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I got an interesting reader question recently:

I received notification from one of the companies that I invest in that a proxy vote was coming up. What is proxy voting?

This is a great question! And it’s timely as well, since spring is often referred to as the proxy season.

Proxy voting is basically when you get to let companies that you invest in know what you think of their policies. This is your chance to influence company policy, ranging from who sits on the board of directors to what countries the company invests in, to environmental practices.

Your proxy vote is one that you cast without actually being there. Most of the time, you get one vote per unit of stock you hold. So if you own 50 shares, your vote counts 50 times. You look at the available proposals, and then you decide how you want to vote. If enough shareholders vote the same way, the company has to make a change. This is one of the hallmarks of ethical investing: Many investors who want to change the practices of the companies in which they invest do so through proxy voting. This way, rather than merely avoid companies with questionable practices, some investors can force a change.

If you have a mutual fund, it is worth noting that you might have turned over your proxy vote to your fund manager. If you are interested in casting your proxy vote, contact a fund manager or a knowledgeable broker or attorney to find out what you should do.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss.

Tags: stock market, stock market news, investing blog, proxy voting,
ethical investing, investments, mutual funds

One of the ways that some investors add diversity to their investment portfolios is through mutual funds. However, it is important to realize that mutual funds are notorious for the fees. Indeed, if you have started looking into investing in mutual funds, you are probably coming across terms like “no load” and “administrative fee.” Here is a quick look at some of the mutual fund fees that you might come across.

Mutual fund load fees

A load fee is basically the fee that you pay when a fund manager chooses what goes into your mutual fund. Load fees are on top of other fees that you pay in your mutual fund. There are three main types of mutual fund load fees:

1. Front load: This is charged when you put money into the fund. It is often called a “sales load.” Class A shares are usually front load.
2. Back load: A back load is a fee you pay when you take money out of the mutual fund. Class B shares are usually back load.
3. Level load: This mutual fund fee is a percentage charged every year. These are Class C shares. You should do your best to avoid these.

Mutual fund load fees can erode the value of your investment, since the fees are taken out of your account. It is worth noting that mutual funds with managers and load fees do not usually outperform self-managed mutual funds. Indeed, they perform about the same. However, some investors prefer to leave it to someone else, and are willing to pay the fee.

Other mutual fund fees to watch for

You can get a no load mutual fund, but it is important to realize that you will still have other fees. Some of these fees can include:

• Administration fees.
• Account fees.
• Annual fund operating expense fees.
• Management fees.
• Purchase fees.

Make sure you read the fine print in the prospectus to see what kinds of fees are charged, and how often they are charged. You want to choose a mutual fund whose returns won’t be diminished by all the fees you have to pay.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss.

Tags: investment portfolios, mutual funds, investing blog, mutual fund fees,
no load mutual funds, investments, fund manager

One of the growing trends in investing is environmentally friendly investing. And it is possible to make money by investing in environmentally friendly companies (or at least friendlier companies) and new energy sources. But, as with all investments, it is important to be careful. In many cases, some of the investments are risky.

So, in honor of Earth Day, here are some ideas for environmentally friendly investing:

1. Solar power. Solar energy is becoming more and more efficient. Advances are being made nearly every day in terms of making solar panel and cell technology better — and less expensive. And, as oil prices rise, solar stocks rise as well, since demand for alternative energy increases. But be warned: Some solar start-ups are risky. Carefully check your investment portfolio to make sure you have the risk tolerance.
2. Renewable energy funds. These are mutual funds and exchange traded funds that consist of renewable energy sources. They include companies that develop renewable energy, as well as companies that provide support services (such as manufacturing wind power turbines). Carefully choose these. They are popular right now, but you want to choose solid funds, since renewable energy investments are still volatile.
3. Biofuels. This is a very murky area of environmentally friendly investing right now. The biofuel conundrum is that some fuels, such as those made from corn ethanol or palm oil actually do more harm to the environment overall. But these are the most solid (especially ethanol, since it reaps the benefits of government subsidies to Big Ag). Other biofuels, such as jatropha, could make interesting investments, but they are also more risky.
4. Environmentally friendly companies. There are companies out there, like Nike and Google, that rate highly in terms of efforts to improve their environmental record. You can get a list of the most sustainable companies and consider investing in those. You’d be surprised by some of the solid names on the list.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss.

Tags: investing Earth Day, environmentally friendly investing, investing blog, investing ideas,
Earth Day, stock market blog, renewable energy funds