Fires in California Remind Us to Use Our Hearts and Heads

Fires in California Remind Us to Use Our Hearts and Heads

By: Joe Delaney At times like these, when record-breaking fire is again ravaging parts of California, we remember that our financial portfolios are not just numbers on paper. They are about protection for ourselves and our loved ones. They are also about our human desire to be good custodians of the world and empathic neighbors. Here in the San Francisco area, we at Lifeguard Wealth are having a lot of conversations with people about what they can do to help. We share our thoughts below. First, let’s summarize what’s happening in this state. Wildfire Update At the time of this writing, the Camp Fire in Butte County, northern California has become the most destructive and deadliest in California history, eclipsing last year’s Tubbs fire in Santa Rosa. CBS News reported on November 13th that it had burned through 130,000 acres and taken 48 lives. Meanwhile, the Woolsey and Hill Fires are burning to our south, northwest of Los Angeles. These have claimed over 100,000 acres and 2 lives. As always, high winds, high temperature and dry air are fueling this latest outbreak. Firefighters are doing their best to channel the blaze away from population centers, but many people have already lost their homes and business. There will be more destruction before this is over. How You Can Help (and Be Smart About It) There are many organizations you can support that are claiming to help. It is important to use both your heart and your head when the need is so great. If you do not have a personal relationship with a charity’s leadership, you must do your research...
The ‘Price’ of Socially Responsible Investing

The ‘Price’ of Socially Responsible Investing

By Larry Swedroe Socially responsible investing (SRI) has been referred to as “double bottom line” investing, meaning investments should not only be profitable, they should meet personal standards. For instance, some investors don’t want their money to support companies that sell tobacco products, alcoholic beverages or weapons, or that rely on animal testing in their research and development efforts. Other investors may also be concerned about environmental, social and governance (ESG) or religious issues. SRI and the broader category of ESG encompass many personal beliefs and don’t reflect just one set of values. SRI has gained significant traction in portfolio management in recent years. In 2016, SRI funds managed approximately $9 trillion in assets from an overall investment pool of $40 trillion in the United States, according to data from US SIF. While SRI and ESG investing continue to gain in popularity, economic theory suggests that if a large enough proportion of investors choose to avoid “sin” businesses, their share prices will be depressed. In equilibrium, the screening out of certain assets based on investors’ taste should lead to a return premium on the screened assets. Screened assets will have a higher cost of capital because they will trade at a lower price-to-earnings (P/E) ratio. Thus, they provide investors with higher forward-looking return expectations (which some investors may view as compensation for the emotional “cost” of exposure to offensive companies). Demand For SRI Rocco Ciciretti, Ambrogio Dalo and Lammertjan Dam contribute to the SRI literature with their June 2017 study, “The Price of Taste for Socially Responsible Investment.” They begin by observing that the demand for SRI can be explained...
Smart Philanthropy: Navigating Personal Values

Smart Philanthropy: Navigating Personal Values

By: Joe Delaney Those with a desire to utilize their wealth to enhance the lives of the less fortunate must always balance their charitable intent against their ability to maintain overall financial health. Philanthropy is not throwing money at charities at a whim. It requires careful planning that comes out of a genuine desire to make the world a better place and pass charitable values on to future generations. Below are key questions to discuss with your wealth manager as you make a philanthropic plan. Question #1: How much do I give? The simple answer is to not give more than you can afford to. You must consider charitable giving as part of a personal financial plan, and based on one of many important values. Stability, independence and family are some of the values that counterbalance charitable intent. Consider how sacrificing any of these would threaten the rest of the system. It’s important to make sure you can not only give now, but that you can continue to support the causes you are passionate about in the future. Question #2: How do I give? Giving Structure One approach, best for gifts of roughly $100,000 to $10 million, is to give through a donor-advised fund (DAF). These can be set up through a community foundation or National Donor-Advised Funds, such as Charles Schwab or Fidelity. The main benefits are simplicity, charity research tools and maximum impact, as the organizations dispensing the funds generally have very low overhead and allow you more control over how much you give. Alternatively, you can set up a private foundation, best for gifts of over...
Wrap Up Your Year-End Giving

Wrap Up Your Year-End Giving

By: Kathleen Longo Although the official start to the “Holiday Season” generally occurs on Thanksgiving weekend, the charitable component so often linked to this time of year is highlighted a few days later with #GivingTuesday, which fell on Dec. 1. If you don’t know already, #GivingTuesday, a relatively recent movement, was created in 2012 by New York’s 92nd Street Y in partnership with the United Nations Foundation as a response to consumerism and commercialization. The event takes place each year on the first Tuesday after Thanksgiving, providing a respite from Black Friday and Cyber Monday, and is designed to be a global day of giving through monetary donations, your time, goods and your voice. Following in that spirit of giving, and as the close of the holiday season draws ever nearer, here are some best practices to maximize your year-end charitable giving plans and to ensure that the organizations you select are aligned with your goals and values. What causes are most important to you? The first step in any charitable giving plan is to create a list of organizations you have given to in the past. At this point, take time to think about which causes are most important to you. The objective is to confirm that your philosophy of giving is still fully aligned with past recipient organizations. If you find that this isn’t the case, consider looking for a new organization to support. To continue reading, click here.   By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations...