Conscious Investing: How the Money You're Spending Is Impacting Your Future

By Kathy Entwistle, Private Wealth Advisor Managing Director, Morgan Stanley

PHOTO: Polina Zimmerman for Pexels

WHAT JUST HAPPENED?????

So, 2020 has been a year that has brought us a pandemic, riots, confusion, unrest, and a lot of uncertainty. In just four short months we have seen a fast and furious drop in the stock market, only to see an equally unexpected turnaround. We have seen the Fed and the administration take unprecedented steps to support the economy. We have seen businesses close, record unemployment, and a parallel fear surrounding both our health and our livelihood. 

Where do we go from here? How can we possibly find the bright side to this economic disaster?  Well, we have seen a change. Change in the air quality, the water, and the environment. Who knew changing our behaviors would really have an immediate, visible impact? This is encouraging to so many of us. It gives us an opportunity to make a change in the areas that concern us and our financial wellness and health. With work from home, we have had time to reflect on and re-evaluate our priorities when it comes to our values and goals. 

We are rethinking what we want our lives to look like and reconfirming what really matters most. We are also reviewing our financial situation and considering how we can make decisions to both improve our financial picture and receive some form of a return on our “investment”. 

RETHINKING THE LIFE YOU WANT TO LEAD!!!

For the last few years, there has been an emphasis on providing support to women who are seeking ways to become independent and successful, whether that means creating a company or building a career. We have been talking about equal pay, social justice, and a number of topics that are resonating with us. We have been taking a chance on our ability as women to succeed –who better to invest in you than you?

The needle hasn’t moved nearly as fast as we would like to see it move. We are ready to see real results and I don’t think women collectively are willing to wait for decades to see change. So, maybe the pandemic has given us pause to reflect and to reset—to set the starting line of real change, real impact, real results. I think we are not only ready to do this, but we are also prepared to do so. 

We have been learning, sharing, growing and now it is time to put everything we know and everything we have learned into action. So, we have been investing in ourselves and our financial futures. But there is more to do and although we may be building a business, building our financial foundation, we still need to create and cultivate a life that is meaningful, rewarding, and impactful.

ARE YOU READY???

We can make an IMPACT with our voices, our time, our purchases, our donations, and our investments. 

Voices

By speaking about what is important to you and by sharing your ideas and listening to others’ ideas you are creating a community of change.  The first step is to recognize what needs to be changed and then the next step is to speak about these topics to help build awareness, collaboration, and potential solutions.

Time

By donating your time and being present in activating support around the causes that matter to you, you are helping to bring an inside perspective to the behind the scenes challenges, issues and needs of the organizations that matter most to you. It is also an opportunity to donate your services – your skillset, professional background to help these organizations operate more efficiently and effectively.

Purchases

When you go to the store or shop online, you have the choice to buy products from companies that align with your values.  It is very powerful to have individuals use their money to cast their votes. By avoiding products and services offered by companies that are not aligned with your values, you are sending a clear message that companies need to change and to have strong, consistent policies around the environment, social justice, diversity, or whatever it is that is important to you.  This will be motivating to these businesses to make a change.

Donations

You can also make an impact on an organization by giving money to the causes that are important to you.  Money is usually a scarce resource and is much needed to provide the organization the means to share its message and to implement its programs and services.

Investments

You can invest in the companies that align with your values and where you want to make an impact.  am going to go a little deeper into that!

Many of us are still uncertain about what exactly is sustainable investing. Quite simply put it is a way for you to stay true to your values by investing in what you care about such as specific causes, social issues, or change in behaviors while still expecting a return on your money.

There is a progression in how sustainable investing began and where we are today. 

1. Exclusion—You are choosing to exclude investing in companies that don’t reflect your values

2. Integration—You are choosing to integrate companies that reflect your values when it comes to the Environment, Social concerns, or Governance. This can be referred to as ESG investing.

3. Impact—You are choosing to make a measurable difference. A clear positive impact is part of the criteria for these investments.

THE END RESULT

The myths that you sacrifice performance, you can’t measure performance, or that you need to be an expert are just that—myths. Now is a great time to consider the different ways you can make an impact and “vote” with your money. 

By leading with purpose by re-allocating your resources to encompass social justice and equality, environmental stewardship, community resilience and more you have the opportunity to make investments that generate solutions to current events while remaining focused on achieving long-term impact and financial goals, and this is true now more than ever.

Over the last few months—through the onset of COVID-19 and in a movement to address diversity and equality—investing in companies that consider the environment, their employees, communities, and governance have created value. Now more than ever, it will be invaluable to make a mark and to work to educate, innovate, and inspire action to invest in a more just and resilient future.

About the Author

Kathleen Entwistle is a Private Wealth Advisor with the Global Wealth Management Division of Morgan Stanley in Paramus, NJ. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be appropriate for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC, or its affiliates.

Source: Forbes.com (April 2020). Top Women Wealth Advisors ranking was developed by SHOOK Research and is based on in-person and telephone due diligence meetings to evaluate each advisor qualitatively, a major component of a ranking algorithm that includes: client retention, industry experience, review of compliance records, firm nominations; and quantitative criteria, including: assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary, and advisors rarely have audited performance reports. Rankings are based on the opinions of SHOOK Research, LLC, and not indicative of future performance or representative of any one client’s experience. Neither Forbes nor SHOOK receives compensation from any party, including Morgan Stanley Smith Barney LLC, nor its Financial Advisors or Private Wealth Advisors in exchange for the ranking. For more information: www.SHOOKresearch.com

Morgan Stanley Private Wealth Management is a division of Morgan Stanley Smith Barney LLC. Member SIPC.

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