“In 1492, Columbus sailed the ocean blue…” Perhaps like me, you learned this catchy rhyme at an early age to help remember the year Christopher Columbus discovered the “New World.” An additional reminder of this discovery of course, is Columbus Day. Celebrated at the beginning of October for the past 85 years, it has more recently fallen out of favor as a federal holiday. Just last year, Indigenous Peoples’ Day was declared a federal holiday for the first time and observed on the same day. Despite its controversial nature, Columbus Day does serve as a significant reminder of the impact a single investment decision can make.
Funding a Voyage
The connection between Columbus Day and investing started with Columbus’ need for investors to fund his exploration. This funding ultimately came from the Spanish monarchs, King Ferdinand and Queen Isabella. Whether acting out of an interest in colonization, improved trade routes, or Spanish enrichment, Columbus gained Spanish favor by appealing to a particular set of values and vision for the world.
Before Spain finalized its agreement with Columbus though, he sought funding from several other countries as well. Two of these were Portugal and England. Imagine for a moment, if one of these countries had funded Columbus. South America would be vastly different today had Spanish influence been replaced with that of England or Portugal. Instead, two Spanish investors, willing to finance Columbus’ voyage, shaped a major part of the world for centuries afterward. Today, this type of intentional investment is referred to as values-based investing.
Exploring Values
Aligning values and investments has been an area of specialization for Evenkiehl, LLC since its founding. What does a values-based approach look like? We start with a values inventory to determine areas that are particularly important to you. Once individual values are identified, we construct a personalized portfolio with investments that align with those particular values.
A values-based approach doesn’t stop with simply picking investment funds. As part of a comprehensive approach, Evenkiehl, LLC helps clients apply their identified values to their whole financial life. This includes leveraging investments to support charitable giving and formulating retirement goals that create purpose and not just leisure. It means helping to establish an estate plan that not only clearly identifies beneficiaries but discusses their readiness to receive an inheritance. A values-based investing approach recognizes that values are an extension of the person. Any financial planning, therefore, should be a reflection of the client rather than a financial institution or formulaic financial plan.
Navigating Storms
Values-based investing also helps weather market volatility. Financing sea travel in Columbus’ day offered no guaranteed return on investment. Losing ships was common during the early years of exploration, and Columbus’ initial, and subsequent voyages, were plagued with difficulty. This inherent risk/reward tradeoff is true with investing today. The market has certainly made waves recently, and there were probably times this year that you looked at your portfolio and felt like the proverbial ship had sunk.
Even so, years like this demonstrate the benefit of not only a carefully constructed technical portfolio (read more about our approach here), but also a carefully constructed philosophical approach. Explorers used a number of navigation devices to help keep their ships on course: compasses, the stars, quadrants, etc. An individual value framework, used in values-based financial planning, is a modern-day navigational tool investors use to stay philosophically on course during market turmoil. The market will inevitably rock the boat, but continued investment in values-aligned companies and industries charts a steady philosophical course that helps weather these storms. Dare I say it keeps investors on an even keel?
A New Discovery
Much like Columbus didn’t actually discover a “new world,” values-based investing isn’t exactly a new world of investing either. Individuals have impacted history through investing for centuries. A values-based approach simply allows everyday investors to join past investors, like Ferdinand and Isabella, in shaping their world for the coming centuries. In the spirit of exploration and investing, consider another catchy rhyme this year… “In 2022, discover if values-based investing is for you…”
