companies with good community relations or that promote workplace diversity. Because of those stringent criteria, you’ll find that these funds often are well stocked with the same technology, healthcare, software or Internet shares that have blazed a trail through the market this year. "Firms like Microsoft (Nasdaq: MSFT), Cisco (Nasdaq: CSCO), Merck (NYSE: MRK), Johnson & Johnson (NYSE: JNJ) or SBC Communications (NYSE: SBC) have been big winners for socially responsible fund companies," says Rocco. "With holdings like those, you’d stand to do well in the recent market."
INVESTING WITH A CONSCIENCE
If you feel your conscience squirm a bit any time you think about investing, you wouldn’t be alone. A 1998 survey sponsored by Ariel and discount broker Charles Schwab & Co. found that blacks seem especially sensitive to a number of issues when they’re putting their money to work.
Where do you start and how do you get your funds working? Whether you’re talking about retirement or tuition for your kids, you’re in for some pretty hefty bills in the future. Therefore, it behooves you to find hard-working investments that will bring home the kind of gains you’ll need to meet the obligations ahead.
It goes without saying that at the very outset, your choices are either stocks or mutual funds. By investing in a mutual fund, you’ll essentially be hiring someone, a portfolio manager or team of analysts, to do the work for you.
That’s the job of analysts like Bill Thomason, director of portfolio management for Parnassus Investments, a socially responsible firm in San Francisco. While Thomason says 80% of his work involves number-crunching-reviewing such figures as revenues, earnings growth and price-to-earnings multiples-he spends the remaining 20% judging the behavior of a company. Corporate responsibility remains a deciding factor in whether Parnassus’ mutual funds ultimately take a stake as shareholders. In fact, though Thomason says the process of screening for social responsibility makes up perhaps 20% of the work that goes into picking companies, there are a lot of hoops for those companies to jump through.
Eric Draper is another investor who has made money using his conscience. A realty consultant who evaluates affordable housing programs for nonprofit organizations, his activist streak goes way back. Draper, 45, was politically active when he attended the City College of San Francisco in the 1970s. He took part in protests against apartheid, petroleum companies and polluters. He was drawn to socially responsible investing as a way to use his money to make a statement as well. "I’ve always felt that I should take an active stance in the community," says Draper, "and given the fact that I was so politically outspoken when I was younger, investing this way made sense."
Today, the former firebrand has a wife, Salina, 33, and a son, Marcus, 10. In addition to taking care of their needs, he has an eye on his golden years. Draper, who worked a while as a broker for