Monday, July 05, 1999


Investments can follow one's values

        Question: I have recently been introduced to the term natural investing. Can you explain to me what it is and how it works?

        Answer: Barbara Culver, a certified financial planner and expert on values-based planning at Resonate Inc. in Blue Ash, says a “natural investor” is a person who incorporates their values when making financial decisions. It represents a path in the investment decision-making process that links an individual's personality with what they do with their money.

        Values are brought into the investment marketplace in four ways. The first is called avoid ance screening, which is a well-known approach of choosing to not invest in industries by which you do not wish to profit. Common industries that get excluded using this process are tobacco, alcohol and those related to defense.

        A complement to that method is called affirmative screening, in which one seeks out investments in which he or she wants to be involved. The affirmative screening process results in choices being made to look for companies that may be environmentally responsible or offer good working conditions to employees.

        Community investing is the third spoke. It supports grass-roots programs and provides financing needed by hardworking individuals and organizations to help them succeed.

        The final dimension is shareholder activism, which works to change companies from the inside — either as investors or employees.

        It used to be that there were very limited choices for the natural investor. In the past 15 years, that has changed dramatically. In addition to individual company selection, there are numerous mutual fund families that offer these socially responsible choices. Investors can now find virtually every asset class represented in a values-based portfolio.

        By integrating personal ethics and social goals into their investments, natural investors maintain a consistency with their life purpose and make a difference while making money.

        — Compiled by Amy Higgins

        Readers should consider the advice from the Money Panel as general information only. Investors should seek the help of professionals on questions regarding their own portfolios because circumstances might vary.


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