Shareholder advocacy is a valuable and particularly influential part of SRI. This is the process by which investors who own stock in a company express their opinions and values directly with the company through proxy resolutions, mailings and other communications, and negotiation. Recently, my friend Leslie Samuelrich, President of Green Century Funds*, visited me in New York. I’ve long been a fan of Green Century because of their commitment to shareholder advocacy, and Leslie and I talked about some of their current efforts and achievements.
While partisan politics rages everywhere in sight, the U.S. House of Representatives quietly—and nearly unanimously—passed a bill that would reform various aspects of America’s retirement laws. The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was approved by a 417-3 majority of legislators, and the Senate is expected to pass a similar bill by a similar margin in the fairly near future.
If you didn’t participate in the relatively recent crypto-mania that produced over 2,000 new cryptocurrencies and saw a huge runup in the price of Bitcoin and others, well good for you. You’re an investor who missed out on a market drop that exceeded the stock market decline in 2008-09.
There were alarmist headlines late last week about the inverted yield curve, something that can signal an upcoming economic recession. The media is quite good at sounding alarms. The implied investor reaction is to retreat to the sidelines until the economic bust is over and get back into the market once the yield curve has developed a healthy steepness.
Many investors apparently thought so. The S&P 500, on Friday, dropped 1.9%, as people reacted as if a recession would happen on Monday. Wise investing is not so simple.
SRI investors want to utilize their investments to contribute to a world and economy that is safer and generates more opportunities for everyone – in addition to providing for their own financial futures. It’s helpful to remind ourselves occasionally how it is we generate the investment assets that allow us to be SRI investors in the first place.
Needless to say, 2018 was a crazy year. The chaos in the country’s politics, fanned virtually every day by our Chaos-in-Chief, finally caught up to the stock markets in the last quarter. The markets narrowly avoided their first bear market since 2008-09 and have begun 2019 with the longest shutdown of the U.S. government in history. The shutdown is causing more economic damage every day and unless some sanity kicks in somewhere to restart government services, this alone could tip the country into recession, accompanied by that long-awaited, and anticipated, bear market.
Lately, we’ve been a bit spoiled. Market volatility, until 2018 (and especially in the last two months), has been relatively tame while trending up in recent years, making it easy for investors to focus on other life matters, knowing their portfolios have been doing fairly well. Yet things never really stay the same for very long, and now the markets seem to mirror the nation’s ongoing political chaos.
Shareowner advocacy is an integral and influential aspect of SRI, and it is currently under attack by the SEC under the Trump Administration. This letter from SRI Investing is to key senators addressing our concerns.
It has been quite some time since socially responsible impact (SRI) investing has been a fringe phenomenon - something only a handful of mission-based organizations and morally-conscious individuals engaged in because they cared as much about doing something decent with their money as earning a return on it. Today, SRI could more accurately be characterized as the single largest and most influential trend in investing, period.
If you’re the kind of investor who likes to worry, then October has given you plenty of stimulus. After this week’s declines in the popular S&P 500 index, the index has lost 8.8% in this month alone, wiping out all the gains that we’ve enjoyed this year, putting the index in negative territory. The once-soaring Nasdaq Composite Index of technology companies tumbled 4.4% on a single day this week. It’s time again to remind ourselves of some tried and true investment wisdom.