Q: How do I invest in socially responsible companies?
A: First, understand that the term can mean different things. A company may have many women in management and not produce firearms, but it might pollute the environment. It’s hard to find completely objection-free organizations.
Still, you do have several options for socially responsible investing (SRI). You might, for example, invest in a socially responsible mutual fund.
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As with most funds, not all SRI funds have above-average records. Still, some do, such as the Neuberger Berman Socially Responsive Fund (NBSRX), the Ariel Appreciation Fund (CAAPX) and the Parnassus Core Equity Fund (PRBLX).
Alternatively, seek out companies whose practices you approve of. You can research various companies’ social track records at socialfunds.com/csr.
Check out these books, too: “Socially Responsible Investing for Dummies” by Ann Logue (For Dummies, $25) and “Investing for Change: Profit From Responsible Investment” by Augustin Landier and Vinay B. Nair (Oxford, $28).
Last week we listed some outstanding books on American economic history, and this week we add a few titles focused on more modern times. Each offers insights that can make you a better investor — or thinker.
“American Colossus: The Triumph of Capitalism, 1865-1900” by H.W. Brands (Anchor, $18). This well-written and highly engaging book explores the lives and times of powerful capitalists such as J. Pierpont Morgan, John D. Rockefeller and Andrew Carnegie.
“Lords of Finance: The Bankers Who Broke the World” by Liaquat Ahamed (Penguin, $20). Also rather international in scope, this book is about four central bankers — from the U.S., France, England and Germany — who played key roles in shaping global economic policy after World War I. Ahamed explains the Great Depression by “looking over the shoulders of the men in charge of the four principal central banks of the world.”
“The Battle of Bretton Woods” by Benn Steil (Council of Foreign Relations, $20). In 1944, representatives from 44 nations gathered in New Hampshire to design a global monetary system. American Harry Dexter White and Englishman John Maynard Keynes “set out to create the economic foundations for a durable postwar global peace.” This award-winning book covers an important, overlooked story.
Global energy production is booming, and one of the best ways to profit without being hurt by commodity-price volatility is to invest in the companies servicing and supplying the oil and gas industry.
Consider National Oilwell Varco (NYSE: NOV), the world leader in providing major mechanical equipment for land-based and offshore drilling rigs. The company has more than 800 manufacturing, sales and service centers, and about 90 percent of all rigs carry some of its equipment.
National Oilwell Varco’s first-quarter 2014 results featured its backlog of orders for rig-technology equipment hitting an all-time high of $16.4 billion (up 27 percent year-over-year), revenue rising 9 percent and net income jumping 18 percent.
The company isn’t perfect, as it does face risks such as competition, and its profit margins have been shrinking a bit in recent years.
It expects a modest near-term slowdown, too. Still, National Oilwell Varco can benefit enormously from an anticipated spending spree worth hundreds of billions of dollars in new energy production infrastructure investment.
It also plans to standardize its equipment and infrastructure, which will help customers keep costs down without sacrificing timeliness when replacing parts.
National Oilwell Varco stock is fairly inexpensive, recently with a price-to-earnings (P/E) ratio near 14 and a dividend yield close to 2.4 percent.