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Community Bonds in Today’s Economic Landscape

Feb 13, 2017

community

What should we do with our money given the current political climate in the US and Canada? Whether you want to use your money to fight policy driven by climate-change denial, defund the oil industry and big banks, or you simply want to diversify and de-risk your investment portfolio, now is the time to buy community bonds. Here are five reasons why.

Uncertainty in global markets
The global economy is an incredibly complicated system of financial relationships. The value of stocks in an Ontario tech company might depend on the cost of a microchip that comes from China. And the cost of that chip might depend on the manufacturer selling 10 million units to the United States. And the United States’ ability to buy that many units might depend on its ability to sell 5 million units in Walmart stores in Mexico. But with the US’s now shaky relationship with Mexico, Walmart might decide not to buy 5 million units. Suddenly, the price of the Chinese microchip rises, the Ontario company loses sales to its competitor, and the stock drops.

As you can see, it’s tough to play the stock market in a global economy. And this is just a simplified picture; in reality, the value of a stock can depend on more variables.

For Ontarians looking for investments that don’t depend on wildly complex international markets and affairs, community bonds can be a solution. Community bonds earn interest stipulated by the bondholder agreement. Solar Bonds, for example, earn 5% and 6% interest per year regardless of what happens with the stock market.

Act by divesting
In a capitalist marketplace, consumers vote with their dollars.  The more gasoline we buy; the more money the oil industry has. And the more money we give to banks, the more we financially fuel the tar sands, deforestation, child labour, or other unethical capitalist and colonialist endeavors.

Divesting is taking money, and therefore power, away from the organizations and people who have proven themselves morally incapable of managing it. If you don’t like the way the world is going, don’t fuel it to get there. Instead of holding your funds with the bank, consider holding them in a community bond that supports something close to home. Many community bonds are even RRSP and TFSA eligible, so you can shelter the interest that you earn from taxes.

Act by investing
To divest is to stop fueling destruction. But there’s been so much destruction that we must now also do something to undo the harm caused. We need to invest in organizations and initiatives that are contributing to social and environmental good. Giving to charities, not-for-profits, and financing startups are all ways to do this. If you’re looking for a financial return on top of your people and planet returns, then community bonds are a great way to go.

Strengthen community
Broken communities are problematic and cause cultural, spiritual, and ethnic tensions.

Community bonds as investments yield community bonds. Community bonds are an immunization and antidote for divided communities because they bring a diverse group of people together in the name of social, environmental, and financial investment.

Strengthen local economies
Community bonds also work to strengthen communities by strengthening their local economies. Instead of investing in markets on the other side of our country or the world, community bonds are local investments that create local assets and local jobs, and keep Ontario dollars in our beautiful province.