December 7, 2018

Stocks and morals - how do they get along?

Towards the end of the year, people often become quiet and thoughtful. They wonder if what they did was right. This also applies to their investments, not only in an economic sense, but also in a moral sense: have I invested in a way that is contrary to my moral and ethical beliefs?

Such thoughts are not an obstacle when investing. They are in fact the main reason why Obermatt CEO Dr. Hermann J. Stern doesn't invest his money in ETFs (Exchange Traded Funds), but rather wants to know who did what with his money. That's why created the focus markets: They only contain stocks that correspond to a certain focus, such as climate protection.

But one can - and should - think even further. Money is earned not only with beautiful smartphones and sleek electric cars, but also with weapons, adult entertainment, tobacco, alcohol, and gambling. As an investor you can chose to avoid such industries. Those who leave their investing to an advisor, must be aware that some of these morally questionable stocks might end up in their portfolio.

Investing in some of these industries bothers some people more than others. Dr. Stern personally has a positive attitude towards the defense industry, because he believes that basic human rights need to be defended. That's why he has BAE Systems in his portfolio. And he invested in the Swedish Match, because it manufactures products that satisfy the desire to smoke, but without the smoke.

When he invests, he thinks about what his personal moral and ethical beliefs allow. He avoids stocks from companies that are proven harmful to our climate. But he buys those from Carlsberg. Why? Because he likes beer. Even if there are countless people who have an alcohol problem. Dr. Stern cannot solve their problem by not buying shares in a company that produces alcoholic beverages.

Morality is a personal matter. Even when investing. Decisions are made easier by looking at the Focus Markets as well as the personal top 10 lists that premium subscribers to the newsletter can create. If you don't want to buy weapons, just ignore the weapons industry list on the Obermatt stock lists. And if you want to know which company develops technologies that might defend your values, take a closer look.

We buy the stocks we discuss and openly publish the returns of our portfolio. That's how much we believe in our stock research. Subscribe to the top 10 stocks for 100 markets conveniently by e-mail.

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