complexion so that we can sleep better at night. We can all rationalize our investment choices, but in the end, we are responsible for how we invest. We might want to do some careful research to make sure that our investment choices are aligned with our beliefs.
In the end, what makes up our own personal bottom line says more about us than anything found on any financial statement.
Today’s question: Tell me about a time when you had to wrestle with a profitable investment choice that clashed with your values. What did you do? Email me here.