What is Values-Based Investing or VBI?

Traditional investing asks, “How can I get the most profit from my investments?” Values-Based Investing, or VBI, adds to this question by also asking, “How can I make the world a better place?”

Of course, “making the world a better place” looks different to all of us. Personal values can center on many different areas of life, but often can be categorized by blessing certain people and places.

A few examples include positive treatment of the workforce; elimination of harmful drugs; boycotting anti-family products and services; advocating for positive environmental impact; medical improvements and disease cures; charitable giving; advocating for the dignity and sanctity of all lives (including the pre-born); etc.

Investing is a challenge for the mind; VBI is a challenge for the heart. The first step of VBI begins with an understanding of ownership, which leads to personal responsibility. We call this understanding, “stewardship” which is realizing that we, as investors, are managing the assets on behalf of another and believing that ultimately, this money is not really ours.

Anyone interested in Values-Based Investing must first look inward and know their personal values and convictions. Once those values are firmly established, the next step is working with a Financial Advisor who wants to champion (and invest in) those values and knows how to screen investments accordingly.

At Anthem, we look at 3 key elements when it comes to VBI. We use these elements to customize investment strategies based on each client (individual or couple) who walks through our doors.

3 Key Elements of Values-Based Investing (VBI)

Eliminate companies whose practices or products cause harm.

Most of us don’t think about where our money goes when we add to an account (401(k) or otherwise). As wise values-driven investors, Values-Based Investing causes us to stop and think about the companies/stocks we own, because we, as their shareholders, are profiting from their practices.

Did you know that over 2 dozen of the 500 companies in the S&P 500 invest in tobacco, pornography, gambling, and abortions? At Anthem, we automatically remove those companies from our investment strategies. 

Are there other issues and violating practices that are important to you? We invite our clients to an exercise that helps them identify their values to be used for their investment portfolio. VBI makes the investing experience much more meaningful and fulfilling.

Evaluate companies to identify those that meet our investment objective.

Our investment team applies a series of processes (fundamental, strategic, tactical) to identify companies for an optimized and consistently rebalanced portfolio.

How does the process impact the portfolio? We work hard to study market patterns and trends. However, no one can predict the market, so it’s important to diversify your portfolio.

Simply put, spread your investments across a wide variety of companies, industries, asset types, and geographies. It takes wisdom and a commitment to a multi-faceted process to consistently diversify and prepare for all kinds of market scenarios.  

Elevate companies to make the world a better place.

Our VBI team also applies an impact assessment which aims at constructing portfolios with holdings that bless society, as well as the account holder. While we care most about stewarding investments to reflect client-held values, we must concurrently apply analysis to seek out sustainable profits and positive returns.  

What drives you? The values you care most about should be reflected in your investments.

If you care about the environment, invest in companies that manage clean water initiatives in third-world countries and reduce waste by using recycled materials. On the other hand, if you care about medical research and finding cures for diseases, invest in companies that actively make advancements in this area. We believe this step is the most fulfilling part of Values-Based Investing.

How Anthem Incorporates Values-Based Investing into Our Framework

We believe we help people take off their blinders when it comes to their investments. If you aren’t quite clear yet on your values, we understand! We provide tools when we meet with you, and we ask questions…lots of questions. Then, we aim to equip each client with the tools and advice they need to gain clarity, improve confidence, and pursue contentment.

Beyond that, we understand that an investment strategy is never a “one and done” situation. It requires long-term portfolio management to ensure that Values-Based Investing continues to happen with your unique preferences and that you continue to make a sustainable profit.

Are you ready to start living aligned with your values?

The sooner you decide to incorporate your values into your investment strategy, the sooner you will bless mankind. We encourage you to remove the blinders and step into stewardship with VBI!

Let’s talk about how you can prosper while living aligned with your values! https://anthemwealthadvisors.com/contact-us/

** Past performance may not be representative of future results.  All investments are subject to loss.  Forecasts regarding the market or economy are subject to a wide range of possible outcomes.  The views presented in this market update may prove to be inaccurate for a variety of factors.  These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data.  Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.  

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