Fair Trade Investing

Even the best professional investors find it very hard to beat the stock market when they're doing well. In fact, over 10-year periods, only a few percent of all money managers actually beat the market. And that market-beating includes investing in sin. That is, things like tobacco and oil and porn (Facebook, Google, Snap, etc.).

So when would-be do-gooders then layer on incremental friction in wanting those investors to only invest in "fair trade" companies, they are essentially donating investment returns to "fair trade" practices. That is, an unfair trade coffee picker pays market wages or whatever price it will take to get workers to show up, pick coffee beans, and load them in trucks. But fair trade coffee pickers are essentially an emerging market union where fair trade practices guarantee a kind of minimium wage to those workers.

Historically, fair trade companies perform a lot worse than those companies that ruthlessly seek profits. Treating people well is, of course, the right thing to do. But the question revolves around who should pay the extra money for fair trade investing v. just normal investing to win a profit.

Got any ideas? Tell us about it.