Just when you though woke politics couldn't infiltrate another area of your life, it reaches your retirement account. This week, a new Biden Administration rule takes effect allowing retirement fund managers to use environmental, social and governance (ESG) factors when choosing investments. Republicans are crying foul, saying this will subject retirement accounts to a woke political agenda. That is why 25 states, including Texas, are suing to block the new rule. Even Democrat West Virginia Sen. Joe Manchin is joining in opposition to the new rule.
Critics see this as yet another example of overreach by the Biden administration, with potentially harmful consequences to your finances. "The federal government is overstepping its bounds, getting too involved in people's decision making processes that need to be about profitability and rates of return, not politics," says Vance Ginn, Texas-based economist and financial consultant. "Whenever government gets involved and plays politics with people's money, it doesn't turn out well...it never has."
Ginn further warns this is not only inappropriate, but it is ineffective as an investment strategy. "What we've seen over time is that those more ESG-focused funds have lower returns than something like the S&P 500 or a standard investment fund," he tells KTRH. "So individuals really need to do their own diligence and make sure they do their homework before they get invested with a certain business, company, or with certain funds."
"This should ultimately be about individual choices, not about what government and politicians and bureaucrats think is best for people," Ginn continues. "But instead allow people to be empowered to do what's best for themselves."