The Universal Investor

From The Naked Corporation:

The Universal Investor owns a cross section of economy because they are so big or because that is their asset allocation. It no longer makes sense to pick winning and losing companies, their fundamental interest is in the health of the economy overall, which includes its long-term sustainability. Responsible fund manager should not only ensure that corporations operate in peak form but that the economy does too. It makes sense to consider a company's impact on the whole economy rather than on just its own bottom line. Corporations that captures short term gain at the expense of heavy external costs shouldn't be tolerated by the prudent universal owner.

I like this idea. When people become long term Universal Investors they naturally align themselves with what is best for the entire world economy over the long run.

I am not sure if explicit in the idea, but I would extend it to the entire world economy. A Universal Investor mutual fund could be created that invested as broadly as possible in the world economy. It could buy index funds such as the S&P 500 and its counterpart in each country around the world along with other financial instruments to mirror the state of the world economy as best as possible.

Some believe that people become rich at the expense of the poor, but a Universal Investor can only get rich if everyone gets rich as everyone gets the same "average" return. The only way to improve returns is to make the economy more productive through improved education and technology.

Competition is only beneficial to the extent it helps the overall good. A company that benefits at the at the expense of another (or one that wins zero sum games) is not valuable to a Universal Investor.

Over utilization of natural resources is detrimental to returns, so a Universal Investor believes in environmental stewardship. Business ideas that are not sustainable such as overfishing and over harvesting of forests have no benefit to the Universal Investor.

Promoting peace has a positive return on investment for the Universal Investor as wars destroy their assets.

One of the issues with privatizing Social Security is how to invest the money. One solution would be to allow people to only invest in the Universal Investor mutual fund. This give everyone a stake in health of the global economy and take care of the problem of an investor losing all of their money on a risky stock that doesn't pan out.

The more people become Universal Investors the better it will be for the environment, the world economy and world peace.