Saturday, April 5, 2014
Why What You Invest In Is Important (Hobby Lobby As Example)
Recently, Hobby Lobby has been in public dispute over health care requirements that have to do with providing insurance that covers contraception. In response to this public display of action, opponents of Hobby Lobby have used the fact that mutual funds that cover Hobby Lobby's 401k program include investments into companies that manufacture contraception including the Plan B pill. A story by Huffington Post's Laura Bassett goes into detail about the issue (link here).
This brings to light one of the central tenet's of KDK Fund's philosophy. Find ways to invest only in what you believe in. Hobby Lobby's 401k dilemma is another example of how the finance industry could improve upon its service by providing company specific catered retirement plans. Because commissions are so low now, this action is possible. Hobby Lobby should not have to invest in corporations that it does not believe in. Nor should anyone.
But the lure of money makes people do silly things and bend their rules investment wise. In Hobby Lobby's case, the individual in the company charged with overseeing their 401k program should be making sure none of their money goes to where it is not supposed to go. It is sometimes hard to figure out and mistakes like this happen. But not correcting it puts their argument about the health care situation on shaky ground. It also questions the validity to their corporate ideals about contraception.
Some in the financial industry will try and sell you on the idea that it is only a small portion of your capital that is going into companies that you do not like and that you should accept that. Don't even think about accepting that premise. It is your money. Make sure it is invested the way you want it invested. If your current advisor can't do it for you, find another one. Decent fees have a way of convincing financial advisors to do the work needed.
Hobby Lobby has a big decision to make in regards to its culture. Does the financial advisor's culture win or the company's culture? We'll have to wait and see.
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing. Please direct all questions and comments to the blog or to firstname.lastname@example.org**