Reuters Money

“Locavesting”: Capitalism for Main Street

You’ve heard of eating local and shopping local –  now a new book urges you to take the same approach to your portfolio.  Locavesting: The revolution in local investing and how to profit from it guides readers through the idea that investing in local businesses, instead of faceless conglomerates, can not only benefit your local economy, it can boost your bottom line, too.

The book, by freelance journalist Amy Cortese, evolved out of a story she wrote on local stock exchanges in the wake of the financial meltdown.

“People were coming up with new ways to funnel more investment capital to the locally owned companies that create jobs and healthy communities and are too often ignored by the financial establishment,” she says. Locavesting is about restoring the bonds between investors and companies. “It’s capitalism for Main Street.”

Cortese gives Reuters an inside look at the world of locavesting and how you can get started.

The book really exposes the cracks in today’s financial system — how does it highlight the need for “locavesting”?

I think what the financial crisis did was strip bare the inner workings of Wall Street and expose just how greedy and self-interested it had become. And there was a stark contrast between what was happening on Main Street — where people were out of jobs, homes were being foreclosed, small businesses couldn’t get funding — and here you had the big bailout, and shortly afterwards, Wall Street came roaring back. It really exposed, for a lot of people, the dichotomy of Main Street versus Wall Street. And a lot of people, myself included, were looking for alternatives. The fact was, Wall Street was not taking care of Main Street — and neither was government, really. So if something was going to happen, people had to take it upon themselves.

Early in the book you pose the question, “What would the world look like if we invested 50 percent of our assets within 50 miles of where we live?”  Any ideas?