thumb iStock 000002287986XSmallThe methods I have been discussing and the results displayed have given no consideration to what a company does to make its earnings. Using Technical Analysis (and fundamental analysis at times) as the primary reason for our buy and sell signals gives no consideration to the reasons “why” a share is performing as it is, it is “as it is” so we buy and sell based on momentum of the price and the emotion of the crowd.

However some people are deeply concerned about company’s effect on the environment and the impact the companies policy may make socially. Our trading rules may trigger a buy in a gambling company and you may be passionately opposed to gambling, or you feel strongly opposed to alcohol and consider it a social problem and do not want to support companies in this sector, in this case you will need to do your own screening of stocks to suit your personal beliefs.

For example for many years I have specialized in the gold market, particularly gold shares. I believe Governments throughout the world create financial instability via central banks by the printing of paper money. With no backing of a physical asset like gold that can not be manipulated, they over stimulate economies creating booms and busts adding to the hardships of many and complicating an already intricate world.

The ownership of gold I see as a positive for global stability and I support the industry selectively.

Mining is a controversial issue and I agree with the concerns of many, recently one of the worlds biggest gold miners, Newcrest Mining of Australia has taken over Lihir gold of Papua New Guinea. Lihir has a horrid environmental record in that country in regard to polluting river systems and for that reason I would not buy it. Hopefully Newcrest will do a better job.

I remember as a child playing and swimming with children in that country where I lived a short while, I don’t like the thought of that no longer being able to happen because we in the western economies support a company with little concern for social liberties.

This is my choice, and we all need to make our decisions and live with them, it is possible to still make money and trade well by being a little selective.

Below is a guideline as to what to look for before deciding to invest in a company, more information can be found on the ASX website or by googling a companies website

Ethical Criteria 

  1. Environment:Avoids companies related to pollution and environmental degradation. Positive screens for pollution reduction and environmental remediation and preservation.
  2. Human Rights:Avoid companies with human rights issues.
  3. Workplace:Positive screen for employment standards.
  4. Arms:Negative screen for militarism and armaments.
  5. Social Health:Negative screen for social justice and positive screen for community development.
  6. Aboriginal:Avoid companies with human rights issues
  7. Corporate Citizen:Negative screen for product and advertising integrity and financial speculation.