A Registered Investment Advisor

Value Investing is responsible for some of the world’s most significant fortunes; think Warren Buffett and Benjamin Graham. Traditional value investing consists of finding companies with a stock price that is cheap compared to it’s ‘intrinsic value’. Intrinsic value is investor’s parlance for finding companies that are good companies but are out of favor for one reason or another and an investor can expect that over time the market figures out that this company is more valuable that it’s current price indicates and the price will increase. Buy low, sell high. If only it was that easy. But traditional value investing is a topic for another time, right now I want to discuss the the New Value Investors, or more specifically the New Value(s) Investors.

Agucadoura_WindFloat_PrototypeThe New Values Investing, or more accurately “values-driven investing”, is shaping up to be a dominant force in the market. Values-based investing is the idea that an investor, given the option, should invest in companies, sectors, and industries that reflect their personal values – whether social, environmental, religious, or cultural. A person that cares deeply about workers rights would choose to avoid investments in companies that manufacture with child labor and seek out companies with ethical employee practices. A person that feels a deep conviction for the planet and the environment might avoid investing in fossil fuels and instead invest in alternative energy. A person that cares for people living in poverty in a developing country may seek to invest in emerging markets in companies that are likely to create local jobs.

The number one response I get when I first start talking to people about Socially Responsible Investing (which includes environmental, sustainable, corporate governance, & human impact considerations) is, “I didn’t know I could express my values through my investments (or 401k, or IRA).” Many people are familiar with the idea of ‘voting with your dollars’ by purchasing consumer goods from companies with values that align with their own, but fewer are familiar with the impact that investors can make by placing their investment dollars with companies whose values align.

SRI investing has come a long way over the last 20 years. Investors used to only have a few options to express their values when it came to mutual funds or index funds and the philosophy was marred by the idea that investors had to give up returns in order to invest with your values. Today, investors have an extensive number of options to express their views and the data is coming back at minimum SRI investing does not reduce returns and may improve long-term returns. Sound intriguing?

Part 2 of this blog will explore how to become one of the new values driven investors.

There are lots of resources out there to help investors express their values and we will be making these resources available on this blog as we go. If you have any questions please send inquiries to ryan[at]cascadefs.com.

Investment Advice is offered through Cascade Financial Strategies, a registered investment advisor licensed in Oregon and California (We also operate in other states under the “de minimis” exemption, meaning having five or fewer clients within that state).
An investment advisor or IA rep may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if they are excluded or exempted from the state’s investment advisor or IA rep requirements; and follow up, individualized responses to consumers in a particular state by investment advisor or IA rep that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, shall not be made without first complying with the state’s investment advisor or IA rep requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of an investment advisor or IA rep, please do not hesitate to contact your state securities law administrator.