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Towards a Better Future – Values Investing

Over the past 18 months or so we have been re-engaging in research to further our desire to invest in as socially responsible a way as possible.

Our main concerns in the past have been the lack of diversification available and the fact that no publicly traded company stands up to pure standards. The first obstacle can now be overcome. The second remains, but there are mitigating factors.

We have always operated with the view that we, and our clients, would rather invest in companies that are solving the environmental and societal problems we face if all else is relatively equal. The two primary issues that stand in the way of this goal (stated somewhat differently than above to add some color) are whether investment risk/return characteristics would have to be sacrificed, and the relatively uninspiring offerings to invest in. We have maintained a keen eye to these issues as the years pass, and are very excited that we now feel confident moving forward with changes to the stock and bond holdings in the portfolios we manage.

…more companies, both new and old, are realizing that the business opportunities of the future lie in solving the problems we face now.

Two factors have emerged to relieve the issue of a lack of diversification, which could result in a downgrade in the risk/return features of a portfolio. The first factor is that more companies, both new and old, are realizing that the business opportunities of the future lie in solving the problems we face now. Pollution mitigation, water purification, alternative energy and many other new industries are starting to spawn a large set of profitable businesses and business lines. The second factor is that companies are waking up to the fact that being good corporate citizens is a good business practice – avoiding lawsuits, bad press, and other threats to shareholder value make bottom-line sense. These changes have added to the number of companies that can be considered leaders in social responsibility.

In our opinion, the issue of purity of standards, and the relatively uninspiring list of company holdings that often appear in socially responsible funds still exists. This boils down to the fact that the world is a very complex place. As we stated above, no public company stands up to stringent tests of being “green”. Once a company has gone public it has grown to a size where it is completely interwoven with our current society – for better and worse. However, companies can change and by shareholders making their views known to company management we can advocate for our values.

The socially responsible mutual funds we employ in our portfolios use the collective strength of their clients’ investment capital to support positive changes in the companies they invest in. Some fund companies have focused on and developed expertise in, advocating for change in the companies whose stock they hold. This aspect has been the driving force behind our excitement. This allows for a much broader set of stock holdings than one might otherwise think of in a socially responsible portfolio, and reflects the complex reality of the world today. If shareholders demand change, companies will change, and that can change our future.

We would love to talk to you about your values and to share with you what we have learned about socially conscious investing; as well as learn from you on the subject. We will be phasing in our socially conscious holdings across client portfolios. As you see your holdings change please do not hesitate to contact us with any questions, concerns or thoughts.

As we have said repeatedly in the past, we believe that it is prudent to be invested in more than just stocks and bonds. We are ongoing believers in diversifying in many ways. Specifically our portfolios diversify by asset class (beyond stocks and bonds), geography, strategy, and time-frame. As always, please contact us at your convenience.

As Seen In

“Relating to our personal finances can be very destabilizing. Feelings of peace and confidence are often masked by obsession, uncertainty or fear. Most people have developed strong, habitual patterns with respect to their financial lives, including taxes. Mindfulness cuts through these patterns and can allow us to see money matters more clearly, and accomplish positive change.”

Solomon Halpern

New York Times logo for quote
The New York Times

“Mindfulness allows our personal experiences, narratives, and emotions to become valuable tools rather than distractions to our financial planning.”

Solomon Halpern

Mindful Magazine M logo

“There seems to be a lack of synchronicity, a separation from the financial self.”

Solomon Halpern

Wall St Daily


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