Did you know that you could use ESG and support conservative companies? It’s possible and we cover 5 simple steps on how you can start implementing Conservative ESG in your portfolio starting today.
1. Determine Your Basic Asset Allocation Plan
This guide is about implementing a values bias to your investments. There are plenty of resources on how to build a basic portfolio that balances diversification and risk, based on your goals. Do that first with your advisor or on your own.
2. Determine Your Values-Based Criteria For Investment
Where do you stand on abortion, 2nd amendment rights, free speech, immigration, global warming theory, foreign wars, foreign aid, equality of opportunity vs equality of outcome, gambling, porn and adult themes, tobacco, alcohol, and recreational drugs, family support (including LGBTQ, drugs, violence, and language)? Feel free to add any other issues that matter to you.
Another important aspect of corporate behavior to consider is political support. The companies you own may not be funding black lives matter directly, but they may be supporting politicians who are supporting these factions. Find out about political donations, fundraisers, etc., that these businesses may be making, and make sure they comport with your expectations.
3. Decide On Your Strategy
Are you going to refuse to buy companies that violate your values? Are you going to refuse to buy more of them? Are you going to reduce your current investment in them? Are you going to be an activist investor and hold evil companies in your portfolio, but use your ownership status as a shareholder to hold them accountable?
These are all viable methods. Make sure you know which one (or more than one) you will be using.
4. Implement Your Strategy
You can gather research and news information about companies online or you can use an advisor/fund to do it for you. Either way you will want to construct a portfolio of companies who have investment potential, but who do it ethically, according to your values.
Obviously the more you do it yourself, the more control you have. In terms of impact however, using an advisor and/or fund and pooling your dollars with other patriotic investors may be more effective. Constitution Wealth discovered this early on as we began this journey. Part of why woke ESG (aka mainstream ESG as opposed to conservative ESG) is so effective is that they have pooled capital into large fund firms who speak with one powerful voice. Pooling funds gives you a massive advantage, while offering less customization.
If you are going to be doing activist investing and demanding corporate accountability as a shareholder, you may wish to begin learning about how to pressure bad businesses to change their behavior. You can write about it, attend corporate board meetings, call the CFO, or do it through media appearances. It’s up to you or those you hire for the job.
5. Monitor Your Portfolio
Once you have set up your investments, you will need to monitor them. First of all, are they still aligned with your financial goals such as retirement, charitable impact, or education funding? Second, has company behavior improved or declined relative to the assessment you originally did?
You will need to make these assessments dynamically and act in response with buys, sells, and activism on a regular basis to have the most impact.
These 5 steps should give you a framework for thinking about how to use your hard earned savings to make the world a better place.
Please let us know if we can help.