Photo Unhindered by Talent @ flickr
The question of where to put your money in 2009 is something even the biggies like Warren Buffet are definitely grappling with. The problems of the economy - astounding debt and an uncertain dollar - are such that not even geniuses know exactly which way the money winds will blow.
Unfortunately, so-called green or socially responsible stock funds as a whole didn't do remarkably better (and sometimes they did worse) than the S&P; 500 or other stock indexes. That might be in part because, as Paul Hawken presciently noted way back in 2004, many SRI funds can be indistinguishable from regular run-of-the-mill mutual funds -- they nearly all own many of the same large-cap companies. And the picture's been grim for clean energy stocks--the Nex tracking index of these clean energy stocks shows a 66% drop in 2008! So, while we emphatically don't pretend to be giving any investment advice, here are some alternatives worth your further research and consideration:
1) Invest in Björk and nearly-bankrupt IcelandWell, there's no time like the present to become sustainable, is there? At least that's what Björk thinks, and we gotta give that girl a hand. Björk has joined forces with two female Icelandic founders of the wealth management company Audur to create the Björk fund.
The Björk fund will invest around 100 million Icelandic crowns ($820,000 on 12/30) in companies that are, as the fund puts it: "sustainable, both in terms of financial returns as well as being socially and environmentally responsible...Björk is particularly interested in companies that exploit our well educated human capital and vibrant culture..." This is by no means without big risks, and Audur says that it is both risk aware and dedicated to promoting female values in business ventures. The fund won't make any decisions about which ventures it will invest in until after it is closed around March 2009. Expect a wild ride!
Photo of rat roulette Brett L. @ flickr.
2) Try Your Luck on a New SRI FundIt may seem a dire time to launch a new mutual fund. The Dreyfus Global Sustainability Fund plans to include those companies comprising the Dow Jones Sustainability Index (DJSI). A minimum investment of $750 for an IRA or $1,000 for a regular account is required. How well have the DJSI companies done, however?
Well, if you look through the end of 2007, DSJI did about 7 to 10 points better than the S&P; 500. If you focus on 2008, the DSJI World Index is down 36.47 percent. And the S&P; 500? Well, it's down 48.76% in 2008 (thus far). So while both are in the red, there's still a slight advantage for the green-hearted investor.