Value Investing & Investing With Your Values
In my Financial Freedom for Creatives Club and with my private clients, I teach Core Values.
Personally, each month, I embody each of my 10 Core Values the first 10 days of the month. What that means is I pick one of my values at the beginning of the day, and then during the day, I take action to embody that value.
For example, one of my values is FREEDOM. So, during the day, if I’m running errands, I’ll roll down the windows, play a song that I love and sing and dance in the car! The wind in my hair and the care-free attitude embodies freedom for me.
If my day is particularly packed, I’ll play a fun, upbeat song and dance around to it in my office.
Knowing and aligning with our values really helps us to feel most like our authentic selves and that always feels amazing!
Knowing our Core Values is also such a powerful way to make decisions, and this includes decisions about spending, whether it’s considering spending on a coaching program or where to invest your money.
Did you know that you can invest with your values and make money doing so?
It kinda goes against the whole “money is the root of all evil” belief, right? (And yes, I know that isn’t the actual quote in the Bible…but it’s the one that’s been perpetuated over and over again.)
So, how do you invest with your values?
Let’s start with high yield savings. Start by finding a high yield savings account with high interest at a bank that doesn’t invest in cheap prison labor or fossil fuels.
Here’s a list of environmentally friendly banks
Next, these days, you can go to certain platforms like Morningstar (an investment research and management services) and go to the category for Socially Responsible Investing, or SRI, which also stands for: sustainable, responsible and impact.
These socially responsible investments consider environmental, social and corporate governance, or ESG. They balance long-term competitive returns with positive social impact. Many SRI funds have beaten stock market returns, so you get to make money AND align with what you truly believe in.
Take for example, DFSIX (a sustainable fund) with DFEOX (a non-sustainable fund).
These are both mutual funds. They contain almost the same companies, with only a few companies swapped out for companies which meet certain standards for environmental, social and corporate government. Guess which one outperforms the other?
As you can see from the two charts above, DFSIX beats DFEOX every year except for 2022 and 2023 (only slightly). The fees are also similar, with DFEOX charging slightly less at 0.15%, while DFSIX’s expense ratio is at 0.17%.
So, why would you buy the less sustainable fund, if you actually make more, on average with the more sustainable one?
Well, you wouldn’t. However, if one had a much higher fee (expense ratio), then you would reconsider. Remember to always look at the fees or expense ratios, before you buy. Fees could lower your overall portfolio by hundreds of thousands or even by a million dollars, depending on how much you have in the portfolio.
Now, consider your core values. Write down any companies or ways to invest that match those core values. Ex: If you're not a meat eater, then perhaps you want to invest in Beyond Meat (BYND). If one of your core values is racial justice, there's a fund called the Impact Shares NAACP Minority Empowerment ETF (NACP). (Note: it has a high management fee.) Or if you want to see more women leaders, there's a fund called Fidelity Women's Leadership Fund (FWOMX) (also higher fees).
You can also check this site to see if your investments are aligned with your values. (Invest Your Values is a free online tool that analyzes the climate and social impact of thousands of U.S. mutual funds, ETFs, and 401k plans.)
Other platforms that helps you invest with your values:
Swell is an investment platform that helps you invest in portfolios of companies solving global challenges.
Ellevest is an all women investment platform with a focus on women and issues affecting them.
OpenInvest tailors your values to your investment portfolio by asking about your values and then tailoring it to your goals, risk tolerance and age.
Calvert Impact Capital is a nonprofit investment firm that’s raised billions to fight racial injustice, gender inequity & climate change. Invest as little as $20. You’ll get 3.5, 4 or 5%, depending on if you leave your money in for 1, 3 or 5 years. This is a GUARANTEED return, and you get to invest in organizations creating positive social and environmental impact
Finally, when it comes to investing, there’s investing with your values and then, there’s value investing. Value investing was developed in the 1920s at Columbia Business School by finance adjunct Benjamin Graham and finance professor David Dodd, although they never came up with the term.
In our more modern days, it’s associated with one of the wealthiest people in the world, Warren Buffet.
Buffet believes that the essence of value investing is buying stocks at less than their intrinsic value. He then further expands the concept of value investing with a focus on “finding an outstanding company at a sensible price” rather than generic or unknown companies at a bargain price…
…meaning finding the best quality stock for the best price… or if you’re thinking about shopping for designer clothes… it’s like the time I found this Miu Miu top at a vintage clothing store. What made it so special was that this top was from that season and still in the Miu Miu boutiques, but while it was selling for over $1000 in the boutique, I found it at this vintage store for about $50, and it was in PERFECT condition.
It also wasn’t just about it being a designer shirt. I actually don’t care about that so much. I love the style, and it was Made In Italy, and 100% silk, so the best quality. This is what we’re talking about when we’re talking about value investing. Since stocks are a slice of ownership in a company, find the best companies whose stocks are undervalued or at a “discount,” meaning the price is lower than what it normally may be or what research says it should be.
Does this make sense? Please let me know. If you want to learn more about stocks or investing, consider joining my Financial Freedom for Creatives Club.
With Love & Gratitude,
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