Ethics and investment
"Are there businesses which professionally invest ethically? Yes.  The common term for this is ""socially responsible investing"".  Looking at that page and googling that term should provide you with plenty of pointers to funds to investigate. Of course, the definitions of ""ethical"" and ""socially responsible"" vary from person to person and fund to fund.  You'll have to take a look at each fund to see which ones match your principles." Avoiding tobacco, etc is fairly standard for a fund claiming ethical investing, though it varies. The hard one on your list is loans.  You might want to check out Islamic mutual funds. Charging interest is against Sharia law.  For example: http://www.saturna.com/amana/index.shtml From their about page: Our Funds favor companies with low price-to-earnings multiples, strong   balance sheets, and proven businesses. They follow a value-oriented   approach consistent with Islamic finance principles. Generally, these   principles require that investors avoid interest and investments in   businesses such as liquor, pornography, gambling, and banks. The Funds   avoid bonds and other conventional fixed-income securities. So, it looks like it's got your list covered.  (Not a recommendation, btw. I know nothing about Amana's performance.) Edit: A little more detail of their philosophy from Amana's growth fund page: Generally, Islamic principles require that investors share in profit   and loss, that they receive no usury or interest, and that they do not   invest in a business that is prohibited by Islamic principles. Some of   the businesses not permitted are liquor, wine, casinos, pornography,   insurance, gambling, pork processing, and interest-based banks or   finance associations. The Growth Fund does not make any investments that pay interest. In   accordance with Islamic principles, the Fund shall not purchase   conventional bonds, debentures, or other interest-paying obligations   of indebtedness. Islamic principles discourage speculation, and the   Fund tends to hold investments for several years. Domini offers such a fund.  It might suit you, or it might include things you wish to avoid. I'm not judging your goals, but would suggest that it might be tough to find a fund that has the same values as you. If you choose individual stocks, you might have to do a lot of reading, and decide if it's all or none, i.e. if a company seems to do well, but somehow has an tiny portion in a sector you don't like, do you dismiss them? In the US, Costco, for example, is a warehouse club, and treats employees well. A fair wage, benefits, etc. But they have a liquor store at many locations. Absent the alcohol, would you research every one of their suppliers? "Markets are amoral. If you don't buy stock in a company that has high growth/earnings, someone else will. By abstaining you will actually make it cheaper for someone else who is interested in making money.  Investing in ""socially responsible"" funds will only ensure that you have less money to make a moral difference in the world when you decide to transition from working to philanthropy. Edit to clarify -- You aren't interested in buying individual stocks directly, that leaves you with two general options: You can make a statement with your investment now, or you can take the better returns and make a difference with your money later." There are a number of mutual funds which claim to be 'ethical'. Note that your definition of 'ethical' may not match theirs. This should be made clear in the prospectus of whichever mutual fund you are looking at. You will likely pay for the privilege of investing this way, in higher expenses on the mutual fund. If I may suggest another option, you may want to consider investing in low-fee mutual funds or ETFs and donating some of the profit to offset the moral issues you see. There are the Dow Jones Sustainability Indices. I believe the reports used to create them are released to the public. This could be a good place to start. Peer to peer lending such as Kiva, Lending Club, Funding Circle(small business), SoFi(student loans), Prosper, and various other services provide you with access to the 'basic form' of investing you described in your question.  Other funds: You may find the documentary '97% Owned' fascinating as it provides an overview of the monetary system of England, with parallels to US, showing only 3% of money supply is used in exchange of goods and services, 97% is engaged in some form of speculation.   If speculative activities are of concern, you may need to denounce many forms of currency. Lastly, be careful of taking the term addiction too lightly and deeming something unethical too quickly.  You may be surprised to learn there are many people like yourself working at 'unethical' companies changing them within.
You need growth in your retirement fund. Sad to say but the broad U.S. marks still has better growth perspective than the emerging markets. Look at China they are only at 6.7% growth for next year the same as this year.  Russia's economy is shrinking. These are the other two super powers of 2015. The USA is still the best market to invest in historically and in the present. That's why the USA market tends to be overweight in most retirement portfolios. Now by only investing in the USA market do you miss out on trends internationally? Well you do a bit but not entirely. Many USA companies are highly international in regards to their growth. Here are some:  So in short the USA market still seems to be the best growth market and you still get some international exposure.  Also by investing in USA companies they sometimes are more ethical in their book keeping as opposed to some other markets. I don't think I'm the only one that is skeptical of the numbers China's government reports. Sorry, but obeying the law is ethical.   You're silly symbols are wrong... you probably meant:      legal  !=  ethical  Here is a thought experiment for you:  So the speed limit is 60 Mph.  You drive 15 Mph in that area, that is ethical driving, because there is no law governing the minimum rate of speed.  It's like that... You might be an asshole for driving too slow, but you're not breaking the law. Tax is like that... their only real competition at this point are places like Amazon.com, which treat their employees just as shitty, but people like deliveries where they don't see the workers wallowing in their misery.   I'm not saying never shop at places, but we should be pushing for workers rights reforms. Its clear the invisible hand of the market is not able to force companies to be ethical when there aren't enough jobs for people to run to that are. "Of course there can always be _some_ ways you can integrate some amounts of social responsibility into product, but I don't think that's the point he's making. Social responsibility would be called ""business best practice"" if it improved the bottom line. It is inevitable that there are times when social responsibility and business goals diverge, and at that point given two companies that are in the same market space, the one who bets against society will win. This is the sort of thing that _must_ be handled in law, and absolutely cannot be handled by allowing the free market to work because the free market will not discover ethics, it will discover that ethics don't matter in an environment that doesn't require them.    It's the reason any claim that business does best when there are no regulations is absolutely false. If a company can make more by polluting and you don't have regulation that says clearly ""it may cost more, but we require you to compete by also being non-pollutiong"", then you should expect the market to converge on pollution as ""best practice"".  Removing regulation won't allow business to sort this out, it will allow business to not care that they are polluting.  There is the notion of a B-corp that is organized for the purpose of trying to be good guys without being sued. but it doesn't assure that they will have a fair stake int he market.  It just allows them to fail without getting sued by stock holders.  Basically if everyone is not required to be that level of good guy, though, B-corps are basically indulging unilateral disarmament. Sure, they can make a case that ethics matter, and that might work, but they don't need B-corp protection for that. If making the case that ethics matter was going to win in the market, any corporation could do it.  For more thoughts, so I don't have to drone on here, see my articles [Fiduciary Duty vs. The Three Laws of Robotics](http://netsettlement.blogspot.com/2009/02/fiduciary-duty-vs-three-laws-of-robotics.html) and [Losing the War in a Quiet Room](http://netsettlement.blogspot.com/2012/01/losing-war-in-quiet-room.html)." "Wouldn't any rational person leave those decisions to the managers who have collectively positioned the company to be able to generate those profits in the first place?  I'm sure Carl Icahn and other ""activist investors"" would disagree but part of the reason for investing is you trust management to make a good ROI.  If as an investor I'm not happy with a 30 or 40 percent ROI then I should get out of the stock." I think your best strategy is to learn more about the behavior of what you're investing in.  Learn everything you can about it.  Specialize in it.  The more you study, the more the proper strategy will present itself. Answer the questions you ask in paragraph 3 through your own study. "This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it.  By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions.  But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution.  I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things ""average out"" over time.  If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical.  Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return.  You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion.  When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks?  In many cases, less risks.  This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills).  When you are young, the value of this capital changes significantly with market performance so you already have background risk.  Buying risky securities adds to that risk.  When you are old, your human capital is worth little, so your overall portfolio becomes less risky.  You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so.  But I can't be sure." Fundamental rule of investing money : Now come to the point, best money investment