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
Stock markets were generally higher over the waning months of summer, with stocks of large US companies for the quarter up by 7.7%, small U.S. companies up 3.6%, and foreign stocks up 1.4%. Bonds, broadly measured, were flat for the quarter, though down 1.6% so far this year.
Trade tensions have remained front and center in economic news as the administration has continued to press for additional tariffs, as announced during the quarter. However, vigorous growth of the U.S. economy,
The frontline battle over the limits of corporate power is turning into a full-fledged war, as the legislative and executive branches of the US government accelerate their push to deregulate companies and curb shareholder influence.
Shareholders like the ones we work with, of course, want companies to act responsibly and profit without exploiting employees, communities, and the environment. But we are up against corporations with an entirely different agenda— and with hefty lobbying budgets. In response to the sea change in Washington, socially responsible investors (SRI), including Natural Investments, formed the Shareholder Rights Group in 2016. Our mission is to defend the right of shareholders to engage with public companies on governance and long-term value creation. We hired attorney Sanford Lewis to
A little over one year ago, President Trump reaffirmed his intention to withdraw the United States from the Paris Climate Accord. As if on cue, an iceberg the size of Delaware broke away from the Larsen C ice shelf in Antarctica, where temperatures have risen nearly five degrees on average over the past few decades. And Hurricane Harvey, Hurricane Maria, and Hurricane Florence wrought unprecedented destruction in rapid succession upon Texas, Puerto Rico, and North Carolina, respectively.
Scientists and researchers are still working to measure the astounding human and environmental toll from the hurricanes, which are considered to be climate disasters due to their intensity. Hurricane Maria resulted in nearly 3,000 deaths and left Puerto Rico without electricity, telecommunications, or water services for months. Hurricane Harvey caused at least 100 recorded releases of toxic chemicals in a region with 500 chemical plants and 10 oil refineries. NASA’s satellite images of North Carolina after Hurricane Florence show inky black currents of organic matter—mostly sewage from massive chicken and hog farms in the area—seeping into the blue waters of North Carolina’s coastline.
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.