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  • Feb
  • 21

Conflicts of Consistency: Cruelty-Free Investing

Posted by at 5:41 AM | Permalink | 1 Comment

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This post is part of an occasional series exploring questions of consistency and other moral dilemmas facing vegans and animal rights advocates.

Trying to put your money where your morals are through cruelty-free investing is a tough act indeed. It may seem that just about every investment option—from stocks to bonds to cash in the bank—is connected to cruelty to animals.

With investing, there are two broad approaches to creating a personal portfolio: active (direct) vs. passive (indirect). The active way is to purchase individual stocks and bonds. While this method gives you full control over what you own, it has serious drawbacks: It requires research and often involves potentially higher costs and a lack of diversity. The passive way is through mutual funds, in which you trade off control for diversity. For the avid investor, it’s possible to do a combination of both.

Whatever the method, there is almost no easy way to have a cruelty-free investment portfolio. It would seem like a fairly simple task to find enough companies that are both good investments and not involved with anything related to animals. But alas, the connection to some form of animal exploitation is just about everywhere.

It’s not as simple as avoiding McDonald’s stock. For example, there’s the current Wall Street superstar stock, Apple. And what is sold at Apple Stores? Leather cases for some of its products! Or take the example of putting all your money in U.S. Treasury bonds. Those bonds help support the U.S. Department of Agriculture, meat-filled school lunches, and animal testing! OK, so you want to give up and stash your cash in the bank. Not so fast. The bank may very well be loaning your vegan savings to a dairy farmer or local fast-food burger franchisee.

Even though there are some “socially responsible” mutual funds, none of these funds at the present time have cruelty-free investing as one of their criteria. Also, for many of us, our investment choices are already limited to the mutual funds offered by our employers’ retirement plans.

For direct investment choices, it’s probably best to avoid the most offensive companies—the ones with animal blood (sometimes literally) on their hands. But even with these culprits, owning stock entitles you (or PETA on your behalf) to present shareholder resolutions at the company’s annual meeting. These shareholder resolutions have helped create major changes for animals in some well-known animal-abusing industries.

For indirect investments, consider Warren Buffett’s suggestion for the average investor: a low-cost, broad-based, stock index mutual fund. You get exposure to the entire stock market (the good, the bad, and the ugly) at rock-bottom cost, and you’re guaranteed to match the market’s performance (something most professionals fail to do over any extended time period).

There’s no easy solution for cruelty-free investing—and especially so for indirect investing. It’s more a matter of choosing the lesser evil and accepting that we can’t directly control our indirect investments any more than we can directly control how our tax dollars are used. Instead, we can focus on what we can control: our own vegan lifestyle, educating others, funding animal advocacy organizations such as PETA, and being advocates for animals.

What are your thoughts on cruelty-free investing?

For another perspective on cruelty-free investing, read this post by Steve Martindale.

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  • Steve says:

    There are some money managers who do include animal issues in their screens, though these often require a minimum investment of $100,000. Similarly, many large investment firms have “managed accounts,” sort of like private mutual funds. The investor owns specific stocks, which are bought and sold by a portfolio manager at the firm. These managers will avoid any stocks the investor specifies—like specific companies such as McDonald’s or broad industry groups such as pharmaceuticals—though, again, the minimum investment is typically $100,000.

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