Persistence VI – Belief in Strategy


One of the most important elements of persistence is belief in a strategy.   This is why one rule of investing we stress is invest in what you like and know.

We do not have to give up good performance by sticking to our beliefs.

For example, socially responsible investing makes sense.   This is good long term thinking.  Numerous actively managed funds have good intentions and have performed well.

There are numerous ways that fund managers screen the investments they will invest in.  Some filter out companies involved in alcohol, tobacco, gaming and weapons.  Other funds invest in self sustaining products. Here are three examples.

ethical ETF

See the current Portfolio 21 charts at www.finance.yahoo.com here

Portfolio 21 (symbol PORTX) looks for opportunities to invest in companies that develop ecologically safe products using renewable energy except nuclear power or efficient manufacturing processes and does not invest in companies normally filtered out from socially responsible funds. This fund has an expense ration of 1.42%.

The Appleseed Fund (symbol APPLX) has an even lower expense ratio of 1.24%

ethical ETF
See the current Appleseed chart at www.finance.yahoo.com here

Appleseed does not invest in companies that generate revenue from alcohol, gambling, pornography, tobacco or weapons. They look for good value investments in good companies that have had a short term problem.   The fund managers also look for good price to earnings ratios.   Regretfully they have a big holding in Coca-Cola, which I think is one of the worst chemical companies in the world.   However many readers would not agree.  To each his or her own.

The Parnassus Equity Income (symbol PRBLX) has a really low expense ratio of 0.87%.

The manager of this fund looks indepth at companies it invests in to weed out heavy polluters and business involved in alcohol, gaming, tobacco and weapons.  Over five years this fund’s performance is in the top 1% of funds that invests in large cap shares.

ethical ETF

See the current Parnassus chart at www.finance.yahoo.com here.

The fund has a concentrated portfolio (less than 50 stocks) and a majority of the  holdings pay dividends.

A key to persistence is belief.   Let’s all examine our own beliefs carefully.  Decide what is really important and become persistent in standing up for these beliefs in the way we do business, invest and live.

See Persistence VII

Gary