"Without policies such as regulations or taxes on very polluting investments, it's unlikely that wealthy individuals making a lot of money from fossil fuel investments will stop investing in them," says one economist.
And you think when a company release good earnings numbers that the stock is going to stay low because a couple of people sold in the name of the earth? If there is even a minor impact for a major company it will be seen that it’s undervalued and that stock will get brought right back up.
And when we’re talking about index funds, no one is even going to notice anything. The stock influences the index, not the other way around. You’re not going to sell so many shares of the S&P that you tank the market. It’s way too liquid for that.
There are videos out there of both Steve Jobs and Jeff Bezos being questioned about their undervalued stock from long ago. Both of them said it didn’t matter, because they knew the business was solid. And if getting a loan, investors will be looking at the health of the business and the ability to pay back the loan and to make a profit, not just looking at the stock price. Giving a bunch of money to a failing company with an overvalued hyped up stock isn’t a good idea. If the investors are getting a share of the company, they would actually prefer the stock be undervalued, as that means their investment has some built in insurance and more room to grow. A company is projected to grow to $100B with a new investment, would you rather invest at a valuation of $20B or $75B. You’re saying $75B, but the answer is $20B.
This is about collective action, not just one or two people. You seem to be leaning heavily into the same excuses everyone uses when they don’t want to do the right thing if it’s even a small inconvenience. “Why should I do X when there’s a bunch of other people doing Y? It’ll never make a difference.”
would you rather invest at a valuation of $20B or $75B. You’re saying $75B, but the answer is $20B.
I’ve got no idea where you went overboard here, but what I’m saying is, if the company in question is doing significant harm to the planet, don’t invest. Not sure why you thought I meant invest later.
And if the moral argument against profiting from harmful industries isn’t good enough for you, financially you’re introducing risk to your portfolio by choosing to invest in companies that are at high risk of running into regulatory challenges and lawsuits globally.
I don’t think anyone should be investing their retirement account with single stocks, which makes almost all of this a moot point imo, but people seem to want to throw broad market index funds away because they contain 1 stock they don’t like.
That’s going to hurt a lot of people taking that advice, as picking stocks just based on morals is probably going to net them a horrible result. Even people trying to pick stocks based on financials of the companies usually have terrible results, or at least not as good as the index fund over the long haul. The exceptions to this rule are unicorns.
If institutional investors want to divest from fossil fuels, cool. They can band together to make massive impacts, as they drive the market. And if it has enough impact, those stocks may end up getting removed from the index funds at some point, cool… but the average person just trying to figure out where to stick their 15% for retirement, or us the company match, should not be heading down this road. They’re just going to screw themselves 99.9999% of the time.
Boy you sure are acting incredibly dense. You’re acting like I’m implying normal investing guidance doesn’t apply. Please stop making up worst case scenarios to try and justify supporting climate damage. I’m not saying dump all your money into a single solar stock somewhere.
There’s literally hundreds of ETFs & mutual funds focused on avoiding the major polluting businesses. For example, just look at things like SPYX instead of SPY, etc. (Adding an extra bit to emphasize I’m using this as an example, not telling everyone to only invest in SPYX, because I can already see your response coming in laser focused on that one example). There’s countless options, do some homework if you’re investing, as you should be doing regardless of whether or not you care about the climate.
The one that’s currently hardest is target date retirement funds which many use for their 401k. Not because there aren’t enough options, but because many fund managers don’t include those options in their offerings. Your hands may be tied but at least you looked. Contact your fund manager and let them know you’re interested in ESG investing.
I’m not saying dump your money down the drain, but check if your investments can be moved somewhere less harmful.
I think we need to keep in mind that as the options for 401k investing increase, program participation drops. So in many cases it can become a question of having a retirement fund or having nothing at all. As you increase the perceived barrier to entry for people, they get overwhelmed and quit, or more likely, never start. A majority of people aren’t great investors, they’re not even good investors, and they have no interest in learning the normal guidance. That’s why target date funds are so popular in the first place. Planning to retire in 2050, great, pick the 2050 fund, done. Too many people don’t even get that far.
And you think when a company release good earnings numbers that the stock is going to stay low because a couple of people sold in the name of the earth? If there is even a minor impact for a major company it will be seen that it’s undervalued and that stock will get brought right back up.
And when we’re talking about index funds, no one is even going to notice anything. The stock influences the index, not the other way around. You’re not going to sell so many shares of the S&P that you tank the market. It’s way too liquid for that.
There are videos out there of both Steve Jobs and Jeff Bezos being questioned about their undervalued stock from long ago. Both of them said it didn’t matter, because they knew the business was solid. And if getting a loan, investors will be looking at the health of the business and the ability to pay back the loan and to make a profit, not just looking at the stock price. Giving a bunch of money to a failing company with an overvalued hyped up stock isn’t a good idea. If the investors are getting a share of the company, they would actually prefer the stock be undervalued, as that means their investment has some built in insurance and more room to grow. A company is projected to grow to $100B with a new investment, would you rather invest at a valuation of $20B or $75B. You’re saying $75B, but the answer is $20B.
This is about collective action, not just one or two people. You seem to be leaning heavily into the same excuses everyone uses when they don’t want to do the right thing if it’s even a small inconvenience. “Why should I do X when there’s a bunch of other people doing Y? It’ll never make a difference.”
Sure, in a vacuum, you selling your stock in BP won’t make a difference, but alternatively in a world where asset managers collections holding over $8 trillion in assets have pledged to divest from fossil fuels, the pool of people willing and able to buy up those shares is shrinking, and the more people who act the smaller the pool gets.
On this note:
I’ve got no idea where you went overboard here, but what I’m saying is, if the company in question is doing significant harm to the planet, don’t invest. Not sure why you thought I meant invest later.
And if the moral argument against profiting from harmful industries isn’t good enough for you, financially you’re introducing risk to your portfolio by choosing to invest in companies that are at high risk of running into regulatory challenges and lawsuits globally.
I don’t think anyone should be investing their retirement account with single stocks, which makes almost all of this a moot point imo, but people seem to want to throw broad market index funds away because they contain 1 stock they don’t like.
That’s going to hurt a lot of people taking that advice, as picking stocks just based on morals is probably going to net them a horrible result. Even people trying to pick stocks based on financials of the companies usually have terrible results, or at least not as good as the index fund over the long haul. The exceptions to this rule are unicorns.
If institutional investors want to divest from fossil fuels, cool. They can band together to make massive impacts, as they drive the market. And if it has enough impact, those stocks may end up getting removed from the index funds at some point, cool… but the average person just trying to figure out where to stick their 15% for retirement, or us the company match, should not be heading down this road. They’re just going to screw themselves 99.9999% of the time.
Boy you sure are acting incredibly dense. You’re acting like I’m implying normal investing guidance doesn’t apply. Please stop making up worst case scenarios to try and justify supporting climate damage. I’m not saying dump all your money into a single solar stock somewhere.
There’s literally hundreds of ETFs & mutual funds focused on avoiding the major polluting businesses. For example, just look at things like SPYX instead of SPY, etc. (Adding an extra bit to emphasize I’m using this as an example, not telling everyone to only invest in SPYX, because I can already see your response coming in laser focused on that one example). There’s countless options, do some homework if you’re investing, as you should be doing regardless of whether or not you care about the climate.
The one that’s currently hardest is target date retirement funds which many use for their 401k. Not because there aren’t enough options, but because many fund managers don’t include those options in their offerings. Your hands may be tied but at least you looked. Contact your fund manager and let them know you’re interested in ESG investing.
I’m not saying dump your money down the drain, but check if your investments can be moved somewhere less harmful.
I think we need to keep in mind that as the options for 401k investing increase, program participation drops. So in many cases it can become a question of having a retirement fund or having nothing at all. As you increase the perceived barrier to entry for people, they get overwhelmed and quit, or more likely, never start. A majority of people aren’t great investors, they’re not even good investors, and they have no interest in learning the normal guidance. That’s why target date funds are so popular in the first place. Planning to retire in 2050, great, pick the 2050 fund, done. Too many people don’t even get that far.