The problem with doing your own investing is that you need to spend an inordinate amount of time watching the market and the individual stocks and bonds you own. Municipal bonds offer gains that are occasionally below the rate of inflation in other words, providing a loss disguised as a gain. Fortunately, you don t have to become a stock expert to secure your future. There are an ever-increasing number of what are called socially responsible mutual funds that select the entities they invest in, screening out those that do the most harm like arms manufacturers, tobacco companies, nasty polluters and sweatshop operators and emphasizing those that do less. Others screen in companies with family-friendly employment policies and good records on affirmative action.
Different funds have different screens, however.
In addition to its information on community investment, the Social Investment Forum website has a ton of relevant information on socially screened mutual funds. One broker we talked with compared responsible investing to bowling s classic 7-10 split. He claimed that you couldn t make legitimate gains if you were always worried about doing the right thing, too. When he looked at the facts, his jaw dropped. Seventy percent of the largest social investment funds earned the highest performance ratings in 1999.