An updated slideshow is available on my slideshare. Slides for Joby Gelbspan's skillshare on SRI.

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August 5, 2013
the Nonprofit Center, Boston, MA

2. Joby Gelbspan
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Backgrounds in:
• corporate accountability activism
• financial analysis & investment management.
NOT an investment advisor, just here to share
my skills and observations on this subject.
Reachable via Linked In or www.sojust.org

3. Corporations are not Citizens*
• Although they have been granted
“personhood” and a broad range of civil
rights, corporations are not human
• Amoral, profit-seeking by law
• What is reasonable to expect?
* In common sense reality, not legal obfuscation
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4. How can an investor be “socially responsible?”
• Making choices that promote our values
• Financial privilege, obligates us to take
ownership of the effects our decisions have on
the broader society, present and future.
• Progressive investing means literally owning
your privilege - taking control of your financial
choices, and responsibility for their effects.
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5. Conscious Choices
Industry Exclusions
– Pharmaceuticals
– Prisons
– Military Contractors
Corporate Behavior
– Environmental responsibility
– Policies on gender or racial discrimination
– Best in class
Proactive Support
– Community lenders, infrastructure
– Clean energy
– Social ventures, microfinance
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6. Terminology: Types of Instruments
Bonds Stocks
Corporate (or government) debt. A share of ownership of the company.
Lower risk, lower return. Unlimited upside, unlimited downside.
Returns interest and gain or loss on sale. Returns gain or loss on sale, and sometimes
dividends.
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7. Drivers/Risks
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Fixed Income
Yield determined by interest rates and
the creditworthiness of the company.
Inverse to interest rate movements.
Equity
Corporate performance
Industry and market trends
More volatility, larger potential growth
Yield determined by the profitability of
the company.

8. Terminology: Types of Investments
Individual securities (stocks or bonds) are sold
by shares or dollar amounts.
Mutual Funds are companies that buy
portfolios of investments and sell units which
represent shares of the entire portfolio.
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XYZ Fund My Share of XYZ Fund
Apple - $4M Apple - $400
Johnson & Johnson - $2M Johnson & Johnson - $200
Nestle - $4M Nestle - $400
General Electric - $10M General Electric - $1,000
Total Fund: $20M I have $2,000 in XYZ Fund

9. Mutual Funds
• Types of Mutual Funds:
– Equity: holds stock
– Fixed Income: holds bonds or other types of debt
– Balanced: holds some blend of the two.
• Funds require less ongoing monitoring, but
won’t perform as well as good individual picks.
• ETFs are exchange-traded funds, usually
following an index.
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10. Terminology: Market Capitalization
• # Shares Outstanding X Price
• Small Cap: $300M - $2B
• Mid Cap: $2B - $10B
• Large Cap: $10B +
• “Mega Cap” newer, imprecise, > 100B
E.g. Wal-Mart (WMT) market cap > $258B
$469B revenue > the GDP of most countries
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11. Choosing a mutual fund
• Investment objective – e.g. international stock or
exposure to a particular country or industry
• Fees vary widely between funds and make a big
difference for your long-term returns
• Actively or passively managed (index funds)
• Tool to diversify your portfolio
• Look for the prospectus and holdings
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12. Public Companies
Public Companies are listed on stock exchanges, and are therefore subject
to certain regulations and requirements.
Well-known example: the Dow Jones Industrial Average
30 major corporations, including:
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3M
American Express
AT&T
Bank of America
Boeing
Caterpillar
Chevron
Coca-Cola
Dupont
General Electric
Johnson & Johnson
Kraft Foods
McDonald’s
Microsoft
Pfizer
Verizon
Walt Disney
Walmart

13. Identifying Public Companies:
Start with what you know
• Amazon
• Google
• Best Buy
• Whole Foods
• Green Mountain Coffee
• UPS
Think creatively… and talk it through.
You should never invest in a company unless you
understand the key factors driving the business. 13

14. Investing for Value
• Long-term investing, buy and hold
• Seek investments where we understand the
long-term value and are ready to commit to
owning a share for appreciation over years.
• DIVERSIFICATION spreads your exposure to
each investment’s individual risks.
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Time
Risk
• Two ways to make money in the market:
time and risk.
• Higher risk = higher return. The price of
the investment is more volatile over time.
• As long-term investors, time is on our
side. We can afford short-term declines if
we can wait for the right time to sell.

16. Quick Sense of the Room
Raise your hand for the statement which best
describes your investment goals:
• Saving for the long-term (> 5 years)
• Informing myself for when I have long-term
savings
• Shorter-term goals: may need access to cash
in the coming 5 years
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17. Asset Allocation: Rule of Thumb
• Allocation between stocks, bonds and funds
depends on our two key factors: time & risk
• Standard rule of thumb: keep the same % as
your age in fixed income. E.g. a 30 year-old
would have 70% stocks and 30% bonds.
• Start conservatively, and spread your risks.
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18. But these are unusual times…
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19. THE FACTOR OF TIME
 Long-term “buy and hold” investments
 Over time, you’ll get used to the ups and
downs and will get clearer about your goals
 For now, make a couple of good choices,
and try to forget about them
 The most you should check your investments
is about monthly
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20. Questions at this point?
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Do we all feel comfortable with these basics first?
Next up: making politically-informed choices

21. Conscious Choices
Industry Exclusions
– Pharmaceuticals
– Prisons
– Military Contractors
Corporate Behavior
– Environmental responsibility
– Policies on gender or racial discrimination
– Best in class
Proactive Support
– Community lenders, infrastructure
– Clean energy
– Social ventures, microfinance
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22. Socially Responsible Investment Companies (SRI’s)
The SRI Industry has grown dramatically over the
past 20 years, offering a broad range of products
to suit different investment goals.
Examples of well-known SRI’s:
• Domini
• Calvert
• Green Century
• Pax
• Parnassus
• Walden
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No longer a fringe movement:
Today, approximately $3 trillion
of the estimated $25 trillion US
investment market complies
with some SRI criteria.

23. “Socially Responsible Investing”
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Pro’s
Investment Criteria, screens
Proxy voting
Shareholder “engagement”
Strengthens progressive agents in the
capital markets
Con’s
Underwhelming performance
Fees
No Fund will fulfill your definition of
“responsible.”
Use these tools when they serve your
plan, you still have to do your own
homework.

24. Shareholder Resolutions
• GMOs
• Fracking
• Board Diversity
• Packaging
• Climate change
• Marketing practices
• E-Waste
• Stop political contributions
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25. Shareholder/Stakeholder Activism
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Spring, 2013 actions at Starbucks and Goldman Sachs

26. Researching Corporate Behavior
• Corporate Website and SEC Filings
• Organizations like ICCR and UFE:
http://www.iccr.org/shareholder/trucost/index.php
http://faireconomy.org/shareholder_activism
• In the digital age, you’re limited only by your
search terms!
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27. Researching Corporate Performance
• Read the Financial Statements and Annual
Report
• Investor section of the website
• Yahoo! Finance or other investor coverage
(including historical price info)
• Consider the industry and the long-term value
proposition
• Assess the risks
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28. Whole Foods on Yahoo! Finance
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29. For More Info
• Terminology / Glossaries:
– www.investopedia.com
– www.investorwords.com
– www.wikipedia.com
• Researching investments or markets
– www.yahoo.com/finance
– Bloomberg, other news agencies
– Commentators and blogs
e.g. Motley Fool: http://www.fool.com/
• SRI’s
– www.ussif.org
– http://www.socialfunds.com/
• Refuse to be intimidated!
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…and as you continue researching and learning, please
cast your vote for the 2013 Corporate Hall of Shame at
www.stopcorporateabuse.org