Aligning Investments and Values

aligning investments and valuesEven before the 1971 founding of Pax World fund – the first socially responsible mutual fund in the United States – many people have wanted to make a difference with their dollars. The question remains, is there a practical way of aligning investments and values?

In the early days of socially-responsible investing (SRI), most of the strategies revolved around excluding “sin stocks,” primarily those associated with alcohol, tobacco, and gambling. The list of exclusionary stocks grew in the 1980s, adding oil and gas companies in the wake of disasters like India’s Union Carbide gas leak and the Exxon Valdez oil spill.

SRI has since evolved into an inclusive investment strategy with active management and deep research into companies that claim to be good corporate citizens. The emphasis is now on investing in companies with high marks for environmental issues, societal responsibility, and corporate governance (ESG).

The idea of influencing positive change in society through our investments is a noble pursuit. The premise of developing an ESG framework to analyze how a company measures up against its peers can provide a more holistic understanding of a company to complement its financial data.

There are obstacles, however, to obtaining good ESG data. Many companies are reluctant to add more data to their already long list of legally-required reporting and disclosures. Another problem is “greenwashing” – using public relations and advertising tactics to convey a more environmentally-friendly and socially-conscious image than is accurate. Plus, a standardized ESG rating system doesn’t exist; environmental issues, societal responsibility, and corporate governance have different weightings and levels of importance in each industry and to each investment analyst.

Historically, well-run companies with a holistic operational approach have always been a good long-term investment. As more companies begin to disclose accurate ESG metrics that can be more-rigorously applied to the investment process, companies with good ESG scores will ultimately attract investment dollars and prosper.

By |2021-11-09T08:51:56-07:00December 6th, 2021|Current Affairs, Investing|

An Eye on Inflation

an eye on inflationBy most measures, the economy is running hot. But even the casual observer can’t help but notice a strong economy can come with a down-side. Inflation is becoming more and more obvious, as we fill our gas tanks and are alarmed by higher prices of everyday items like groceries. Inflation had been for many years an afterthought, but now it is getting more mainstream attention as we all keep an eye on inflation.

The U.S. Bureau of Economic Analysis’s August reading of the core personal consumption expenditures (PCE) price index — the Fed’s preferred inflation measure — was up nearly 4 percent year over year, the highest inflation in three decades. September’s consumer price index, the more familiar CPI, rose 5.4 percent compared to a year ago.

The price of many basic family goods is up much more than that. For households earning the U.S. median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel, and housing, according to Mark Zandi, chief economist at Moody’s Analytics.

It’s causing many to ask if inflation will stay elevated or head back down toward the long-term trend. Economic analysts at The Vanguard Group believe inflation dynamics will be volatile in the short-term. This is mostly due to supply shortages and other economic disruptions caused by virus-related shutdowns and the subsequent re-opening. However, Vanguard believes by the end of 2022 inflation will decline back to the 2.5 percent neighborhood.

What can we do to control inflation? The answer is, of course, not much.

You can improve your odds of long-term financial success, though, by working with the right advisor. An independent, fiduciary advisor, like Perspective Financial Services, will help you map-out, document, and stick to a disciplined plan to get you through uncertain times.

By |2021-11-09T08:38:28-07:00November 22nd, 2021|Current Affairs, Financial Planning|

Uncover Fraud

Uncover FraudBeing cautious about fraud schemes can help keep you and your finances safe. To help you uncover fraud, here are a few common scams occurring today.

Romance scam: Criminals pose as interested romantic partners on social media or dating websites.

Tech support scam: Criminals claim to be technology support representatives and offer to fix non-existent computer issues.

Grandparent scam: Frauds pose as a relative – usually a child or grandchild – claiming to be in immediate financial need.

Home repair scam: Scammers appear in person and charge homeowners in advance for home improvements.

Investment scam: Criminals offer unsuitable investments, fraudulent offerings, and unrecognized products.

Uncover Fraud with These Scam Protection Tips

  • Search online for the contact information and the proposed offer.
  • Resist pressure to act quickly. Scammers create a sense of urgency to produce fear and need for immediate action.
  • Be cautious of unsolicited phone calls, mailings, and door-to-door service offers.
  • Never provide any personally-identifiable information or wire money to unknown or unverified people or businesses.
  • Ensure all computer anti-virus and security software are up to date.
  • If victimized, take precautions to protect your identity and monitor your accounts for suspicious activity.
Source: Arizona Bank & Trust

In this digital age, privacy requires extra effort for each of us. Read more tips about cyber-security in the article below.

By |2021-10-12T11:13:22-07:00November 8th, 2021|Current Affairs, Cyber Security|

2021 Tax Planning Update

2021 Tax Planning Update In December 2020, the $2.3 trillion Consolidated Appropriations Act 2021 became law and several provisions from the earlier Tax Cuts and Jobs Act were extended. Income tax brackets, eligibility for certain deductions and credits, and the standard deduction for income-tax payers all saw increases in 2021 as a result. Following is another important 2021 tax planning update.

Inflation Calculation Changes

Another significant change within the law relates to how the U.S. tax code calculates inflation. Traditionally, tax law has tied inflation calculation to the Consumer Price Index (CPI); this index measures the average change in prices paid by urban consumers on goods and services over time. Now, with recent tax reform, inflation is measured by Chained CPI.

According to TurboTax, the Chained CPI figure “measures inflation in a different, often slower way that accounts for consumers’ tendency to shy away from items that undergo a large price increase.” That means some taxpayers may get pushed into a higher marginal bracket than before, due to cost-of-living pay increases or other raises in income that outpace Chained CPI.

Q3 2021 Tax Planning Update

The third quarter is the time to assess your total estimated income, deductions, and credits for 2021. That way adjustments can be made before year-end to help reduce your overall tax bill. If you have questions or concerns, your Perspective advisor is available to help.

By |2021-10-12T10:57:04-07:00October 25th, 2021|Current Affairs, Taxes|