The end of the year is upon us, which means long weekends and pie for breakfast. It is also time to wrap up your 2016 charitable giving before December 31st. If you plan to donate to Oregon cultural organizations, you may be able to make a matching gift to Oregon Cultural Trust and deduct it from your Oregon state taxes!
Charitable giving is one way to support causes that align with your values. In recent years, there has also been a lot of progress in values-based investing practices. Excuse our longer newsletter, but we think you’ll be fascinated! --Georgia and Team Modernist
Modernist takes it outside
Our resident boss lady Georgia Lee Hussey has been busy this fall! She was featured in Wildfang’s Free Speech event on October 26th. If you didn’t make it to the event – we missed you! You can listen to Georgia’s funny AND inspiring story here. (7 min)
She was also interviewed for Women Rocking Wall Street – a podcast run by Sheri Fitts, a local financial consulting superstar. Georgia shared her thoughts on the benefits she derives from her arts education as she runs Modernist. Click here to give it a listen! (35 min)
Nerds of note on sustainable investing
You may have heard of values-based investing and its many management permutations: SRI, ESG, sustainability, green, etc. There's the active approach of only buying stocks that match your criteria. Or, you can make a list of “undesirable” companies, industries or countries and exclude them. Or, or, you can adjust your exposure to companies based on their business practices. On top of that, the question of what’s acceptable is very personal.
At Modernist, all our portfolios seek to avoid the traditionally high costs of active management. The sustainability scoring system we use ranks companies on their business practices and adjusts their relative weight in the portfolio accordingly. This means we can “reward” companies in traditionally problematic industries who do better than their peers while maintaining broad diversification. The scores are largely based on greenhouse gas emissions, but also incorporate other environmental and social factors.
This is just one way to address the environmental impact of traditional investing; we're looking forward to seeing this field develop and flourish. The bottom line is that even a few years ago, this market was so small that it was hard to evaluate the options on the same merits as traditional investments. This is no longer the case. There are now options to help you meet your financial goals and uphold your values. And now feels like a good time to stand up for our values in every way we can.
If you are thinking about jumping aboard this train, here are a few things to keep in mind:
- What is the fund fee or expense ratio? Anything above 1% is high, below 0.50% is best.
- What is the turnover rate for fund holdings? High turnover rate can result in higher transaction & tax costs.
- Does the fund offer broad-based diversification? Top 10 stocks should make up no more than 10-20% of the portfolio.
In the spirit of Modernism, this month we embarked on an art “experiment” with Portland’s Upfor Gallery. We are the first business in their video art leasing program and the happy temporary owner of a mesmerizing piece by NY-based artist Ryan Whittier Hale. We invite you to visit the office and see it for yourself. We will have new work every month and hope that other offices will follow our lead in beautifying their big, and usually dark, conference room screens with art!
The 2016 election results were shocking to pretty much anyone who had read news or watched TV beforehand. And, by the looks of stock market futures, Wall Street was right there with us. However, by the morning after, the market was back in black.
This was another spectacular failure of “expert forecasts,” but there is a lesson here – trying to time the market is a fool’s errand. In the words of our Investment Committee, “we don’t stop buying toothpaste or going grocery shopping because of who sits in the Oval Office.” And the companies providing those products are likely to continue doing so. For a more in-depth take on this, read on here.