I was looking at an article last week about great opportunities in municipal bonds that are tied to revenue from cigarettes. I wondered about how many people would stay away from those bonds because it would go against their personal values. It occurred to me that I’ve never addressed the issue of personal values as they relate to investing in an investment tip.
It’s something every investor should do, know where your limits are, what you won’t invest in. Think you don’t have any limits? Would you invest in Friend Finder Networks that run a bunch of online porn websites? Think about this one carefully. It’s a more complex issue than it seems. You might hold your nose and invest (for example) in a company that sells tobacco. But will you stick with it if things get bad? Will you treat it the same as a company that sells software? Or would you bail out if things turn lower to essentially punish yourself for making a bargain with the devil. If that’s the case, you should stand aside in the first place.
Think about it. And then do your homework. Know what stocks are in your mutual funds. Be clear with your advisor or broker about what kinds of investments are acceptable and which ones aren’t (this is something I discuss with every client). Your personal values do matter in investing. Be clear about what yours are.