“Personal Finance: Social-issue funds have their limits - Philadelphia Daily News” plus 1 more |
| Personal Finance: Social-issue funds have their limits - Philadelphia Daily News Posted: 01 Jan 2011 11:59 PM PST Posted on Sun, Jan. 2, 2011 If you'd like to see a world without guns, oil rigs, racial discrimination, abortions, liquor, or tobacco, you can easily find a mutual fund that will cater to your concerns. Just buy one of dozens of so-called socially responsible mutual funds and feel assured that none of your retirement or college savings will go into companies that will make your stomach churn. But what if you are one of the millions of Americans furious at the banks that brought the nation's economy to its knees, or disgusted with companies that slashed their workforces and still have done little to bring back the 17 percent of Americans who are unemployed or underemployed? Then it's slim pickings. Despite the massive screening that socially responsible funds do to avoid investing in companies that abuse the environment or disadvantaged people, most don't pay attention to corporate pink slips. A few mutual funds in the $3.07 trillion business of socially responsible investing come close. For example, the Parnassus Workplace Fund won't invest in companies that don't treat existing employees well. The fund favors investments in companies that offer good health insurance, 401(k) matches, flexible schedules for working mothers, severance pay amid layoffs, and appointments of minorities and women to management and board positions. The fund avoids companies that pay the CEO millions more than their employees. On a related matter, Appleseed has said publicly that it won't invest in the five "too big to fail" banks, such as Citigroup and Goldman Sachs. The fund managers hold the giant Wall Street banks responsible for the wild strategies that caused the worst recession since the Depression. Joshua Strauss, one of the co-fund managers of Appleseed, said that the banks are larger than ever, and that he sees no evidence they won't endanger the economy again and leave taxpayers with the price tag. "They have about $10 trillion in notional value of derivatives on their balance sheets, and Warren Buffett has called derivatives weapons of mass destruction," said Strauss. But fund managers throughout the socially responsible realm say they are not comfortable screening out companies that have slashed workforces. Parnassus screens out companies that make a practice of hiring, laying off, then hiring again, figuring good management should be consistent rather than leaving the workforce on a bungee cord, said Jerome Dodson, president and portfolio manager for Parnassus Investments. But managers want companies to be productive and profitable. "The economy needs businesses to hire again, but, from an individual company standpoint, they are doing the right thing: hoarding cash and working people harder," said Dodson. Even from the standpoint of employees, he said, it makes sense to "wait until the last minute to hire. You don't want them to hire and then be laid off." The challenge before socially responsible funds is to grow investors' money without also compromising values. Some advocates of socially responsible investing, such as Dodson, claim that a happy workforce translates into shareholder value as workers give their all to the company. And a study by University of Pennsylvania Wharton School business professor Alex Edmans supports that. But Henry Mintzberg, a professor of management at McGill University, said socially responsible investors were not going far enough and fail to appreciate that layoffs simply provide the illusion of profitability. "There is too much short-termism in business," he said. "Companies can fire everyone and ship everything from stock" rather than investing in making new or innovative products. "But in the long run they will not be serving customers" and will fail to be strong companies. "The people left behind after layoffs will be burned out and fearful, and companies will throw the bones to Wall Street." Gail MarksJarvis is a personal finance columnist for the Chicago Tribune. E-mail her at gmarksjarvis@tribune.com. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| Personal Finance: Resolve to cut your debt - Sacramento Bee Posted: 01 Jan 2011 09:43 PM PST It's that virtuous time of year for all those good intentions: lose weight, clean out closets, learn a foreign language. For New Year's resolutions involving money, there are two biggies: paying down debt and pumping up savings. And this month is when the holiday debt hangover kicks in. "People get shocked in January when the holiday bills start coming in. Or if they're paying online, the shock is already there," said Terri Ciochetti, a Sacramento psychotherapist and former financial recovery counselor. But it can be oh-so-hard to make those New Year's money resolutions stick. Ciochetti says that's partly because our resolutions are too often "desperate wishes, as opposed to thought-out plans." But it appears we're trying. Getting through the recession has forced more Americans to sock away what money they have, boosting the nation's dismal savings rate slightly. If you want to curb your spending and boost savings, here are some how-tos. Getting started Before knowing how to cut back, you need to know where your money goes. Financial experts recommend you track your spending for at least 30 days. Write everything down – from gum to groceries. That $5 you think you spend on lunch every day may actually be $8 or $9, even $15 if you're eating out. Three times a week, you're forking out $45 without even realizing. Tighten the budget belt Based on your 30-day spending, decide what's important; choose where you can economize. "It's a cliche, but think about if you need a Starbucks coffee every day," said Elias Delgado, spokesman with nonprofit ClearPoint Credit Counseling Solutions, which has 10 offices in California, including Sacramento. "At $5 a cup, that's $25 a week, $100 a month. If you really want it, can you buy a pound and brew it at home or the office?" Get a budget buddy, someone to keep you motivated, suggests Ciochetti. "It's easier to say, 'Let's lose 10 pounds together' than 'Let's save 10 percent of our money together.' But I've had clients who noticed a friend at work bringing lunch and joined them. Then others noticed and suddenly you're not alone." Other tips: Get a smaller cable TV package. Order two takeout pizzas a month instead of four, suggests Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. Review your cell phone bill: If you're paying for unlimited texting, for instance, but rarely use it, cut back on what you're paying for that privilege. At the grocery store, always shop from a list and never shop hungry, says Ciochetti. "Don't walk in with any cravings and don't buy anything in the checkout line. There's a reason the candy, gum, soda and $5 magazines are there." Bring your own magazine or pull out your phone and check e-mail while waiting, she said. To free up cash, have a garage sale or sell the boat and other "toys" you've accumulated, suggests NFCC's Cunningham. Get a cushion Everyone needs a financial safety net, a savings account for that unexpected medical, dental, car or family emergency. "What usually knocks people off a financial recovery plan is an emergency that requires a credit card: new tires for the car, the water heater goes out," said Ciochetti. Typically, it's recommended to set aside savings of three to six months of living expenses. "But in this economy, it's more realistic to have one to two months of savings because more people are stretched," said ClearPoint's Delgado. A reasonable amount is 10 percent of your take-home pay, he said. If you get paid $1,000 every two weeks, put away at least $100 in an account that's accessed only in an emergency. "Even if it's only $10 to $20, it's a start." Credit card help When it comes to credit cards, put them on ice. Literally, says Cunningham. "The plastic in your wallet is temptation. Remove it. Put (credit cards) in a mixing bowl with water in the freezer." Other tips: If you have multiple cards with varying debt, pay down the card with the highest interest rate first. Pay more than the minimum payment, whenever possible. Consider transferring balances to a card with a lower interest rate. But be aware: some card issuers are now charging higher transfer fees. Call your card issuer to ask – politely – about negotiating lower rates. If turned down, ask to speak with a supervisor. Take notes of dates/time/results from each conversation. Get outside help If you need help sorting it out, consider nonprofit credit counseling agencies, which offer money counseling by phone, online or in person. It's typically free or a nominal charge. To find the nearest agency,contact nonprofits like the National Foundation for Credit Counseling (NFCC) at www.debtadvice.org or (800) 388-2227, or the Association of Independent Consumer Credit Counseling Agencies at www.aiccca.org or (800) 450-1794. If you need help whittling down credit card debt, a debt management plan may be in order. That's where you sign up to have someone contact your creditors, seeking lower interest rates and a halt to late/over-limit fees. But be wary of "get-out-of-debt-now" offers. Some unscrupulous firms charge high monthly fees with few results and have come under fire by regulators. A nonprofit credit counseling agency, for instance, typically charges a $30 setup fee, plus a maintenance fee on your new monthly payments. At ClearPoint in Sacramento, for instance, it's 8 percent of your monthly payment or $8 on a $100 payment, or no more than $35. Do your homework. Look for firms that have certified credit counselors, offer consumer education workshops, and do not require minimum amounts of debt or number of credit cards. Get the agreement in writing. "A new year equals the potential for a new financial you," said NFCC's Cunningham. "But if you bite off too much, it's highly unlikely you'll stick with it." Identify your financial weaknesses and tackle the ones doing you the most harm, she said. "Then pat yourself on the back for getting started." © Copyright The Sacramento Bee. All rights reserved. Have a personal finance question? Call The Bee's Claudia Buck at (916) 321-1968. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| You are subscribed to email updates from Personal-Finance - Bing News To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 comments:
Post a Comment