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.
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.
Capitalism, succinctly described, is characterized by the singular drive of corporations, entrepreneurs, and all business entities to maximize short-term income. When business seeks to maximize short-term income as its primary goal, societal wealth grows, but other bad things happen too….. This isn’t theory. It is happening right now, right here in the U.S. and everywhere, all of it.
SRI investors endeavor to invest in the best parts of the economy, that part of the economy that supports more people, more often, and more fairly, while damaging the environment less. Inevitably, though, their investment results are not that different from broader markets that reflect the overall economy.
“Our communities are experiencing unprecedented levels of gun violence. Enough is enough. First Affirmative will continue to avoid investment products that hold positions in firearm manufacturers, and has added screens to avoid retailers that do not meet high standards of care in the sale of these products,” said George Gay, CEO of First Affirmative