SRI Investing

https://www.sriinvesting.com/blog-sri-investing/giving-to-charity-in-retirement-think-qcd/11/2021

Socially Responsible Investing | SRI Investing | Impact Investing Giving to Charity in Retirement – Think QCD When the 2917 Tax Cuts and Jobs Act raised the standard deduction for taxpayers to $24,000 for couples ($12,000 for singles), and lowered individual tax rates, an ancillary consequence was to reduce the tax benefits of making charitable donations. Fewer taxpayers were itemizing, which means their d

The Irony of Being an SRI Investor Today

Many of my clients, and investors in general, have been experiencing some cognitive dissonance in recent months during the pandemic. On the one hand, there is relief the markets have rebounded significantly from March’s panicky nosedive. On the other, high unemployment and widespread suffering in many parts of the U.S. are causing anxiety.

In some cases, there is a vague sense of guilt, as in: “I am a person who invests to encourage a more sustainable and vibrant economy that works for everyone. Why should I be doing so well now when so many others are suffering?”

Today, the net worth of American households in the aggregate (largely based on stock market and home prices) is very close to a record high. This compares favorably to the Great Recession of 2008-09, when both housing prices and the stock market fell dramatically at the same time. The housing market then, in particular, took years to recover, while homeowners struggled with maintaining their debt payments or lost their homes altogether.
The situation appears to be different in 2020. The stock market is being anchored by the world’s largest companies – , , , (Google), and * - companies that continue to prosper during the given widespread shelter in place recommendations and much less travel. Reflecting on the businesses these companies are in, the reasons for this seem obvious. Meanwhile, the industries that are suffering much more – hospitality, airlines, restaurants, and in person services – constitute a much smaller share of the market as measured by market capitalization. Millions of struggling small businesses are not represented at all.

The good news...

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The continues to tick upward, having completed a very strong August, this in the face of a continuing , very high unemployment, and widespread economic suffering. The media pundits are predicting doom from all angles……

The market is about to swoon again, and this time it will stay down. Lost jobs will never be restored. Negative interest rates are destroying your chance to save. The billionaires are buying . The banks are going under. One article I read recently attributes the following quote to Warren Buffet: “The U.S. debt isn’t going to be repaid; it’s going to be refunded……. you better own something other than debt.”

If you read too much of this, you might well conclude it’s time to convert all of your assets to cash and bury it somewhere safe. But wait, that won’t work either, because the coming runaway due to the Fed’s printing of money to pay the U.S. debt will soon make your worthless. And on it goes.

But let’s slow down and take a deep . Let’s talk about value for a bit. What is it that creates ? When people employ the earth’s resources and their own talents and creativity to make and offer products and services that are needed and useful to other people, value is created and enhanced. Humanity improves its lot as more people live better lives. Good businesses – , successful, profitable businesses – deliver on this while providing jobs for millions. They create and enhance economic value in society, and in the process, enhance their own value. They are good investments.

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