Ethical Investing and Socially Responsible Investing: Where to Begin

Ethical Investing and Socially Responsible Investing

Ethical Investing and Socially Responsible Investing tend to be used by investors interchangeably.

So what exactly is Ethical Investing and Socially Responsible Investing?

Before discussing Ethical Investing you must first have a basic understanding of Investment in general.

Investment can be though of as placing discretionary funds (money that is left over after paying all expenses) to work with the anticipation of use at some point in the future. In return for saving those funds today, an investor requires compensation.

When determining how an investor would like to be compensated they will need to consider two elements simultaneously: risk and reward.

Risk refers to the amount of risk investors are prepared to take in order to receive a certain return. A very basic definition of risk would be the probability of a successful outcome investors may assign to a certain investment, generally, the greater the uncertainties the greater the risk. To determine what investments are right from a riskiness perspective an investor will need to consider the following: Are you risk averse (don’t want risk)? Risk neutral (willing to take on a degree of risk in order to receive a greater return)? Or Risk loving (willing to take large risks with the potential of receiving larger returns)?

Reward is the desired amount you would like to receive from an investment. Risk and Reward tend to be correlated very strongly—as the potential reward increases so does the potential risks.

Ethical Investors just throw a third variable into the mix: Responsibility.

Responsibility can mean different things to different people. This is a variable Taylor made to individual preferences; however, a generic definition is the way that a corporation conducts its business: Is there goal to increase profits or leave the world a better place?

For example, an investor who deems investing in weapons or cigarettes to be unethical would not invest in a company that produces either because they believe it irresponsible.

To determine what a company invests in and to what degree you will consider a company unethical can take some detective work. You will need to ask yourself questions like: would I invest in a company that supplies companies involved in what I deem as unethical and will I invest in companies that buy products from companies I deem as unethical.

For example: Would I be willing to invest in a mining company that sells iron to a weapons manufacturer who will turn this raw material into a weapon. Or would I invest in a company that buys paper from a company that also makes cigarettes. Another concern would be whether an investor would consider investing in a company that produces alcohol for example but donates to an AA Group to help alcoholics with their problems.

Combining these three variables you get the 3 R’s of Ethical Investing: Risk, Reward and Responsibility. The degree to which you incorporate each variable and the significance of each in your investment decisions will guide your investment strategy.

Some valuable resources for ethical investing include:

Canada
Ethical Funds
Social Funds

America
Socially Responsible Investing
Corporate Socially Responsible News Wire

Just remember when engaging in Socially Responsible Investing or Ethical Investing personal choice is key to the Responsibility Variable while the goal is still to maximize profits while minimizing risk. Also, it has been displayed over the past 20 years that many investments deemed socially responsible have outperformed peers and this may be a direct result of management at many companies adhering to higher standards.

Investing in Uranium: Playing the Recent Slump in Prices

Investing in Uranium

The price of Uranium has been extremely volatile over the past year from a high of just over $300 (USD) per Metric Tonne in June of 2007 to a recent low of $75 (USD) per Metric Tonne as of October 11, 2007.



This price drop has drastically affected major Uranium producers with some stock prices dropping by half. As the world commodity boom and demand for energy continues to escalate, it is time to invest in Uranium while stocks are extremely cheap to reap the benefits of the rebound in Uranium prices.

Many analysts have stated that Uranium has hit a bottom and is ready for a rally as Demand from China, India and other expanding economies will continue to drive prices higher. Investors thinking about playing this scenario should look to Canada for Uranium investment opportunities as Canada is the largest producer in the World.

As a result of the price slide in Uranium there are many great bargains to invest capital. The following investments may be appropriate for those who believe in the long term appreciation of uranium prices:

Cameco (CCO): The stock is currently over 30% below its recent high in June.

Cameco is the worlds largest producer of uranium concentrates. Cameco Corporation (Cameco) is primarily engaged in the exploration for and the development, mining, refining and conversion of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries. Its mines are principally located in the uranium-rich Athabaska basin in northern Saskatchewan.

The Company has a 31.6% interest in Bruce Power L.P. (BPLP), which operates the four Bruce B nuclear reactors in Ontario. The Company wholly owns Zircatec Precision Industries, Inc., whose primary business is the fabrication of nuclear fuel bundles. Cameco's 52.7% subsidiary Centerra Gold Inc. (Centerra) is involved in the exploration for and the development, mining and sale of gold. Cameco has four segments: uranium, fuel services, nuclear electricity generation and gold. In June 2006, the Company acquired a 19.5% interest in UNOR Inc, whose principal properties are 226 mineral claims in northwestern Nunavut on the Hornby Basin.

Dension (DML): The stock is currently trading at over a 60% discount from its 52 week high.

Denison Mines Corp. (Denison), formerly known as International Uranium Corporation, along with its subsidiary companies and joint ventures is engaged in uranium exploration and production. The company’s principal assets are a 22.5% interest in one of the world’s largest uranium facilities at McClean Lake in Northern Saskatchewan and a 25.17% interest in the Midwest Uranium Project. Denison also has embarked upon an active exploration program at the McClean, Midwest, Wheeler River, Wolly, Waterfound and Mongolia properties.

Denison also acts as manager for Uranium Participation Corporation. Uranium Participation Corporation is a publicly traded company that is involved in the buying, holding and selling of uranium in concentrates.
Further, Denison is engaged in mine decommissioning and environmental services through its Denison Environmental Services (DES) division.


Uranium One Inc. (UUU): Currently trading at over a 22% discount to its 52 week high..

Uranium One, Inc., formerly SXR Uranium One Inc., is engaged through its subsidiaries in the acquisition, exploration and development of properties for the production of uranium in South Africa, Australia, Canada and the United States and gold in South Africa. The Company owns 70% of the operating Akdala Uranium Mine in Kazakhstan and is also developing the South Inkai and Kharasan Uranium Projects in Kazakhstan. Uranium One owns the Dominion Uranium Project in South Africa, as well as the Honeymoon Uranium Project in South Australia. In the United States, Uranium One has extensive property holdings in Wyoming, Texas, Utah and New Mexico, including the Shootaring Canyon Mill and the Hobson ISR facility. Uranium One is also engaged in uranium exploration activities in the United States, the Athabasca Basin of Saskatchewan, South Africa, Australia and the Kyrgyz Republic.


Paladin Resources (PDN): Currently trading at of a 40% discount to its 52 week high.

Paladin Resources is an Australian uranium exploration and development company. Paladin Resources Ltd operates in the resource industry, with a principal business of evaluation and development of uranium projects in Africa and Australia. Its wholly owned projects include the Langer Heinrich Uranium Project, which is located in Namibia, Southern Africa, and hosts surficial, calcrete type uranium deposit; the Kayelekera Uranium Project, which is located in northern Malawi, Southern Africa; the Manyingee Uranium Project, which is located in the north west of Western Australia, and hosts sandstone deposits, and the Oobagooma Project, which is located in the West Kimberley region of Western Australia, and hosts sandstone deposits. Its joint venture with Quasar Resources Pty Ltd covers two exploration licenses in the northern Frome Basin in South Australia.

An investor that wants be diversified within Uranium investments may want to consider investing in an investment vehicle such as The Uranium Participation Corporation (, which invests the majority of its assets in uranium.

How to compare Mortgage Products

The best way to compare mortgage products from various lenders is to make a Mortgage Comparison Chart. From the chart it is easy to compare the positive and negative features and characteristics of any mortgage. This will help an investor make informative decisions about which mortgage product best suits their risk level.

The following Mortgage Comparison Chart is only a brief method of analysis and you should consult with a mortgage professional. Completing a chart such as the following will help an investor make more informative decisions regarding debt financing before purchasing a property.

This examples draws on mortgage products offered by the Canadian Imperial Bank of Commerce (CM) and the Scotia Bank (BNS).

Mortgage Comparison Chart

Institution	CIBC	Scotia Bank
Mortgage	Better Than Prime Mortgage	Unlimited Rate Mortgage
Mortgage Features	Term: 5 years Closed Rate: Variable	Term: 3 years Closed Rate: Variable
Characteristics	Rate: 1.01% below CIBC Prime for first 9 months, 0.25% below CIBC Prime rest of 5 year term.	Rate: 0.25% below ScotiaBank Prime Rate for full 3 year term.
Current Prime Rate	6.25% APR	6.25% APR
Current Rate on Mortgage	5.24% (first 9 months) 6.00% (rest of 5 year term)	6.00% (full 3 year term)
Amortization Period	Up to 40 years (additional insurance charges apply)	Up to 40 years (additional insurance charges apply)
Payment Frequency	Weekly, bi-weekly, semi-monthly, monthly	Weekly, bi-weekly, semi-monthly, monthly
Payments	May fluctuate with changes in interest rates	Stay the same: if rates increase more of payment goes to interest, if rates decrease more of payment goes to principle
Flexibility	Lock in to a closed, fixed rate mortgage with a term of 3 years or more without prepayment costs. Prepay up to 15% of original mortgage amount annually without penalty. Original payments may be increased up to 100% during the term without penalties.	Early renew at any time to any closed term, fixed rate mortgage product with term of 3 years of longer with no interest penalty. Prepay up to 15% of original mortgage amount annually without penalty. Original payments may be increased by 15% each year for current term without penalties.
Special Deals		May choose between either 0.25% Below Scotiabank Prime Rate or Cash back of 1% of loan amount with Scotiabank Prime Rate * with cash back you must repay the prorata amount provided if the mortgage is paid out, assumed, transferred or renewed before maturity.