Living Large In Our Little House

Happy Friday, every­one! Although I'll be work­ing through the week­end, the end of my reg­i­mented week is almost over. Today, I have Ann C. Logue, author of "Socially Responsible Investing for Dummies" answer­ing some ques­tions about her book.When Dale and I opened our IRA, I was con­cerned about some of the com­pa­nies we would be invest­ing in.  Our finan­cial advi­sor didn't have a whole lot of answers for us, but I'm bet­ting Annie's book will help us do it bet­ter the next time. When we have money to invest again, I hope to be a lot smarter about money and more aware of where my invest­ment $$ are going.

Annie is the author of three books in Wiley’s “For Dummies” series. She has also writ­ten for Barron’s, Newsweek Japan, and BusinessWeek Chicago, among other pub­li­ca­tions. She is a lec­turer in finance at the University of Illinois at Chicago and her cur­rent career as a writer/author fol­lows 12 years of expe­ri­ence as an invest­ment ana­lyst. She holds a B.A. from Northwestern University, an M.B.A. from the University of Chicago, and the Chartered Financial Analyst designation.

Click to the next page for my short inter­view with Annie and learn how you can enter to win a signed copy of her book.

Why did you decide to write Socially Responsible Investing for Dummies?

"The main rea­son is that I think that most peo­ple need to learn more about invest­ing and about sav­ing money for the future. People put it off for many rea­sons, and some­times it’s because they are afraid that if they invest, they’ll be sup­port­ing the bad guys. Some com­pany exec­u­tives are bad guys, and some com­pa­nies have bad poli­cies, but you don’t have to be a part of it. My inten­tion is to help real­ize their finan­cial goals as well as their eth­i­cal ones."

Why do you think socially respon­si­ble is important?

In the long run, com­pa­nies that respect the world in which they oper­ate should do the best. That’s not always the case in the short run, of course, which is why all investors need to do their research! But remem­ber that investors are own­ers of com­pa­nies, whether they own stock directly or through a mutual fund. As own­ers, they should use their power to encour­age man­age­ment to behave bet­ter. Shareholder activism is one com­po­nent of grass­roots activism, and it’s pure capitalism!

The thing to keep in mind, though, is that there is no per­fect com­pany (just as there is no per­fect job, per­fect boyfriend, or per­fect politi­cian). I think social respon­si­bil­ity is impor­tant, but the com­pany still has to be a good invest­ment, and you need to remem­ber that even a good busi­ness won’t be perfect.

Can you give one tip from your book for peo­ple who want to invest in socially respon­si­ble companies?

Consider one of the many socially respon­si­ble mutual funds out there. There are many com­pa­nies that man­age money under dif­fer­ent social, eth­i­cal, and envi­ron­men­tal guide­lines, ad a quick Internet search should turn up good ones. Then, go a step fur­ther and look up the funds that inter­est you on a rat­ings ser­vice such as Morningstar​.com. A socially respon­si­ble invest­ment can be a good one, but not all are.

Investing, espe­cially in today's mar­ket, is tough for a lot of peo­ple. Why is invest­ing at all still important.

Yeah, it has been nasty out there, hasn’t it? But peo­ple still want to retire and to send their kids to col­lege. Those are long-term goals with long-term sav­ings require­ments, and they didn’t go away in the last year. Also, remem­ber that the name of the game is buy­ing low and sell­ing high, so it’s usu­ally a good idea to invest when every­one hates the mar­ket. That’s how you get in at low prices.

Entering the give­away is sim­ple, as always! Just post a com­ment in the com­ment sec­tion of this post, telling us if you've made invest­ing deci­sions based on the social respon­si­bil­ity of the com­pany, and why or why not? Post between now and the new post on Monday, January 25, and I will enter your name into the draw­ing. If you win, you will need to notify me with your name and address so we can send the book by Wednesday, January 27!