Can I make my portfolio terror-free?

Ethical investors care about many subjects - treatment of workers or the environment - but a growing area of concern is terrorism. Now, it's possible to make portfolios terror-free, says our Monitor panel. Julie Gorte, who has held numerous policy positions in and out of federal government, is director of social research for the Calvert Group ( www.calvert.com ). Adam Sheer is president of the Roosevelt Investment Group, the investment adviser to the Bull Moose Growth Fund, which bills itself as the only certified terror-free fund ( www.terrorfreeinvesting.com ). Here are excerpts of their comments:

Ms. Gorte: It really depends on what the act of terrorism is. After 9/11, certainly we saw an immediate downturn in air travel and then this long-term impact in the airline industry that still continues. The second ripple of the long-term impact is that it creates demand for technologies to combat or avoid or curtail acts of terror - for example, facial-recognition technology. So you see those things coming onto the market, maybe new investment opportunities.

Mr. Sheer: After 9/11, we looked at markets in England, Japan, and Israel and we saw that the first time a terrorist act occurred, the markets were impaired significantly. However, when we saw the subsequent attacks, we found that the markets got hurt less and less. So it's very interesting. Obviously, in the beginning, emotion is the biggest factor. But over time, it's earnings that drive the markets.

JG: Investors are very hard people to scare over a long period of time. They can be very volatile in the short run.

AS: Bull Moose Growth ... is a three-year-old fund. But in April of this year, we hired a company called Conflict Securities Advisory Group. They maintain a database of 450 public companies worldwide that have ongoing business operations in countries that our State Department says sponsor terrorism.

AS: Iran, Libya, Syria, North Korea, and Sudan.

0AS: Any business that has ongoing business activities there - as long as it's not purely humanitarian. So if it's a pharmaceutical company or a medical-device company and that's all they do, that would be allowed in the portfolio. However, any other company that has ongoing business activities we would not put in the portfolio. And that's simply because those companies are writing checks worth hundreds of billions of dollars to the regimes in those countries.

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