Local is powerful because it is both the nexus of relationships and home. Proximity offers investors a unique perspective on the importance of flourishing regional businesses. No one cares more about workforce opportunities, pollution, and community health than locals. Alternatively, locals have the most to gain from businesses that view their own flourishing as vitally connected to the broader community.
Additionally, local is powerful because our actions are known. Being known and connected carries natural accountability. If a company is headquartered in our home state, we are likely to hear about its successes and controversies in our news updates. We may even cross paths with employees or executives.
The Power of Purpose
America’s most admired companies have a purpose that animates their enterprise. Many smaller companies do not strategically promote their efforts that contribute to the common good and consequently, these efforts wait to be discovered. These companies are not simply providing a product or service—they have a focus on a mission that inspires others. Businesses that cultivate this purpose tap into a deep well of productivity and engagement.
Capital is Multi-Faceted
We seek to recognize and discover contributions to the capital landscape beyond those that appear on balance sheets and income statements. Human capital (knowledge, skills) and social capital (friendships, networks, faith communities) are essential components of flourishing. All of us benefit from shared natural capital (resources) that require our good stewardship. Additionally, cultural capital (art, music festivals, food) and institutional capital (access to healthcare, education, transportation) surround us everywhere.
When investors acknowledge these multi-faceted and indirect forms of wealth, the analysis of portfolios broadens well beyond the typically accepted metrics of the financial industry.
Investors are Entitled to Attractive Returns
All investing is risk-taking. More often than not, the risk is that you will not receive back the amount that you invested. This could be because a business struggles. Or because your investments could lose value due to investors hoarding their assets in fear of global financial instability—much as they did towards the end of 2008 and 2009. Or, this could be because inflation cuts into the value of your capital over time.
Investors are entitled to attractive returns as an incentive to carry these risks. Without the promise of return, no one would invest. Without investment, we would have little growth.
Free and Open Markets serve the good of society
On the spectrum of free and open markets on the one side and centrally planned markets on the other, modern history suggest that society, the economy, and the environment all flourish more with freedom. Free and open markets are much more aligned for allowing the growing disparities of income, education, and health outcomes. We focus our efforts in ameliorating these negative outcomes by drawing attention to personal and community accountability that is required in response to the freedoms we all enjoy.
We believe that the opportunity offered by a free and affluent society requires a reciprocal duty to the very systems that enable these benefits. We find the basis for investor responsibility in both spiritual and secular philosophical texts. Our own faith tradition, that commands us to care for both our neighbor and the earth—embrace good while rejecting evil. We also look to the Enlightenment concept of social contracts, which defines mutual responsibility. In this light, the freedom and opportunity that we enjoy as citizen investors requires a duty to consider the common good of our neighbors.
Investors have a duty not just to the pursuit of personal returns, but also to consider how our money impacts neighbors in communities near and far. In Native American tradition, for example, this duty is to the seventh generation, which is yet unborn. Consider a portfolio where the pursuit of personal returns and the common good are so intertwined, they have become inseparable.