Good Morning America

Good morning America how are you, don’t you know I’m your native son . . .

It’s the 4^th of July weekend, the real start to summer. Lazy days, grilling, vacations, catching up on the books you wanted to read over the winter. Soak it up and enjoy. These are the days to remember . . .

I wanted to get a quick post out before the long weekend in celebration of summer and taking time off. According to a survey conducted by Staples Advantage, the business-to-business division of the office supplier Staples, 53% of American workers are burned-out and overworked. What is even more disturbing, according to the same survey, 86% of workers are happy and willing to work for a promotion within their organization despite being burned-out and overworked!

While I don’t dismiss the value of hard work and the importance of putting food on the table for your family, there has to be a balance between work and life and also greater emphasis on valuing what is truly important.

We all probably have different values and thoughts on what we want out of life. I won’t judge and say that one is better than another. But I do know that if you can’t go to work and have fun and find purpose in what you are doing every day, it’s time to rethink what you are doing with your time.

One of my mentors, Ari Weinzweig, has written and lectured extensively about the “energy crisis” in the American workplace. If you are working in an environment that does not provide a financially sound, supportive, sustainable way to be, you either need to foster change or find a workplace that does create positive energy. In order to have the power to create positive outcomes, we must have a stake in the outcomes.

This weekend tune out what doesn’t thrill you, fire up the grill, crack open a few cold ones (whatever your choice), and enjoy the time off with friends and family. Recharge your battery and ponder your own energy crisis at work and how you are going to fix it on Monday morning. (Need a little extra nudge getting to that vacation state of mind? Check out the latest post at Harvard Business Review’s “Work-Life Balance” blog: https://hbr.org/2015/06/get-in-the-right-state-of-mind-for-vacation.)

Have a safe and enjoyable 4^th!

Put Me In Coach

Last weekend I was listening to an interview with the famous golfer Gary Player on local sports talk radio. Player has a new book out, but what caught my attention was that he said he never worked with a coach when he was on the pro circuit. He went on to say that he doesn’t understand why today’s pros have a swing coach, a strength coach, and a nutritionist all on staff. Player feels that if a pro cannot fix his own swing or get in shape, he or she isn’t a top professional.

I couldn’t disagree more. There are very few people who can actually motivate themselves consistently to get better. On top of that, very few of us have the discipline to push ourselves to make that change. To take this even further, I have yet to meet someone who can objectively look at a situation and remove his or her own bias in making a decision or undertaking change. This is why we all need help and why we need coaching.

Take working out or training. You can join a gym, but gyms make their money betting you aren’t going to show up. You sign up after Christmas or before the summer when you need to get back in shape. You go for a week or two, but after that your credit card is billed every month and you are lucky if you show up once a week.

When do you actually show up on a regular basis? When you have hired a trainer/coach. A trainer holds you accountable to show up and do your work out. A trainer pushes you when you don’t want to do that extra burpee or sprint the last 100 feet. Despite what Gary Player thinks, most great athletes have a coach or multiple coaches to push them to be better!

The same could be said for investing and financial planning. Most of it is not rocket science. It’s common sense. The problem is that most of us don’t have the time or discipline to do it. More importantly, we as human beings can’t be objective in looking at our own financial lives. When was the last time you and your partner had an honest conversation about money, values, or retirement?  It’s not the type of conversation that we generally want to have. Americans spend more time planning a one-week vacation each year than looking over their finances—scary!

Last year Vanguard did a study outlining a financial advisor’s value. The company concluded that a good advisor could add 3% net value to returns, half of that coming from behavioral coaching. Investors by nature don’t like to sit still and let their investments work for them. There is a psychological need to move from one investment to another, chasing yesterday’s winner, which inevitably will be tomorrow’s loser. A good advisor/coach keeps his or her clients invested in a properly allocated portfolio according to their individual risk tolerance. Sometimes there is greater value in what you don’t do versus what you do. To quote financier George Soros, “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”

We are human beings, which is to say that in much of what we do, we could benefit from a second opinion. If you want to see better results in your golf game, health, or portfolio, it pays to work with a coach.

Your Value Proposition

Some of us hit the wall at different times in life. There is the proverbial wall that one hits during a running race or long bike ride, where you just run out of gas and can’t take another step or push the pedal one more time. Some of us hit the wall when we can’t take doing the same activity or job any longer. I hit the wall hard while working at JPMorgan. Going into work at 277 Park Avenue every morning zapped the life out of me, and I knew I had to make a change. A few weeks ago a good friend and client hit the wall in terms of how he wants his money invested. He no longer wants to invest in companies that negatively impact our environment and/or are involved with the manufacturing of guns or ammunition. A very noble and impactful decision.  

A few years ago it might have been a tall order to fill unless you had a multimillion-dollar portfolio and could hire several money managers to assemble it. According to the Forum for Sustainable Investing, nearly $7 trillion dollars are being invested today in responsible and sustainable investment strategies. The same study also states that nearly $1 out of every $6 is being invested in sustainable or socially responsible securities. Today there are several hundred investment options focused on environmental, social, and corporate governance (ESG) strategies.

The question for investors for many years had been “What do I have to give up in terms of performance to invest in ESG strategies?” There was a time when these investments’ performance lagged, but over the last few years, according to a Calvert Investments study, ESG strategies/securities/investments/portfolios have slightly outperformed the general global stock market. The stronger performance over the past few years may be attributable to energy stocks severely underperforming the general market because of falling oil prices, or could it be attributable to better security selection? Your guess is as good as mine. It is my opinion that today one does not have to sacrifice performance to invest in socially responsible, or “impact,” securities that are more aligned with his or her personal values.

While performance is certainly important and we want our money to grow, investing in ESG strategies has other benefits. Your money can have an impact on how companies act or invest. Your money can help bring about change! Two weeks ago, for example, Norway’s $890 billion government pension fund elected to divest itself from investments related to coal. The New York Times said it was “the biggest institution yet to join a growing international movement to abandon at least some fossil fuel stocks.” The issue of climate change will in the foreseeable future have a very big impact on companies that use or produce large amounts of fossil fuels and potentially on their stocks as well.

If you don’t think that investing in strategies that align with socially responsible values can cause changes in policy, you need not look further than the divestment efforts in the 1980s that eventually led to the end of apartheid in South Africa. Institutions and endowments can have a strong say in the way governments and businesses operate.

I hit the wall in terms of my own investment style 15 years ago. I realized that trying to outsmart the stock market was a loser’s game. If you have never read Burton Malkiel’s book, A Random Walk Down Wall Street, read it now—it is a great starting point to understand the fruitless exercise of picking stocks and trying to beat the market on a consistent basis. Whatever your values are, don’t be afraid to express them in terms of how you want your money invested. After all, it is your money.

Investing in the stock market involves gains and losses and may not be suitable for all investors. The investment’s socially responsible focus may limit the investment options available to the investment and may result in returns lower than those from investments not subject to such investment considerations