By Sean Weaver, Financial Advisor, WWK Wealth Advisors
Picture this scene. It’s just before dinnertime and a husband and wife are standing in the
kitchen going through the day’s mail – there’s the typical variety of junk mail, magazines, bills,
etc. In the pile is also a heavy envelope. Inside is something that resembles the white pages of a
phone book – the kind that most kids today wouldn’t even recognize. The wife pauses from her
sorting and asks, “What are we supposed to do with this?”
Her husband shrugs his shoulders and says, “I don’t know. I guess just throw it in recycling.”
With the task completed, their focus turns to dinner preparation and a discussion of carpool
schedules and their kids’ many extracurricular activities and the prospectus ends up in the
recycle bin and not to be thought of again.
Exciting, But Morally Questionable
Here’s another scenario to consider: Someone approaches you and asks you to be a partner in
an exciting, but morally questionable, business venture. Would you accept immediately, do
some investigating, or flat-out refuse?
If you knew that the company in question was in direct opposition to your values perhaps you
would respond with righteous indignation and say something along the lines of “I would never
invest in a business like that!” With the prospectus in the recycle bin, and no research done the
investor never gains the knowledge to make the informed decision above.
Mutual Funds, ETFs And The Potential Dangers Lurking Inside
The use of mutual funds and ETFs creates an environment in which individual investors are
separated from the idea of ownership. Most investors have taken very little if any, time to learn
about the companies they invest in through their mutual funds and ETFs.
Mutual funds and ETFs are, of course, great tools that allow investors to easily create
diversification within their portfolios. However, with a middleman in place, investors must do
their own investigating and research to better understand where their money is going.
Consider the advent of food labels. It wasn’t long ago that very few people stopped to examine
the ingredients in the food they were consuming. I didn’t care very much about that sort of
thing until I had a daughter. Now I can’t take a sip of milk without thinking about what
hormones might be in it and whether or not the cows are grass fed!
Our moms always told us to drink our milk – strong bones and all that – so it has to be good for
us, right? Before access to nutrition information, we were blind to the potential dangers in the
foods we consumed. Food labeling and consumer education allow people to make better and
more informed choices for themselves and their families.
With that comparison in mind, consider how investors can apply those same principles to their
investment practices. There are several free tools on the market that give investors a better
understanding of their portfolios.
Morningstar.com is the most well known website that will provide an immense amount of
information about the funds they are investing in. There are also sites like eVALUEator.com that
allow investors to do what eVALUEator calls a “moral audit” of their investments. A moral audit
allows investors to see areas where their investments may be in opposition to their personal
values. Information is power. It all comes down to having the ability to make informed choices
about your investments.
Follow The Money
Do you know where your money is going? Perhaps you don’t and all of this seems
overwhelming! Remember that change is a process and one good choice precipitates another.
Any change begins with one step in the right direction.
The first step is knowledge. It’s very difficult to make a change until you’re aware of the facts.
Make it a priority to better understand where you are investing your money.
The second step is to believe. It seems simple, but you must believe there is a need for change
and that change is possible. You may have always done something the same way, but that
doesn’t mean you have to keep on doing it!
The final step is action. Start reading the labels on your mutual funds and ETFs. Do you like
what you see? If not, you will have the knowledge you need to take back control of your
So with that, I will leave you with this question: What’s in your portfolio?
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The return on BRI or moral/faith-based investments may be lower or higher than if the advisor made decisions based solely on investment considerations. Investing involves risk, including possible loss of principal. No strategy assures success or protects against loss. Past performance is no guarantee of future results.
Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc.