Our Resilient Investing Map (RIM) invites you to invest in your life in a way that recognizes and grows all of your assets. Indeed, the goal of resilient investing is to consciously and methodically spread your time and your money around the full Map, in order to nourish all the elements of your complete “net-worth.” This will include prudence with your money (Financial Assets), appreciation of your possessions and the built and natural world (Tangible Assets), and nourishing your relationships and inner growth (Personal Assets).
It may feel a little strange to think of, say, the ways you prioritize activities that enhance your child’s wellbeing, and the strategies you’re using to manage a brokerage account, as being parts of a unified investment system. We’re trained to think of these as very different kinds of decisions. But they are indeed related, as both are investments you’re making to bring about a desired result in the future.
Hope Credit Union mortgage client and first-time homeowner Melbatine Hunter. Photo courtesy Hope Credit Union.
As institutions that give profits back to their members rather than to shareholders, credit unions are usually a better banking option than megabanks. However, choosing a credit union is no guarantee that our money is being used most effectively in your communities. There are low-impact credit unions, just like there are low-impact banks.
Best-selling author and Natural Investments client Vicki Robin recently published a fully revised fourth edition of her classic book, Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence. With more than 1 million copies sold over the past 25 years, this book has guided countless people to take control of their spending, reduce debt, increase savings, and ultimately achieve financial independence. We are honored that Vicki asked us to collaborate on revising the last chapter of this edition, and we are grateful that she was able to take a short break from her book promotion tour to speak with us.
Diversification is, at its root, a response to the ancient admonition you might have learned from grandma: don’t put all of your eggs in one basket. If that basket drops they could all break, ruining your and grandma’s breakfast! This proverb can be traced back to the 17th century, and was popularized by Cervantes in Don Quixote. (Later, Mark Twain, ever the contrarian, proposed the exact opposite: “pull all your eggs in the one basket and—watch that basket!”
The wisdom of Cervantes goes nearly unquestioned today. Virtually every reputable financial firm teaches people about diversification, extolling the importance of spreading out risk. But—and this is an important but—we contend that however well intentioned, Wall Street’s version suffers from two major omissions: first, they focus solely on one’s financial instruments, and second, they can’t model the possibilities of Breakdown/Breakthrough, so they presume that we’ll be Muddling Through for the foreseeable future.
The community I call home, Duluth, MN, happens to be perched on a steep hillside that runs down to the shores of the largest freshwater lake in the world, Lake Superior. There’s hardly a place in town where you can’t turn around and see the lake stretching out across the horizon. With such an expansive geographical feature nearby, it’s not surprising that people who live here share a special affinity for the lake, borne out in the names of local businesses (Lake Superior Brewing Company, Lake Superior Garden Center), local colleges (Lake Superior College), and the plethora of Lake Superior tattoos that adorn the bodies of many young locals.
Because Duluth people love Lake Superior with such fervor, we were outraged when we read about a recent study published in the peer-reviewed journal Plos One that found eight of nine tap water samples taken from all five Great Lakes, including our beloved Lake Superior, contained plastics. It was especially alarming for the significant population of beer lovers in our community to learn that scientists also found micro-plastics in all of the 12 brands of beer brewed with water drawn from the Great Lakes.
FACTFULNESS: Ten Reasons We’re Wrong About the World – and Why Things Are Better Than You Think
By Hans Rosling
Hardcover: 352 pp. Flatiron Books
The conundrum about this book is that it really should be read by those folks who never read books. You know who I’m talking about. The late Hans Rosling, who died in 2017 after an impressive career in education and public health, urges us to let the data tell the story, rather than imposing a narrative based on our “dramatic instincts.” He highlights ten ways that our instinctual bias and craving for drama, similar to our craving for sugar and lethargy, undermine our wellbeing.
The stock market headed into summer on an up note, with large company stocks rising 3.4% for the quarter and small company stocks up 7.8%, though foreign stocks were down 1.2%. More interest rate hikes continued to weigh on bonds, which were off 0.2% over the three months.
The bond market is historically far less risky (volatile) than the stock market, though the market still does fluctuate. One of the key drivers of bond market fluctuations is movement in interest rates. The Fed, which sets short-term rates, has increased the rate twice so far in 2018 and has stated its intention to raise it twice more.
You may be wondering why a group of financial advisors who are on a mission to transform the world into a more equitable place would venture into the political arena. It’s a good question, and it’s one with an important answer. Right now, strategies for using investing as a tool for social change are under attack. The Security and Exchange Commission is trying to scare pension funds away from socially responsible investments by rolling back rules put in place during the Obama era. In Congress, Republicans are trying to strip
We hope by now some of our new readers are feeling eager to explore the soaring vision of resilient investing that most of our clients share. Be aware, though: if you want to be a resilient investor, you need a pioneering spirit. In these volatile, uncertain times, the old road maps that guided 20th century investors are no longer sufficient. The landscape has changed, and you’ll be traveling on new pathways that have yet to see much traffic. This can be disconcerting, as it lacks the appearance of stability. That Rock of Gibraltar was once an image of the financial industry, but turned out to be a mirage.
The uncertainty that plagues today’s investors became clear to us over the past several years, as clients and friends shared their notion that the world has come unmoored, and that “business as usual” is no longer a reliable anchor for making decisions about their investments, or their lives. While these wide-ranging conversations are often rich with insight and full of passion, our role as investment advisors asks us to act from an objective view of the world, free of personal and emotional bias. As you can imagine, this is no easy task!