We know that the values-based investing landscape is littered with buzzwords, acronyms and jargon that, quite frankly, can be very confusing. In order to help you better understand how we think about values based investing, which we take to include SRI, ESG and Impact investing, we have provided a short primer below.
There is no shortage of information out there about due diligence on private assets and managers of private funds. When I started in the business many years ago, I remember receiving a research paper on the topic from Goldman Sachs, which amounted to a very long checklist of questions to ask to help vet a manager. As someone starting out in the industry, this was a great tool, but as I advanced in my career and met hundreds upon hundreds of managers in thousands of meetings, it became clear that there was much more to the due diligence process than could be captured in a checklist. As one of my mentors liked to say, “…our job is to be like Columbo, always looking behind the obvious facts to uncover the truth.” While we weren’t always prepared with a gotcha question to get to that truth, it was usually the diligence occurring outside the lines that yielded the best insights. With this series of articles, I will aim to add a different perspective to the academic literature on the topic by relating lessons that I have learned in the trenches. I will also provide some observations on interesting insights I have found through the thousands of human interactions I have had interviewing general partners (GPs).
The current level of the stock market is an enigma for many. Stocks appear to be reflecting rosy future growth projections and many large cap index funds are seeing their returns driven primarily by the growth of stocks like Apple, Google, Facebook, Netflix, Tesla, Microsoft and Amazon. For any new investor, this frothy environment represents a difficult starting point for their portfolio. The good news is that if you have a long term time horizon, namely more than ten year and up to 50 years depending upon your current age, the stock market is still a great tool for you to help grow your savings. Distortions within indices tend to be temporary and over the long term the index will readjust to reflect the performance of the index asset class.
The number one priority is to save as much as you possibly can. There are two ways to do this, one by increasing income the other by cutting expenses. Most people can't take on another job given their day job, but everyone can manage their expenses. Cut out extraneous expenses and live beneath your means. If you accustom yourself to living well without a lot of luxuries, you can save money and set yourself up to retire well and have some cushion for a few extravagances.
I am blessed to work with a great group of clients. Unfortunately, many of them have been through the process of losing a spouse. Every situation presents itself differently, and every widow or widower I speak with has dealt differently with the grieving process. This is to be expected as we are all individuals and the relationships we are losing were all built upon very different foundations. Thus, when I am asked for general advice about dealing with finances after a major loss, I usually hesitate as there is no one correct answer for everyone. But, there is one piece of advice that I have heard consistently from widows and widowers, namely, that you have time.
A while back I was quoted in US News and World Report in an article related to savings. Here is my sage advice:
"Something is always better than nothing; more is always better than less," says Jamie Ebersole, a certified financial planner in Wellesley Hills, Massachusetts.