Over the past few years, conversations I’ve had with clients regarding ethical investments have changed. Those interested in investing ethically are no longer a fringe minority, with a number of our clients displaying genuine interest in sustainable and ethical investments. Clients are looking for ways that they can invest their savings into causes important to them whilst also outlining industries they would like to avoid. These discussions have made clients aware that returns are not the only consequence of their investment choice.

What I’ve found is that each client has a different set of values when it comes to deciding whether or not an investment is ethical. I have some very passionate clients and there will be a level of scrutiny where all companies appear to be inappropriate investments.

Listed companies in Australia have aligned with the Environmental, Social, Governance (ESG) standards and improved their ESG reporting over the last few years. This level of transparency allows fund managers using a sustainable and responsible investment approach to better compare the sustainability and environmental impact of companies.

At The Investment Collective, our investment philosophy allows us to take a ‘hands on approach’ to position clients’ portfolios in stocks that we believe show the most promise and brightest future prospects.

Finding the right investments can be a complicated and timely process. A portion of managed funds claiming to be ‘sustainable’ fail to meet the most basic client expectations for a responsible or ethical investment. Ethics is more than just adding ‘sustainable’ to the name of the fund. We continue to actively look for new investments that provide a point of difference and have a renewed focus on finding responsible investment managers that align with our investment philosophy.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Last week the Victorian Government introduced Stage 4 restrictions in an attempt to mitigate the spread of the COVID-19 virus throughout the community. Never before has the state experienced such a level of disruption to business, communities, and individuals. In this situation, and given the circumstances which contributed to it, a level of disquiet, frustration, and anger are absolutely understandable. Whether this lockdown strategy will be successful or indeed worth the price, remains to be seen.

That said, with all the negativity abounds, it’s important to be mindful of focusing on what we can individually and collectively control. What we can actually control comes down to what we think and what we do (including how we choose to react to events). That’s it! How we think will inform the priorities we choose and in turn, will impact on the choices we make.

The outcome of this will also depend on our perspective. Denying, or arguing against the reality of our situation may help us to ‘let off steam,’ however, it may also serve to hinder acceptance of a reality that individually we can’t control.

Life’s difficult, and at the moment it seems more difficult. However, accepting that life is difficult allows you to move towards opportunities for growth, learning and gratitude. The other aspect of perspective is a heightened sense of gratitude. Sure, freedoms that we may have previously taken for granted have been suspended, however, I had a good night’s sleep, warm and safe in my bed and in the morning had a warm shower and a full breakfast!

The final aspect of perspective is to know that all things end, and this certainly will also. It can be difficult to see this ending whilst we’re still very much in the middle of it, but it will end.

In the meantime, look for opportunities for growth and learn to remain optimistic knowing that we will get to the ‘the other side of this bridge’.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

The June quarter inflation numbers were printed this week and as expected, it was not good!

The chart below depicts the current situation we find ourselves in thanks to COVID-19.

As you can see, the cost of living dropped an unprecedented (have we had enough of hearing that word lately?) 1.9% over the past three months to June resulting in the annual rate of inflation coming in at -0.3%.

Since 1949, this is only the third time inflation in Australia has been negative!

In a nutshell, this means people are not spending money.  Since people aren’t, or more correctly, haven’t been able to spend money due to the restrictions brought on by COVID-19, company profits will be lower and if profits are lower so will dividends.  As to what extent, we’ll find out in August.

A low inflation rate impacts interest rates and this is not good for term deposit holders. If inflation is low, so are interest rates to encourage spending. However, it’s just not happening. In these times return expectations from our investments need to be adjusted to align with the environment we are in, which is low-growth. This looks like remaining for some time and it is a global phenomenon.

To counter this in the United States, this is how they’re addressing the issue there:

For now, adjust your return expectations from your investments and strap yourselves in, there’s a long way to go!

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.