This article exactly accords with the dominant feedback I got when I announced my transition from mainstream to where I am right now.
The article is legitimate in most aspects, especially from the wealth management perspective. Yes, enterprises sacrificing their profit to generate more social value may not best serve its shareholders’ interests. Yes, delivering sub-par returns to replace nothing is a powerful marketing premise to attract more philanthropic capital. Although a bit extreme, yes, one may do better by going long a “vice” fund and shorting the “socially conscious” funds and giving the proceeds to charity.
Nonetheless, I view impact investing as a matter of choice. It’s like one more vegan menu added to bring more customers to the restaurant. While some people may enjoy traditional juicy medium-rare steak, some people may opt for chewy seitan instead.
When I was trying to convince my family that I had to get an expensive cat breed 3 years ago, I started sobbing, “Do you know how sick and tired I get just staring at the stock prices and flipping through financials to make money? This cat will be the goose that lays the golden egg for me. At least this investment is warm-blooded and amiable, so it’s worth enough to care for constantly.” I’m not sure if it was the tear or my compelling story per se, but soon afterwards I did adopt a wonderful cat. She did become pregnant and did deliver a one-and-only son, though I never managed to get to the point of selling him.
Desperate for an alternative investment option, I have been seeking for an option that would make me feel better even if my principal is at stake. Actually, especially when the principal is not protected. Because when people lose from wagering on complex derivatives, feeling restless to identify what went wrong, people end up blaming this intangible “finance” industry as a whole. While finance, in fact is nothing more than a platform of trading capital, it is heavily scrutinized for its unintended consequences.
Finance and restaurants both have long way to go to meet all the demands of diverse needs. That being said, no need for carnivores to discourage the chef to invent new menu for herbivores. I’m an omnivore so I am not taking any sides here to promote vegetarianism. I’m simply saying that the chef needs to make a living too after all!