My dad used to say that if you want to make a political statement you should vote with your wallet. He was always of the opinion that we can influence the politics of movers and shakers by taking our business away from them, or giving them our business. "Reward good behavior with money," he said. "Punish bad behavior with a boycott."
Dad was always fond of saying "there is always another brand in the supermarket". That didn't make sense to me when I was a kid because I had my favorite foods. But when I grew older and my tastes started changing I understood what Dad meant. You can change your tastes and start buying something else.
But how easily can we influence the politics of the country with our purchases? I think Dad meant that if you demonstrate your conviction by making a public change other people will follow you. It's about organizing your peers to change where the money flows. And this sometimes works. Here is an example.
In April 2013 word hit the streets that billionaire investors the Koch Brothers wanted to buy the Tribune Company. The Kochs are ultra-conservative liberals who use their money to support really conservative politics. A lot of people were appalled at the idea that they could gain control over one of the nation's leading news and media companies.
Employees and other concerned people organized protests and rallies and by August it was reported that the Kochs were no longer interested in buying the Tribune Company. This was a victory for the little people because they did not blind themselves with despair. They did not think about how ineffective the power of one person is. They went looking for allies and found them.
When you are making strategic investments (not investing in passive funds) you should be looking at everything from whether the CEO affects the stock price to what the politics of the investment brokerage is. That includes looking at reviews of brokers in markets that can affect your investments.
Whether you are thinking of going with a large, general brokerage or a small brokerage you want to collect as many opinions about the broker as possible. For example, suppose you are considering using a brokerage like TradeStation. You will look up articles that review TradeStation on the Web but you should also look at the motivations of the people writing the articles.
If you pick a broker that pushes bad funds because they are just collecting fees, and you made that choice on the basis of a review you found online, could you have made a better choice by looking at the reviewer? If they review other brokers and you find a mix of philosophies and practices among those brokers then your reviewer may be a low-risk resource.
A reviewer who only pushes companies for the money is not as trustworthy as a reviewer who gives you an honest opinion. An honest reviewer with a good reputation can send a lot of investors to any one broker, and that in turn can send a lot of money to politically-savvy investment funds. Do you know whose advice you are following?
If you want to support liberal politics with your investment dollars you should compile a list of companies that support those politics; then look at whose funds invest in those companies. Finally, look at who is recommending those funds at the broker level. This kind of due diligence takes time but you can look for people who share their political views and investment strategies on the Web.
Money fuels politics and as consumers we control the money through our purchases, but as investors we control the money through our choices too. Look for signs that a broker is pushing funds that may help political causes you support; but always remember that losing your money on bad investments takes away your economic power. You still have to invest in companies that make money.
