Connect with us


An Introduction To Impact Investing – Forbes Advisor – Forbes



#featured-partnersmargin-bottom:20px#featured-partners .featured-partners-card .left .heading-wrapper h2,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .label,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .value,#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta,#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2,#featured-partners .featured-partners-heading,#featured-partners .word-breakerword-break:break-word@media (-ms-high-contrast:none),screen and (-ms-high-contrast:active)#featured-partners .featured-partners-card .left .heading-wrapper h2,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .label,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .value,#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta,#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2,#featured-partners .featured-partners-heading,#featured-partners .word-breakerword-wrap:break-word;word-break:keep-all#featured-partners img.lozadvisibility:hidden#featured-partners img.loadedvisibility:visible#featured-partners .featured-partners-headingfont:700 24px/34px EuclidCircularB,sans-serif;color:#333;margin:0 0 20px;border:none;padding:0@media (max-width:1024px)#featured-partners .featured-partners-headingfont-size:18px;line-height:28px;margin-bottom:5px#featured-partners .featured-partners-containerbackground:#fcf9f1;padding:14px#featured-partners .featured-partners-card .inner-wrapperdisplay:flex;justify-content:space-between;background:#fff;border:1px solid #c3cce5;border-radius:5px;padding:30px 20px;position:relative#featured-partners .featured-partners-card .leftwidth:calc(100% – 420px);padding-right:40px@media (max-width:1024px)#featured-partners .featured-partners-card .leftwidth:100%;padding-right:0#featured-partners .featured-partners-card .left .heading-wrapperdisplay:flex;align-items:flex-start#featured-partners .featured-partners-card .left .heading-wrapper pfont:15px/19px EuclidCircularB,sans-serif;color:#fff;letter-spacing:-.5px;background:#3d4a85;min-width:24px;height:24px;border-radius:50%;display:flex;align-items:center;justify-content:center;margin:6px 0 0#featured-partners .featured-partners-card .left .heading-wrapper h2font:700 28px/34px EuclidCircularB,sans-serif;color:#333;margin:0 0 0 10px;border:none;padding:0#featured-partners .featured-partners-card .left .partners-statsmargin-top:44px#featured-partners .featured-partners-card .left .partners-stats .stats-wrapperdisplay:flex;justify-content:space-between;align-items:center;border-bottom:1px solid #c3cce6;padding:10px 0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper:first-of-typepadding-top:0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper:last-of-typeborder-bottom:none;padding-bottom:0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .labelfont:12px/16px EuclidCircularB,sans-serif;color:#333;width:50%;padding-right:10px;opacity:.6;margin:0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .valuewidth:50%;font:16px/20px EuclidCircularB,sans-serif;color:#333;margin:0;text-align:right#featured-partners .featured-partners-card .rightwidth:420px@media (max-width:1024px)#featured-partners .featured-partners-card .rightwidth:100%#featured-partners .featured-partners-card .right .heading-wrapperdisplay:none;justify-content:space-between;margin-bottom:10px#featured-partners .featured-partners-card .right .heading-wrapper .heading-textdisplay:flex;margin-right:10px;width:100%#featured-partners .featured-partners-card .right .heading-wrapper .heading-text pfont:15px/19px EuclidCircularB,sans-serif;color:#fff;letter-spacing:-.5px;min-width:24px;height:24px;border-radius:50%;margin:2px 0 0;background:#3d4a85;display:flex;align-items:center;justify-content:center;flex:0 0 auto#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2font:700 22px/26px EuclidCircularB,sans-serif;color:#333;margin:0 0 0 10px;border:none;padding:0@media (max-width:1024px)#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2font-size:18px;line-height:22px#featured-partners .featured-partners-card .right .heading-wrapper .logobackground-position:50%;background-repeat:no-repeat;background-size:contain;height:50px;width:140px;max-width:100%#featured-partners .featured-partners-card .right .logo-wrapperdisplay:flex;align-items:center;justify-content:space-between#featured-partners .featured-partners-card .right .featured-partners-card .right .logo-wrapper .phone-numberborder:1px solid #c9c9c9;border-radius:10px;width:218px;height:50px;display:flex;align-items:center;justify-content:center;padding:0 10px;font-weight:700#featured-partners .featured-partners-card .right .logo-wrapper .phone-number spanfont-family:EuclidCircularB,sans-serif;font-size:16px;line-height:20px;color:#000;margin:0;display:flex;align-items:center;text-decoration:none#featured-partners .featured-partners-card .right .logo-wrapper .phone-number span acolor:#000#featured-partners .featured-partners-card .right .logo-wrapper .phone-number span svgmargin-right:10px#featured-partners .featured-partners-card .right .logo-wrapper .logobackground-position:50%;background-repeat:no-repeat;background-size:contain;height:50px;width:140px;max-width:100%#featured-partners .featured-partners-card .right .btn-wrappermargin-top:20px#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-ctamin-height:80px;box-shadow:0 4px 12px rgba(0,0,0,.2);border-radius:10px;background:linear-gradient(0deg,#35b782,#35b782),#35b782;display:flex;align-items:center;justify-content:center;transition:all .2s ease;padding:25px 10px@media (max-width:1024px)#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-ctamin-height:50px;padding:10px#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta:hoverbackground:#32a274;text-decoration:none#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta spanfont:500 20px/30px EuclidCircularB,sans-serif;color:#fff;font-weight:700#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta span svgmargin-left:8px;height:14px;width:14px#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtextfont:400 10px/13px EuclidCircularB,sans-serif!important;text-align:center;color:#333;margin:10px 0 0!important@media (min-width:1024px)#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtextfont:400 12px/15px EuclidCircularB,sans-serif!important#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtext spanfont:400 10px/13px EuclidCircularB,sans-serif@media (min-width:1024px)#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtext spanfont:400 12px/15px EuclidCircularB,sans-serif@media (max-width:1200px)#featured-partners .small-container-width .featured-partners-card .inner-wrapperflex-direction:column-reverse#featured-partners .small-container-width .featured-partners-card .leftwidth:100%;margin-right:0#featured-partners .small-container-width .featured-partners-card .left .heading-wrapperdisplay:none#featured-partners .small-container-width .featured-partners-card .left .partners-statsmargin-top:16px#featured-partners .small-container-width .featured-partners-card .rightwidth:100%;padding-right:0#featured-partners .small-container-width .featured-partners-card .right .heading-wrapperdisplay:flex#featured-partners .small-container-width .featured-partners-card .right .logo-wrapper .phone-numberwidth:100%#featured-partners .small-container-width .featured-partners-card .right .logo-wrapper .logodisplay:none@media (max-width:599px)#featured-partners.single-featured-product .featured-partners-card .right .heading-wrapperflex-direction:column#featured-partners.single-featured-product .featured-partners-card .right .heading-wrapper .heading-textmargin-bottom:10px#featured-partners.single-featured-product .featured-partners-card .right .heading-wrapper .logomargin:0 auto#featured-partners.single-featured-product .featured-partners-card .right .logo-wrapperheight:50px@media (max-width:1024px)#featured-partners.single-featured-product .featured-partners-card .right;height:auto#featured-partners.multi-featured-products .featured-partners-containerdisplay:flex;padding:14px 7px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-cardpadding:0 7px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .inner-wrapperjustify-content:flex-end;flex-direction:column-reverse;padding:35px 20px;height:100%@media (-ms-high-contrast:none),screen and (-ms-high-contrast:active)#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .inner-wrapperheight:auto@media (max-width:1024px)#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .inner-wrapperpadding:25px 10px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .leftwidth:100%;padding-right:0#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .left .heading-wrapperdisplay:none#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .left .partners-statsmargin-top:16px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .rightwidth:100%#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .heading-wrapperdisplay:flex;align-items:flex-start#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .logo-wrapper .phone-numberwidth:100%#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .logo-wrapper .logodisplay:none#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .btn-wrappermargin-top:12px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-ctamin-height:50px;padding:10px;width:100%#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-cta spanfont-size:16px;line-height:30px@media (min-width:1024px)#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-cta spanfont-size:17px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-cta span svgheight:12px;width:12px#featured-partners.count-1 .loaderdisplay:none#featured-partners.count-2 .featured-partners-cardwidth:50%#featured-partners.count-2 .featured-partners-card .inner-wrapperpadding:20px!important#featured-partners.count-2 .featured-partners-card .right .heading-wrapperalign-items:center!important;margin-bottom:15px#featured-partners.count-3 .featured-partners-container .featured-partners-cardwidth:33.33333%#featured-partners.count-3 .featured-partners-container .featured-partners-card .inner-wrapperpadding:25px 15px#featured-partners.count-3 .featured-partners-container .featured-partners-card .heading-wrapperflex-direction:column#featured-partners.count-3 .featured-partners-container .featured-partners-card .heading-wrapper .heading-textmargin:0 0 10px#featured-partners.count-3 .featured-partners-container .featured-partners-card .heading-wrapper .logomargin:0 auto#featured-partners.count-4 .featured-partners-containerflex-wrap:wrap@media (max-width:1024px)#featured-partners.count-4 .featured-partners-containerflex-wrap:nowrap#featured-partners.count-4 .featured-partners-container .featured-partners-cardwidth:50%;margin-bottom:14px#featured-partners.count-4 .featured-partners-container .featured-partners-card:nth-of-type(3),#featured-partners.count-4 .featured-partners-container .featured-partners-card:nth-of-type(4)margin-bottom:0@media (max-width:1024px)#featured-partners.count-4 .featured-partners-container .featured-partners-cardmargin:0;min-width:250px#featured-partners.count-4 .featured-partners-container .featured-partners-card .inner-wrapperpadding:20px#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapperalign-items:center;margin-bottom:15px#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapper .heading-text h2font-size:20px;line-height:24px@media (max-width:1024px)#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapper .heading-text h2font-size:18px;line-height:22px@media (max-width:1024px)#featured-partners .featured-partners-container .featured-partners-cardmargin-right:0#featured-partners .featured-partners-container .featured-partners-card .inner-wrapperpadding:25px 10px;flex-direction:column-reverse#featured-partners .featured-partners-container .featured-partners-card .leftmargin-right:0#featured-partners .featured-partners-container .featured-partners-card .left .heading-wrapperdisplay:none#featured-partners .featured-partners-container .featured-partners-card .left .partners-statsmargin-top:16px#featured-partners .featured-partners-container .featured-partners-card .right .heading-wrapperdisplay:flex#featured-partners .featured-partners-container .featured-partners-card .right .logo-wrapper .phone-numberwidth:100%#featured-partners .featured-partners-container .featured-partners-card .right .logo-wrapper .logodisplay:none#featured-partners .featured-partners-container .featured-partners-card .right .get-estimate-ctaheight:50px#featured-partners .featured-partners-container .featured-partners-card .right .get-estimate-cta spanfont-size:16px;line-height:30px#featured-partners .featured-partners-container .featured-partners-card .right .get-estimate-cta span svgheight:12px;width:12px#featured-partners.multi-featured-products .featured-partners-containeroverflow-x:auto#featured-partners.multi-featured-products .featured-partners-container .featured-partners-cardmin-width:250px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .heading-wrapperflex-direction:column#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .heading-wrapper .heading-textmargin:0 0 10px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .heading-wrapper .logomargin:0 auto.loaderposition:absolute;left:0;top:0;width:100%;height:100%;background-color:#fff;z-index:9;padding:35px 20px;border-radius:5px.loader__blocksbackground-image:linear-gradient(90deg,#f4f4f4,hsla(0,0%,89.8%,.8) 40px,#f4f4f4 80px);background-size:600px;-webkit-animation:shine-avatar 2s ease-in-out infinite;animation:shine-avatar 2s ease-in-out infinite;border-radius:5px.loader__headerheight:30%;margin-bottom:10px.loader__phoneheight:10%;margin-bottom:12px.loader__ctaheight:10%;margin-bottom:10px.loader__attrheight:45%@-webkit-keyframes shine-lines0%background-position:-100px40%,tobackground-position:270px@keyframes shine-lines0%background-position:-100px40%,tobackground-position:270px@-webkit-keyframes shine-avatar0%background-position:-32px40%,tobackground-position:400px@keyframes shine-avatar0%background-position:-32px40%,tobackground-position:400px

Impact investing is a strategy that aims to deliver positive returns for both your portfolio and society as a whole. The impact investing approach is becoming ever more popular among investors today, especially Millennials and Generation Z.

What Is Impact Investing?

Impact investing is when investors pursue strategies that create positive environmental or social benefits, in addition to strong investment returns.

“[Impact investing] provides a way for investors to be more proactive with their investment dollars and partner together to make purposeful investments that can contribute to affecting real change across the globe,” says David Spika, president and CIO at GuideStone Capital Management.

It’s important to note that an impact investment is not an act of charity. Impact investors are always hoping to turn a solid profit and even beat the market. It’s just that they have additional goals that transcend the pursuit of maximum returns on investment.

Let’s say you had a choice between investing in a big oil company or a solar panel startup. If you took the standard investing approach, you’d only consider which choice offered the best financial return. An impact investor would also take into consideration the environmental impact of both businesses, together with their potential returns.

An impact investor would choose the solar panel company, especially if the expected return is similar. If the oil company offered superior ROI, an impact investor might still opt for the solar panel company, due to its positive environmental impact compared to oil.

.myfi-widget-mb-0 iframe margin-bottom: 0px !important;

Impact Investing Examples

Impact investing covers a range of different assets and investment strategies. Essentially, any investment that is trying to meet the goal of profit plus positive social or environmental outcomes could be considered a form of impact investing.

Some examples of impact investing include:

  • Investing in the stock of a technology company that’s looking to develop better water treatment and purification techniques.
  • Buying mortgage-backed securities whose goal is to fund affordable housing for low-income communities.
  • Setting up private investment notes to finance resources for low-income communities, like substance abuse treatment facilities and employment centers.
  • Offering loans to support small business owners in developing countries through a microfinance impact fund.
  • All these investments follow a goal to improve the world, but they also have the potential to generate a profit, too. To reiterate, it’s not charity.

Impact Investing vs Other Responsible Investing Strategies

Impact investing is not the only strategy for putting your money to work in support of positive social and environmental values. You might have heard of other responsible investing approaches, like SRI Investing or ESG investing.

Impact Investing vs SRI Investing

SRI investing stands for socially responsible investing. This approach looks to put your money in companies that support your moral values while avoiding those that do not.

“Compared to impact investing, SRI investing is generally more exclusionary in nature, meaning specific investments are restricted if they are not compatible with a defined set of principles or ethical guidelines,” says Spika. For example, an SRI investment strategy may aim to avoid putting money in oil, tobacco or gun companies, depending on the investor’s values.

“This approach tends to place greater focus on a more basic ‘do no harm’ philosophy and doesn’t typically take the overt step of seeking organizations that proactively attempt to be positive contributors to society,” he notes. Impact investors on the other hand are generally more proactive in finding investments that actually create positive change versus just avoiding ones that cause harm.

Impact Investing vs ESG Investing

Investors hoping to positively impact the world through their investments may also consider environmental, social and governance (ESG) investing. Under this approach, investors look to score investments based on the impacts companies have on the environment and society as well as how the company is run internally.

ESG investors aim to make investments that ESG ratings agencies judge as performing high in each of the three categories while avoiding those that do poorly. Compared to impact investing, once again the focus is more on avoiding poorly scoring investments whereas impact investors are more proactive in creating positive change.

Impact Investing, ESG and SRI Have a Lot in Common

Nevertheless, there’s a lot of overlap between impact investing, SRI investing and ESG investing, which sometimes creates confusion among investors new to the space.

“The issue in the U.S. lies in the fact there are currently no uniform rules or definitions around what this type of investing really means,” says Daniel Milan, managing partner and investment advisor at Cornerstone Financial Services. He notes that some bad actors also know these systems and try to game their ESG score.

Related: Why Do ESG Funds Own Shares Of Facebook?

“Making matters worse, some firms get crafty when it comes to SRI/ESG, with one of the biggest examples of this being “greenwashing.” This is when a company overstates or exaggerates their positive impact on sustainability, including sometimes even intentionally fabricating false information.”

Does Impact Investing Deliver Lower Returns?

Because socially conscious investing focuses on more than just purely turning a profit, you might think that its returns trail those of other investment strategies.

But by and large, impact investing hasn’t negatively impacted investor returns, according to a review of international investment studies by the Royal Bank of Canada. In fact, there are even some studies showing that impact/ESG investing can actually outperform regular portfolios, something SRI/ESG portfolio managers are eager to promote.

In Milan’s experience, this is perhaps too optimistic—or at least is missing the point. “On average and on a risk-adjusted basis, SRI/ESG funds perform about as well as their benchmarks, neither better nor worse,” he says. Rather than trying to outperform the market, “the primary motivation for using this strategy should be about doing good and the positive feeling you receive from that, not about generating superior returns.”

And as with all investments, though, what you choose to invest in will ultimately help determine your returns.

“Impact investing can run the gamut from philanthropic (i.e., the financial return is expected to be below market or nonexistent) to market-rate (i.e., the financial return is expected to more closely resemble broad-based investment exposures),” Spika says.

Regardless of their impact investing strategy, the vast majority of impact investors (91%) were pleased with their performance, according to the Global Impact Investing Network’s (GIIN) 2019 Annual Impact Investor Survey.

Is Impact Investing a Good Fit for You?

If you’d like to pursue purpose, passion and profit with your investing dollars, impact investing may be the right strategy for you.

Before you start making impact investments, though, make sure to research carefully to be sure that the organization or company you wish to invest in truly does deliver societal value.

This may be easier said than done given the lack of consistent standards regarding SRI, ESG and impact investing, which is why you may want to consult an expert, like a financial advisor, when navigating impact investing.

Adblock test (Why?)

Source link

Continue Reading


Five things that make up an investing professional's 'working day' – Financial Post



Peter Hodson: If you are not paying attention — always — you are going to miss something

Article content

Several friends in the past month have, for one reason or another, asked me to describe my working day to them. I also used to get this question a lot during my time as a mutual fund manager.


Article content

The investment business is really a 24/7, 365-days-a-year affair. Managers are always thinking about stocks, the economy, world events, even when they are not at the office. Everything impacts the markets. If you are not paying attention — always — you are going to miss something.

But in case anyone else is wondering how an investment professional spends their “working hours,” here’s a breakdown into five categories.

Article content

Wake up stupid early

I wake up when a three is the first number on the clock. Part of the early wake-up call is a habit from my old competitive swimming days, but it is now work-related. Simply put, with access to information much easier for every investor these days, an early start is one of the only advantages an investor can get.


Article content

Company news — takeovers, acquisitions, contracts — typically comes out in the mornings. Having more time to analyze this news, rather than just reacting to it 30 minutes before markets open, can give you an edge. For example, suppose a company announces a takeover and that it is accretive to earnings. With enough time, you can run your own financial models, rather than just taking a company’s word for it. Advantage: early bird.

Reading/analyzing company news, world events, commodities, takeovers

Not all news, of course, comes out in the morning. Earnings releases tend to be before or after market, but companies can issue press releases anytime, and there are always virtual conferences and conference calls to attend. The United States Federal Reserve might make an announcement, or the Bank of Canada. The past 18 months has also required investors to become COVID-19 experts, watching virus and vaccine news like a hawk. Basically, any piece of news can move markets.


Article content

Sometimes, news you think isn’t so important gets picked up by a larger crowd, and stocks and markets can move erratically. There are rumours and facts to listen to and then decide if they are important. My Bloomberg screen can put out hundreds of press releases a minute. One could spend an entire day just reading these headlines, so quick decisions and time management often become crucial habits.

Data screening for new stock ideas

If I have learned one thing In my career, it is that company executives can lie, sometimes outright. At best, they are expert salespeople. At worst, they can be corrupt fraud artists. I have learned to not really rely on them. Numbers, on the other hand, particularly cash flow, are a lot harder to manipulate, so running data screens is a major part of my day.


Article content

I screen for all sorts of things, but start with the new highs from the day before. This gives me some new ideas to investigate, as I need to see what all the fuss is about. But screens can be done on pretty much anything, and I like to look at return on equity, sales growth, earnings revisions and dividend increases, amongst other data points. With 10,000 stocks in North America, screens at least keep the potential investment universe manageable.

Talk to companies/analysts

Meeting with company executives is still important, but not for the reason many think. Generally, because corporate executives need to disclose all information to all investors, you are not going to get any juicy new information from repeated or one-on-one meetings. But it is important to meet a management team in order to get a feel for the company’s approach and long-term goals, and specifically whether you can trust them.


Article content

Managers and investors don’t need to meet with executives every quarter. Let them run the business. Many company executives, and fund managers, too, have decided these meetings are a bit of a waste of time, and prefer to let the numbers do the talking (see the prior point). I’ve been to thousands of meetings in my career, but I took fewer and fewer meetings as my career progressed, and had more time for real research rather than listening to a sales pitch. One caveat: I do like talking to the competition of a company I am researching. Competitors will tell you the flaws of the other company. Management won’t.

  1. Stocks should be safer and worth more in terms of valuations than cryptocurrencies.

    Five reasons why cryptocurrencies make the stock market look good

  2. Central bank stimulus has kept rates artificially low for a long time. But, remember, there is no rule stating that rates must rise.

    Five assumptions investors should be rethinking

  3. You only need one or two good stocks to have an awesome portfolio.

    Five reasons why running a portfolio is like running a marathon

  4. Some investors — especially the contrarian ones — can relax a bit.

    Five reasons investors don’t need to worry about a market dip


Article content


One needs customers, so whether you’re a portfolio manager, analyst or someone helping do-it-yourself investors, part of any investment professional’s day is spent marketing. Current customers always have issues, enquiries need to be answered and there are always new customers to win over.

More than half of my day as a portfolio manager during the financial crisis in 2008 was spent calming investors down, whereas I would have preferred to be spending that time trying to manage an imploding investment world. But it is a necessary task. If my customers all leave, there isn’t much point focusing on the other four points above now, is there?

Financial Post

Peter Hodson, CFA, is founder and head of Research at 5i Research Inc., an independent investment research network helping do-it-yourself investors reach their investment goals. He is also associate portfolio manager for the i2i Long/Short U.S. Equity Fund. (5i Research staff do not own Canadian stocks. i2i Long/Short Fund may own non-Canadian stocks mentioned.)


 If you liked this story, sign up for more in the FP Investor newsletter.




Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Adblock test (Why?)

Source link

Continue Reading


New Investment Awareness Push Targets Scam-Prone Millennials – Huddle Today



Reading Time: 5 minutes

SAINT JOHN–Millennials are more prone to lose money in financial scams than their elders.

With years of attention paid to educating older Canadians about protecting their money from fraud, it may be surprising that many younger investors have fallen victim to get-rich-quick pyramid schemes, bogus virtual currencies, and more.

Perhaps equally surprising is how New Brunswick’s financial and consumer services regulator feels Millennials are disinclined to take financial advice from a Crown corporation.

“We know this demographic is notoriously difficult to reach,” says Marissa Sollows, the director of education and communications with The Financial and Consumer Services Commission of New Brunswick (FCNB).

In an interview with Huddle, Sollows cites FCNB’s research, in addition to research coming from other provincial commissions, confirming Millennial investors are in some cases at higher risk of falling for poor investment pitches or making decisions without the right financial knowledge.

In the first nine months of 2021, 20 New Brunswickers reported losing nearly $711,000 in crypto investment scams, according to the Canadian Anti-Fraud Centre.

“When we started looking at this situation in New Brunswick, it became clear as we saw different trends in DIY investing and interest in crypto and that this was an audience that we needed to try and reach,” explained Sollows.

Not your parents’ investment landscape

Sollows says Canadian investors in their 20s and 30s approach their finances from a different cultural perspective than their predecessors: research shows they are less likely to want to work with a financial advisor and want more hands-on control over their investments.

But Sollows says there is also fear that they don’t know enough about investing and are worried about losing money.

“To come from a regulator, we sort of recognized it wouldn’t work as well for this audience, who get their information from different sources and who have different levels of trust with those different sources,” said Sollows.

In an effort to respond with something meaningful for the Millennial segment, FCNB designed a new awareness campaign that was outside its traditional outreach.  Where social media has hooked young investors on finance, FCNB decided to put more of its campaign resources on YouTube, Twitter and, for the first time, TikTok.

For Sollows, that meant focusing not just on what channels Millennials were getting their financial information from, but also trying to understand how they were interacting with those they perceived as “experts” and where that financial advice was coming from — whether legitimate registered online trading platforms, or somebody purporting to be an expert with a hot tip.

“There’s a much higher level of comfort, with the younger generation, with technology and with putting trust in their peers in these different online forums as opposed to going to a traditional financial advisor that their parents would have had more trust in,” says Sollows.

On Nov. 22, FCNB launched “The Right Recipe,” a new investor education campaign targeting Millennials and do-it-yourself investors with resources designed specifically for them.

FCNB campaign videos serve as explainers on a variety of topics–including fad investing, multi-level-marketing schemes, influencer scams, and high-risk investment products–while reinforcing the steps any investor can take to protect themselves and their money.

Do-it-yourself investing is exploding

Covid-19 lockdowns and uncertainty translated into a meteoric rise of online DIY investment platforms and trading apps, leading many to investment possibilities for the first time at the touch of a button. Others are getting their advice on social media and choosing instead to test unconventional methods. But, as Sollows points out, these often “prey on FOMO” (fear of missing out) on advertised payoffs.

The rise of “finfluencers” (a specific type of influencer who focuses on money-related topics) have made full use of platforms like TikTok, Instagram, and YouTube to get the attention of young investors.  Couple that with Millennials increasingly willing to devote cash on decentralized cryptocurrencies and hot stocks – with much of that advice coming at them through social media – and you’ve got a scene rooted in familiar tones.

Interactive Investor, A UK online investment service published a July survey showing more than half of young investors surveyed in the UK who have purchased cryptocurrency like bitcoin or dogecoin have done so using credit cards, or even student loan money.

More unconventionally, users of Reddit have made headlines swelling into pump-and-dump schemes targeting low-cost stocks for small companies.  Money inflating the value today might be worthless tomorrow on a pre-planned selloff, leaving young investors holding pennies of worthless stock days later.

Trendy concepts like “Impact Investing,” where a company gathers investment intenting to “generate measurable, beneficial societal and environmental impact, alongside a financial return,” have gotten young people to invest money for the promise of helping a greater good, which often leads to confusion and no return for the investor.

“It’s the same old scam,” according to Sollows, who says it’s just wrapped up in different wrapping paper with a different story around it.

“We’ve seen this kind of thing happen with ‘green investing’ in the past when renewable energy and so on was becoming really popular. The scammers would follow the headlines and build pitches around it.”

Financial awareness education is evolving

On the flipside, Sollows says there’s a need to help young investors navigate many of the legitimate online platforms out there. She hopes FCNB can be a trusted resource to help Millennials make some of their first investment decisions, especially when going the DIY route.

“The Right Recipe” depicts a fictional brewmaster who has heard a lot of financial tips over the years.

He’ll tell you that everybody knows someone who’s made a bundle in the markets. He figured if his customers could do it, why couldn’t he? The example allows the user to follow his investment journey, for better or worse, through videos.  That journey is everything from “listening to some rando’s advice on social media” to letting “FOMO be his guide” and blindly “following the latest investment trends.”

In addition to campaigns like “The Right Recipe,” FCNB also offers investment updates and fraud alerts emailed directly to those who sign up on its website and provides a variety of financial literacy topics through both in-person and through virtual presentations. Those sessions are offered to workplaces, classrooms, and the broader community, covering topics ranging from financial literacy and budgeting to investing to fraud prevention.

For navigating the investment learning curve and the possible pitfalls for young investors, Sollows believes the campaign would be a success if people used the information and experience of the brewmaster to instead follow their gut instead of social media when the offer seems too good to be true.

“If you’re being offered some crazy returns on things, and they’re telling you, ‘Oh, I can guarantee you’re going to make this much money and it’s so easy you don’t need to understand it — In any other aspect of your life, if somebody said that to you, would you keep the conversation going or would you walk away saying, ‘No thanks, I’m good.’”

FCNB’s The Right Recipe campaign will run until mid-February, in both English and French on most social media platforms and at:

Tyler Mclean is a Huddle reporter based in Fredericton. Send him your feedback and story ideas: [email protected]

Adblock test (Why?)

Source link

Continue Reading


The new investment leader driving BMO's digital transformation – Wealth Professional



She’s interested in helping women take charge of their finances and advance in their careers, but her people skills have launched her into the digital side of transforming wealth management.

Casciato was able to wed both aspects in her last job. Given that women are expected to control 31% of the wealth in Canada by 2024, but the industry’s leaders and advisors still don’t represent gender or diversity equity, she was pleased to be able to increase the number of women leaders in BMO’s frontline contact centre roles from 20% to 45% They lead teams of 15 to 20 customer service – or investment – specialists and now are all women of color.

She’s also been the executive sponsor for BMO’s North American Customer Contact Centre’s Diversity, Equity and Inclusion Council and a member of BMO’s employee-run diversity, equity, and inclusion board of directors. She’s pleased that they’ve started mentorship programs and done virtual events, and she often gets to speak to increase awareness about diversity, equity, and inclusion and getting more people engaged. “I get a lot of value in watching women succeed,” she said, “and truly feeling like I’ve helped them.”

Casciato now is head of the section that oversees customer service and sales, but is also driving BMO’s digital transformation across its wealth business. She said her role is “to meet the clients in the way that they want to be served – and, increasingly, they want to be served digitally. For my business, which is self-directed investing, they want to have the best possible platform and servicing that they can have because they are do-it-yourself investors.”

That also means providing them with the ability to connect with the help they require. “Increasingly, I see that as being more digital than phone,” she said. “My experience in the broader wealth business has taught me that for some pieces – particularly when you’re dealing with high-net worth individuals and family offices – there’s a relationship component that’s really hard to replicate digitally. So, we need to be prepared to meet our clients where they are, to have the digital capabilities and continue to have those – face-to-face virtually through technology – relationship pieces with another human because that’s important when you’re dealing with people and their money and advice.”

Adblock test (Why?)

Source link

Continue Reading