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How to Invest Your Values In Retirement


More and more people are talking about “values-based investing.” 

What does that term mean? And how does values-based investing differ from traditional investing?


Traditional Investing vs. Values-Based Investing

Traditional investing has always been about maximizing one’s financial returns. Little, if any, consideration is given to how companies are earning those profits.

Under this popular investment paradigm, when a person wants to do good with their money, they engage in charitable giving. That is, they take some of the earnings from their investments and donate those dollars to a cause they believe in.

We all understand the tremendous impact we can have through charitable giving. Even so, under this traditional investment model, most of our wealth remains tied up. We tend to have a lot more money invested than we are able to devote to “doing good.”

But what if we could have a major impact through our investments–and not just through our giving?

That’s the beauty and the power of values-based investing.


The Three Pillars of Values-Based Investing

Values-based investing is best explained by the three pillars (or practices) it involves. These are: avoid, embrace, and engage

  • Avoid

As you might guess, the goal here is to avoid investing in companies that offer products or services that don’t align with your values. For example, if contributing to the public good is a value you hold, you may not wish to invest in tobacco companies. The profound personal and societal harm caused by tobacco products is indisputable. (Even people who smoke or dip admit their lives would be better if they didn’t.) 

  • Embrace

The embrace pillar is just the opposite. Here you intentionally seek out and invest in companies that are having a positive impact and making the world a better place. Examples of this might be medical companies that are developing new drug therapies or devices that are saving lives or curing diseases. 

  • Engage

The third pillar or practice of values-based investing is to engage. When you invest in a company, you become a shareholder. That means you have real ownership in whatever companies are in your investment portfolio. Even if your percentage of ownership in a company is small, you nevertheless have a voice. You can vote for proxies to represent you. You can engage with the leadership around issues that are important to you. 

Now, if you’re like me, you don’t have time to become familiar with all the different issues that are facing each of the different companies in your portfolio. And, you’re like most people, you may not even know what companies you’re invested in! That’s because most mutual funds buy and sell shares in dozens and dozens of companies.


Values-Based Funds and ETFs

It’s different when you choose to invest your money in values-based mutual funds and ETF companies. These entities do careful research before investing in any company. When they do invest your money, they advocate behind the scenes in a way that aligns with your values. They’ll vote as your proxy according to your values. They’ll engage with management teams, making sure that a company’s business practices and treatment of customers and employees align with your values.

To be sure, values-based investing is not a recent concept. We’ve had such options for several decades. But historically, these values-based funds have been characterized by poor performance and higher fees.

Not anymore.

The industry has grown and improved. More and more good investment offerings have entered this space. Now, you have the ability to pursue the strong financial returns that you want–and the social impact that you didn’t know you could achieve via investing.


Investments Good for the World–and for You Too

In short, charitable giving is no longer the only way you can use your money to impact the world for good. You can invest in companies that are making a positive difference and treating their stakeholders in a positive manner. 

The old way of investing is all about maximum profits. There’s no thought given to moral issues or ethical concerns surrounding the companies in which one owns stock. 

With values-based investing, you can invest in companies–in effect, be an owner of companies that are doing ethical things, doing them with excellence, and turning a profit. 

There are now values-based funds offering returns very similar to the market at large. This means you don’t have to give up good returns to make a difference. You can grow your portfolio–and do so in a way that aligns with your values.

If values-based investing interests you, or if you’d like more information about it, click the button that says “Talk with an advisor.” When you do, you’ll be able to leave a short message with your email address. Someone will be in contact with you shortly. Or you can always call us at (866) 331-7749.

(A quick note: Every couple of weeks we send out an article like this, a video, or some other resource to help people get ready for retirement–or to help those already retired enjoy a more satisfying “next chapter”. If you’re not on our list, we invite you to go to and sign up. It’s free, and it takes less than 30 seconds! When you do, you’ll get a bonus: three short videos that answer the three most common questions people ask as they prepare for retirement.)

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