Author Archive

Hal Brill

Welcome to my archive of newsletter articles and blog posts. For more information on my service offerings, please go to my advisor webpage.

2001: Bringing Consciousness to Capitalism

This article is from our archives as part of the 100th issue special, celebrating twenty-five years of quarterly newsletters. 

A reflection on how our founders came to “natural investing” over thirty years ago, planting the seeds for today’s vibrant Natural Investments group, which includes twenty advisors all across the U.S. helping clients manage a half billion dollars in regenerative and conscious capital.

Photo: Jack Brill, founder of Natural Investments, with his son and partner Hal Brill.

“Yes, this is Mr. Brill, rep number 638, with an order to sell 4,000 shares of Exxon at market.” I completed the trade for my client and stepped out of my office with a satisfied smile. I had just helped a conscientious investor divest herself from a company whose environmental transgressions offended her. And look where I was! The Wall Street clerk taking my order must have pictured me in a stuffy brokerage suite with ticker tapes flashing. But in 1992 I had taken refuge in a relic travel trailer parked on a friend’s high desert acreage outside of Santa Fe, New Mexico. Along the south side I built an arching sunroom with straw-bale walls. A 500-foot extension cord and phone line snaked through the pinyon and juniper trees, linking me and my laptop to the world. I wore Guatemalan shorts to work, not a pinstriped suit.

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1994: Viva South Africa!

This article is from our archives as a part of our 100th issue special, celebrating twenty-five years of quarterly newsletters. 

References to divestment as an advocacy tool appear throughout this anniversary issue, but the South Africa divestment movement of the 1980s is credited with being the first successful campaign by socially-conscious investors to help catalyze major political change—in this case, the end of apartheid.

For us, the biggest headline of last year was “Apartheid Dies!” The biggest success story for SRI unfolded, as the African National Congress called for lifting sanctions against South Africa. Apartheid is about to be buried, and the people of South Africa are on the difficult road toward democracy.

In 1982, the Calvert Social Investment Fund became the first mutual fund to avoid investing in companies doing  business in South Africa. The movement grew throughout the 1980s and added important financial clout to the struggle to end apartheid. SRI investors can take satisfaction from playing this critical role.

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Weaning Off Wall Street

Excerpted and adapted from The Resilient Investor by Hal Brill, Michael Kramer, and Christopher Peck

The world in which we live is volatile, uncertain, complex and ambiguous. There’s an unfathomable intertwining of relationships that underlie the global economy and the physical world, making predictions virtually impossible. As financial advisors, it hasn’t been easy for us to overcome our desire for certainty about where the world is heading. But once we acknowledged that the world may not be sitting on the most solid of foundations, and that our clients hold a range of views about our possible futures, it became essential to explore strategies that speak to both emerging innovations and local resilience.

Even a few years ago, such a multifaceted approach would have been impractical, as there were few opportunities to invest in alternative strategies. Today, we are energized by the explosion of socially responsible investing (SRI) options

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The Invisible Heart of Resilience

How Becoming Personally Resilient Helps Create a Resilient World

For those with even a cursory interest in economics, there is likely a familiar ring to the idea that pursuit of personal interests yields societal benefits. This is, of course, the message of Adam Smith’s “invisible hand of the market.” Unfortunately, it has become all too evident that a civilization based solely on competition and maximizing self-interest does not always create the desired benefits or distribute them equitably. In fact, it can frequently cause great harm to people and nature.

RI_invisible heart 1Nonetheless, as we have developed our new resilient investing framework, we’ve come to appreciate the nugget of truth in Smith’s teachings. What he lacked—or at least what is lacking in the way he is interpreted today—is a big enough perspective on what is meant by the pursuit of individual interests. By expanding the definition of what self-interest really means, the essence of Smith’s teachings may take on newfound relevance in a world searching for answers to complex challenges.

Here’s why: In our experience, when investors broaden their goals so that they focus not solely on their financial assets but their personal and tangible ones as well, as we outline in our resilient investing system, they tend to utilize strategies that enhance the health of the community and the environment. Conversely, investments that harm the fabric of society fall out of favor because by their very nature they make us less resilient. A deteriorating global environment and extreme levels of inequality are detrimental to everyone, and many investors understand the folly of profiting financially while furthering such negative trends.

We have coined the term Invisible Heart to reflect this larger view of self-interest. It does not ignore the financial realm but recognizes that a hand left to its own devices can be used for healing or can cause harm. A hand needs a heart to guide it. We are all connected in more ways than we can fathom; as more people recognize this, the ancient and universal wisdom of the Golden Rule—to not harm others—becomes a foundational principle that guides our decisions.

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Cuba: The Island that Capitalism Forgot

By Hal Brill and Allison Elliott

Looking out the bus window heading into Havana, we could tell that this was a different kind of place. There were no billboards, save for a few extolling the virtues of this proud and isolated country’s communist ideals. No strip malls or giant stores. For 54 years, the island has been an experiment in alternatives to capitalism. Allison and I had come to Cuba for the 11th International Permaculture Conference in Havana and we were looking forward to seeing the experiment up close.

Cuba field 1The Cuban experiment made a radical shift in 1989 when the Soviet sugar daddy collapsed, which cut off the subsidies it had enjoyed as a cold war puppet. Largely due to political pressure from Cuban-Americans in Florida, a strict trade embargo by the United States remained in place—and is still in effect today. Unable to afford the fuel, fertilizers and pesticides that had made industrial agriculture possible, Cuba was forced to go organic almost overnight. The dramatic decline in crop production between 1990 and 1994 was known as “the Special Period,” during which the average Cuban lost 20 pounds!

When it was recognized that industrial farming was no longer possible, the peasants were granted more control of over the land. With the help of the country’s agronomists, plant breeders, soil scientists, and hydrologists (Cuba has 2 percent of Latin America’s population but 11 percent of its scientists), farmers adopted a system known as Agro-ecology. Agro-ecology is a method that mimics natural systems to increase soil fertility and deal with pests. The techniques will be familiar to many of our readers: nitrogen-fixing beans replace the use of inorganic fertilizer; flowers are used to attract beneficial insects to manage pests; weeds are crowded out with more intensive planting. Cuba has largely recovered from those harsh times; it now only needs to import 16% of its food, whereas in the Soviet heyday it imported 70%. So although U.S. policies have caused severe economic hardships, one can’t help but be impressed with how the nation has pulled together.

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Investing with an evolutionary perspective

By Hal Brill

As investors, we strive to thrive in a future that will undoubtedly surprise us. To guide us, we assemble a view of the world that is as unbiased and complete as possible.  But this is harder than it seems – our perceptions and points of focus are shaped by our personal experience, cultural context, genetics, and more. We “see what we want to see,” then mistake that view for objective reality. Today’s diversity of media heightens this possibility – we can choose which blogs, websites, sources we wish to visit; generally we choose ones that reinforce our preconceptions.

HB evolutionaries WEBWe have discussed how “scenario planning” is an essential tool to help us question our own assumptions.  But as one begins the exercise of thinking deeply about the future, you may discover that some scenarios are harder for you to envision than others. I, for instance, have a certain resonance with scenarios that either extrapolate the future from the way things are now (we’ll keep muddling along), or in which some of the basic structures of modern life (economy and ecology) will collapse.

What I find difficult to lock into is a vision of the future that is both realistic and compelling – neither static, nor dreamy, nor dire. I’ve always thought of myself as an optimistic person; I’ve spent my life seeking out and weaving together the pieces of a sustainable future. So it’s humbling to discover how easily I can fall into a rather grim view of the future. Only recently have I concluded that I need to supplement my information-diet with regular infusions of inspiration!

Fortunately, there are plenty of ways to foster a clearer, more neutrally receptive stance. For me, the starting place is to clear my mind and center in the present moment. This tends to put me into a more heart-centered, receptive state of mind. Physical exercise, preferably out in nature, is always good medicine for me.  Simple steps like these bring a sense of calm and gratitude to my work in the world. This feels great and has all sorts of benefits, but it doesn’t get me outside of the mold that I identify as “me,” complete with well-worn points of view and comfortable habits. For that, I need an overarching worldview that helps me make sense of the bigger questions of life: Where did we come from? Where are we going?

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Rethinking Asset Allocation

By Hal Brill

The crucial role of asset allocation and diversification in conventional investment theory presumes that owning a range of financial instruments (stocks, bonds, CDs, etc.), as well as real estate, is the most prudent path to long-term financial security. For much of the 20th century, conventional wisdom (and historic results) held that the market would reliably rise by 7-10% per year. But starting with the dot-com boom, the good times of soaring stock prices have been followed by the bursting of bubbles.  Adding insult to injury for those with well-diversified portfolios, stocks were not alone in this—real estate crashed, bonds gyrated, and interest rates sank to near-zero.

Market volatility can be endured if there are long-term gains, but this hasn’t been the case thus far in the 21st century. From its dot-com peak on March 24, 2000 through April 30, 2013 (a time when headlines were bleating about the markets hitting new highs), the puny gains of the S&P 500 over that period were not enough for investors to break even when inflation is factored in. What has been called “The Lost Decade” for investors (the years 2000-2009 marked the first decade since the Great Depression that investors lost money over 10 years) has stretched to 13 years. Let’s see. . . virtually no overall return, amidst hair-raising volatility, infused with unending tales of corruption. Perhaps it IS time to think about some new strategies.

Total Asset Allocation—which we’re developing as part of our new book—expands the concept of diversification by drawing from three broad classes of assets: personal, financial, and tangible.  By climbing out of the box that confines investors to mainstream financial offerings, you’ll discover a big world beyond Wall Street that is much more diverse and interesting, less volatile, and maybe even fun! By moving beyond money alone, you will come to see that the ways you invest your time and energy on a daily basis can be integrated with your financial decisions so that they are all working towards the same goals. So let’s take a brief look at what’s included in each of these asset classes.

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Bringing it Home: Michael Shuman’s Challenge to Investors

By Hal Brill

It’s a wonderful gift to have an insight so powerful that it stays with you for decades, guiding your work and your life. Michael Shuman has pursued the grail of local economies for many years, with influential books that include Going Local and The Small-Mart Revolution, as well as a career that has launched some of today’s most important local economy networks. Many of us have eagerly awaited his new book because of its focus on local investing. So I jumped at the chance to review Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity.

ShumanWEBShuman has been involved in all aspects of strengthening local economies, from creating business alliances to exploring local currencies. In order for local economies to thrive amidst the spreading reach of global corporations, they need a robust financial engine that is sorely missing from today’s investment landscape. Local Dollars is his plea to investors to escape the trance of Wall Street and join the pioneers of local investing to grow this vastly under-utilized sector.

Reading this with the eyes of a financial advisor, I can see much that will be convincing to mainstream investors. One of the first things they’ll notice is that the foreword is written by Peter Buffet, son of Warren. Buffet’s words will surprise, centered on his solid support for local investment. He sees this as a return to values he grew up with that emphasized “real wealth over phantom wealth and long-term investing over short-term speculation.” He reminds us that local companies are the best job producers per dollar of investment. Shuman’s case for investors is a strong one.

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Investing with an evolutionary perspective

By Hal Brill

Now that we’ve outlived 2012’s end-of-world prophesies, the New Year beckons us to turn our attention towards the future. Our problems haven’t gone away, and neither have our opportunities. As investors, we strive to thrive in a future that will undoubtedly surprise us. To guide us, we assemble a view of the world that is as unbiased and complete as possible.

But this is harder than it seems – our perceptions and points of focus are shaped by our personal experience, cultural context, genetics, and more. We “see what we want to see,” then mistake that view for objective reality. Today’s diversity of media heightens this possibility – we can choose which blogs, websites, sources we wish to visit; generally we choose ones that reinforce our preconceptions.

We’ve discussed how “scenario planning” is an essential tool to help us question our own assumptions.  But as one begins the exercise of thinking deeply about the future, you may discover that some scenarios are harder for you to envision than others. I, for instance, have a certain resonance with scenarios that either extrapolate the future from the way things are now (we’ll keep muddling along), or in which some of the basic structures of modern life (economy and ecology) will collapse.

 What I find difficult to lock into is a vision of the future that is both realistic and compelling – neither static, nor dreamy, nor dire. I’ve always thought of myself as an optimistic person; I’ve spent my life seeking out and weaving together the pieces of a sustainable future. So it’s humbling to discover how easily I can fall into a rather grim view of the future. Only recently have I concluded that I need to supplement my information-diet with regular infusions of inspiration!

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The importance of investing

By Hal Brill

Back in 1989, I drove my VW bus to a dude ranch in Colorado to check out a conference about something called SRI – socially responsible investing. The premise was enticing – we could help people invest for their future while putting capital to work for a better world. Nothing could be clearer to this small band of visionaries. And nothing could be as daunting as trying to take on the all-powerful financial establishment.

CloudsBy some measures, SRI (now known as “sustainable and responsible investing”) has been a rousing success. Predictably, it was ignored by much of Wall Street, and attacked by others. Nonetheless, an entire industry of funds, advisors and researchers grew year-by-year. Early SRI investors were rewarded with competitive financial returns, so their ranks swelled beyond the true believers. Every major financial firm began catering to SRI investors, and the movement spread around the globe.

Then in 2008, a financial tsunami nearly took down the entire global system. This served as a giant wake-up call to Americans who saw their tax money used to rescue the gamblers and con artists deemed “too big to fail”. Arianna Huffington started a grass roots campaign called “Move Your Money.” The idea was simple: take your money out of the big banks and move it to local community credit unions and banks. It worked! By 2010, a Zogby poll found that nine percent of Americans had made the move, fueling strong growth of local financial institutions.

This is exciting stuff. From humble beginnings, millions of people now embrace the notion that their money can and must be directed with eyes wide open. Whether it is a $100 savings account, or an institutional-sized endowment fund, investors realize they can choose to manage their money in ways that reflect their values. It takes courage to stand up to powerful Wall Street interests. We are enormously grateful to all those who have heard the call. It feels a lot less lonely than it did back in 1989!

Investing in the Change We Want to See

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