How I celebrated the inauguration
By Casey Aspin
(Casey wrote this blog post in a personal capacity, not in her role as director of communications for Preventable Surprises). As an American living in the UK, I have the luxury of distance, which provides a buffer for U.S. events I find upsetting, such as today’s inauguration. Things seem a bit less real when they are thousands of miles away and not part of my daily consumption of news and office chat. But the months of denial that today would arrive are over. Yesterday, I withdrew all of my investments from the stock market--30 years of savings. I’m not willing to let the head of Trump Casino gamble with my retirement plan, which is what I believe will happen if I remained in stocks. In one of my past lives, I worked for some of America’s largest asset managers. I compared notes with a former boss about what Trump would mean for investors. She believes the market will get a billionaire bounce as CEOs anticipate a less regulated market and more supine Congress. She also believes there will be war. And there will be trade wars. She’s staying in, thinking the bounce will support valuations for the next few years. Not me. Markets need certainty and certainty will be in short supply for the next four years. If I’m honest, I have to thank Trump for upsetting my inertia. I’m like most investors–once we’ve gone to the trouble of coming up with an allocation plan and selecting our funds, we stick with it. But I have been uncomfortable with my portfolio choices for years. Until yesterday I used index funds to gain exposure to the broad U.S. stock and bond markets and to international markets. I like the low cost, broad diversification, and lack of manager risk. I’m quite happy with a market return–I’m not trying to beat the market. However, I don’t enjoy holding fossil fuel companies or heavily fossil fuel-dependent companies at a market weight. When I’ve looked into socially responsible indexes in the past, I’ve found re-allocations to pharmaceutical companies and banks that gave me pause, not only because many of these companies also have business models that I find immoral, but also because of the stock-specific risk that arises when removing “dirty” stocks. And so I’ve stayed put for years. Until yesterday. I won’t be returning to the market any time soon. But when I do, it won’t be to broad market indexes. I would feel differently if the company managing my assets–-my former employer-–were actively engaged in pushing investee companies toward a low-carbon, sustainable economy. But it isn’t. Large asset managers have mostly sat out the debate over how to realise the Paris promise of global warming of less than <2°C. My hope on this sad day for my country is that the inauguration shakes institutional investors out of their stupor and forces them to take on what Lord Stern correctly termed the greatest market failure of our time–-the failure to assign the costs of pollution to those who created it. |
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