Today, I find myself reflecting on a world that’s far from perfect. Our investment decisions sit amidst global tensions, and while we’ve ‘been here before’ – it’s never been happening like this all at the same time.
50 years ago during Israel’s Yom Kippur period – out of the blue they were at war. This rhyming history isn’t ceasing despite our best intentions. Layered on top of what’s happening ‘out there’, are the everyday personal challenges that frequently test our mettle too. In this tangled up mess of global events and personal hiccups (like my own unexpected explosion of a hot water cylinder in a rental property last week), we’re reminded that remind imperfections invade our world almost daily. As I sat at a temporary stop sign last week on the way to work, these imperfections personified in the traffic cones and single lanes resulting from recent weather events, I couldn’t help but wonder: can we barricade negative thoughts as easily as we barricade a road? Can we divert the flow of our thought processes, finding alternative routes when faced with hurdles?
The Pax World Fund’s Vision
To understand the realm of investing in the context of our world’s imperfections, consider the Pax World Fund. Birthed in 1971 by Methodist ministers Luther Tyson and Jack Corbett, it was arguably the first socially responsible managed fund. At its core lay a simple conviction: avoid investing in companies linked to weapons and war-related commodities. They aimed to intertwine ethical convictions with investment strategies, signaling that it’s possible to align our wallets with our moral compass. Fast-forward five decades, and while the wars and battles have morphed, the quest remains the same: can our values still be mirrored in our portfolios, and if so, is it possible to gain a better return? Perhaps.
The Mental Terrain of Investment
For a moment, let’s swivel our attention from the large-scale socio-political arena to our personal experiences. The last time you were blind-sided by an unexpected event, be it a job loss, a health diagnosis, or any sort of betrayal – how did you respond? When the world throws us curveballs, do we succumb to pessimism, or do we channel our energy into finding solutions and opportunities? Much like mentally strategising to divert negative traffic in our minds, successful investing often demands a similar cognitive approach (Cognitive Financial Therapy?). Remember, wealth’s genesis is in the mind. It’s less about the tools or knowledge and more about the intrinsic motivation driving us. Before we can see tangible solutions, we must first envision them.
Investment Values in a Modern Context
Now, it’s essential to be clear: I’m not claiming our investment choices can singlehandedly combat global issues like climate change. How you marry wealth generation with ethical considerations remains deeply personal and that’s your job, not the job of a fund manager, KiwiSaver provider, or financial adviser. Yet, consider this: investing grounded in genuine values might, in the long run, bear richer fruits. The global financial stream is tilting, albeit slowly, towards appreciating the nuances of environmental, social, and governance aspects. Paul Brownsey, CIO of Pathfinder, a prominent New Zealand-based fund manager, talked to me recently in a podcast episode, shedding light on how these values play out in today’s investment world.
In our imperfect world, characterised by both global tensions and personal trials, our investment decisions are a reflection of our internal and external worlds. From the Pax World Fund’s ethics-driven inception to the cognitive strategies we employ in weaving through life’s challenges, investing remains dynamic . It’s influenced by both macro events and personal beliefs. So, whether you’re reflecting on a stop sign’s symbolism on your morning commute or contemplating the green currents shaping global finance, remember: investing, like life, thrives best when grounded in thoughtful reflection and genuine values.