Money Matters: What makes your portfolio successful?

Years ago, in business school, I had to write about what makes a company a success. I believed (and still do) that companies with a clear mission and vision that drives everything they do will be successful. The company I wrote about was Seventh Generation, which provides plant-based products for consumers. Here is their mission.

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Their mission is derived from the Great Law of the Iroquois that urges the current generation to live and work for the benefit of seven generations into the future. To put another way, it means we should consider how every decision we make will affect the children 140 years into the future. That concept has stuck with me. It is a great way to live life and, as Seventh Generation the business has shown, a great way to run your business.

Could it also be a great way to manage your portfolio?

The answer is, yes it can. Aligning your social objectives with your financial goals goes by many names: socially responsible investing, ethical investing, impact investing, values investing and sustainable investing, to name a few. While the terminology may differ, the underlying goal remains the same. It is the practice of creating a more viable and equitable world by taking into account important factors like environmental, social and corporate governance (ESG) issues. It means building a portfolio of investments that align with what you feel is important for the next seven generations.

And, the popularity of ESG investing is growing. Responsible investment is now capturing more than $1 of every $6 in investable assets under professional management, which represents $6.57 trillion of assets. Although many want to build portfolios that match what is important to them, there is a concern that investors have to sacrifice returns in order to do so. While any strategy can lead to underperformance, studies show that responsible investing actually provides a benefit to investors over the long term.

To learn more about how to incorporate responsible investing into your portfolio, feel free to reach out to me at khillsley@rwbaird.com or 610-238-6636.

This post was written by Kristin Hillsley, a Women to Watch On-Air Contributor and Money Matters Blogger.

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