Episode 136: Personal Values Investing - Understanding and Using ESG Investments in Your Portfolio

Retire With Style

In this conversation, Bob French and Rob Cordeau discuss ESG (Environmental, Social, and Governance) investing and its growing popularity. They explore the different ways investors can align their portfolios with their personal values and beliefs. They also address common misconceptions about ESG investing, such as it being solely for liberal investors. The conversation highlights the importance of understanding the impact and potential trade-offs of ESG investing, including the potential for lower expected returns. They discuss different approaches to implementing ESG investing, including using funds and ETFs, separately managed accounts, or donating the difference in returns to charities. The conversation concludes with advice on how to approach the decision of whether ESG investing is right for an individual.

Takeaways

• ESG investing allows investors to align their portfolios with their personal values and beliefs.
• ESG investing can involve adding or subtracting certain stocks, industries, or sectors based on values and beliefs.
• ESG investing may result in a slightly lower expected return compared to a globally diversified market portfolio.
• Investors should carefully consider the impact and potential trade-offs of ESG investing before making a decision.
• Different implementation options for ESG investing include using funds and ETFs, separately managed accounts, or donating the difference in returns to charities.

Chapters

00:00 Introduction and Setting the Stage
07:37 Implementing ESG Investing: Adding or Subtracting
09:41 The Impact and Trade-Offs of ESG Investing
14:04 ESG Investing: Not a Boycott or Punishment
20:01 ESG Investing and Portfolio Performance
26:58 Implementation Options: Funds, SMAs, and Donations
39:37 Making the Decision: Is ESG Investing Right for You?
41:50 Conclusion and Final Thoughts

Links

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This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”