Socially Conscious Investing

First let’s look at the phrase ‘socially conscious’. In its most basic form, it means to be aware of how your actions impact other people, places or things. A socially conscious person, for instance, would not throw trash out of his/her car window on the highway, because while it might benefit him/her to have a tidy car, it will make a mess out of the grounds along the highway. Nor, would a socially conscious person start a fire in a heavily wooded area during a draught, because, while it might benefit him/her in the short term, it could have a disastrous impact upon the environment for years to come. Acting in a socially conscious manner simply means ensuring that any and all of your actions do not inflict harm on people, places or things around you.

For some reason, in the world of investing, this is a really difficult concept for financial advisors and stock brokers to grasp. Case in point, do you really enjoy having your stock broker or financial planner make excuses about how an investment lost 20 – 30 – or even 50% of your original principal? Have you spoken to them about poorly performing investments and they advise you to ‘wait it out’? After all, it really does not matter to them whether or not you recover your losses; they earned their commission already. When you invest your hard earned money and they lose most or all of it; they are not acting in a socially conscious manner. They earned a commission while you lost your shirt; they gained in the short term and you are left with a long term destruction of your investment portfolio. Investing does not have to be this way!

How long would you last at your job if you continually lost money for your company? My guess is; not long. Yet, the average investor is very willing to place his/her hard earned money in mutual funds and pay a manager to lose money year in and year out. That does not make very much sense does it? I’m glad you agree.

You deserve to have financial advisor’s, who treat your portfolio as if it were theirs. The recent explosion in hedge funds demonstrates this quite clearly. Investors are becoming less willing to pay commissions to a broker who loses money. With a hedge fund, the manager does not earn any commissions unless you make money. So, as one might expect, the manager works very diligently to ensure the fund makes money. This is how every managed account should be treated.

How do Jerry and I do it differently? Well, first and foremost, we only place our clients in principal protected investments. While many of them offer above average returns, you can rest well at night knowing the dollars you invested will still be there, in tact, when you need them most. We only make money, if you make money. That’s the way it should be, shouldn’t it?

Raleigh Makarechian RFC® FMM™, founder and co-owner of Wealth2020, Inc., obtained a Bachelor of Science degree in Accounting from the University of Michigan, Ann Arbor. Ms. Makarechian has been in business and financial planning for over twelve years. As an alternative investment specialist, she reviews an investor’s entire portfolio and maps out a strategic plan to maximize investment returns and minimize tax consequences, during the entire life of the plan. She lectures on a regular basis to other professional investment groups and community social groups throughout the US.

She and her partner Jerry Gallegos have just completed their new book, Create Wealth On Auto-Pilot. You may preview it at invest-for-wealth.com invest-for-wealth.com