Making a Difference Through Positive Investing

It is not enough to just be against something. You have to act in a positive manner and be for something if you are to be successful. This statement is very true when it comes to investing resources in projects and companies. Not investing into a project or company is only part of the equation. To fulfill the equation to its utmost, a positive project has to receive those resources.

The current round of environmental protests going on in New York City brings this idea to light. There is a broad momentum and reporting on showing the negative side of not investing in cleaner types of energy. For example, there is a story in the New York Times (link here) on how a charity of the Rockefeller family along with others will be divesting its investments in fossil fuel companies. Also going on right now is a movement away from hedge funds. CALPERS and a North Carolina Pension Fund have announced they are removing its capital from being invested in hedge funds due to complexity of investment not matching desired return. These are great examples of negative actions against something. But the media that reported the stories did not go into as much detail in regards to the positive actions these organizations are taking with this capital.

The good news is that these organizations plan to put the capital to work in a productive way that matches their ethos. The New York Times article talks about the fact that the Rockefeller trust (and others) will be investing that same capital into cleaner fuel technology projects. This is a big deal. It provides another level of legitimacy towards the clean fuel movement. Another good example is that of one of KVCC’s clients, KDK Fund. It has made it a purpose not to just keep capital from being invested in certain projects and companies, but to also highlight where the capital is going to make a positive difference. For example, in the its bond portfolio, KDK Fund found the Powershares ETF Build America Bond fund to invest in. KDK Fund wanted to find a bond fund that followed its ethos and this fund does that by simply investing in local and state bonds. Another client, Bullied Comics, has a mission that is to stop bullying by showing ways to improve positive emotions so that bullying doesn’t enter into a person’s situational actions.  

Groups regularly will follow inspiring leadership over basic tear down leadership. To do this, groups need to find a better alternative to build on top of the old investment as the Rockefeller trust has done. When looking to invest with a cause in mind, remember that removing capital and resources is only part of the solution. Putting resources to work in a new way that builds a better, more meaningful product is where the magic of the solution shows up.   

Disclaimer - Any mention of specific divestments or investments in the story are not to be considered recommendations to buy or sell anything. Please do your own due diligence before investing.

American vs Chinese Capitalism

With capitalism starting to take more of a hold on the Chinese community, there are some growing issues that butt up against its limits given its political structure. Reports are showing that more and more wealthy Chinese are leaving the country to pursue life with better benefits outside of making money. There are also news reports showing a higher discontent level by ordinary Chinese citizens with the fact that even though Alibaba is a Chinese company, they are not allowed to purchase shares. These two examples show that there might be a ceiling in regards to how far capitalism can reach in a communist centric political system.

In the last few years, it has been well documented that there are a large percentage of wealthy Chinese citizens looking to move away from China. This is not surprising. It is because these families have reached a point where the utility of making another dollar is less important than the utility of social or educational benefits found elsewhere. This can be seen as a direct result of the regulations put on the society by China’s communist government. Until the government is able to change some of its social policies (whether it’s education, environment, freedom of speech), this exodus will continue to grow. Maybe the Chinese government is ok with these people leaving as it would create job openings for other Chinese. But when the population sees the trend, they will probably be motivated to move on as a whole, which could be detrimental to the political stability of the country.

This week, Alibaba will be going public. But with investment regulations being so tight for for the non-wealthy in China, they are unable to invest. This is maddening to some, as Alibaba is considered a main Chinese company. This issue could create some unrest within the investing community in China, as the pride of having a company like Alibaba have more of a foreign ownership hurts the pride of the country. The following Bloomberg article (link here) spells out the issue more.   

Both of these issues should be taken as reminders as to the limits capitalism has when operating under a political system like China’s. A country should never want its successful, rich citizens to leave. It should also give the general public the same access to their own companies stock as the wealthy do. Only then will these issues stop.

A special thanks goes out to the American way of capitalism. It is not perfect by any stretch of the imagination. But it does give access to those who desire it most, unlike other countries.

*This is an opinion piece. *