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New York Times Mutual Fund Study |
In 1993, the New York Times initiated a 7-year study of mutual
fund investment approaches. The paper asked five of the nation's
leading investment advisers to design model portfolios for a
hypothetical investor having $50,000 and 20 years to go until
retirement.
Jack Brill, founder and current Senior Advisor of Natural Investments (Natural
Investment Services at the time), was asked to participate, along with four other
highly regarded investment professionals. On the heels of his first
book, Investing From the Heart, Jack was the only socially
responsible investment (SRI) advisor in the competition.
As such, whereas
the other four advisors had access to the entire investment universe,
Jack's portfolio used only socially screened mutual funds; back in
1993, there were only 20 SRI funds available! While we always
maintained that this would not limit opportunities for successful
results (and we appreciate today's array of 200 funds), skepticism
about SRI was the prevailing attitude at that time.
During the course of the study, the Times published a
quarterly article detailing the investment process of each adviser
and comparing their quarterly and cumulative performance. Beginning
July 1, 1993 and ending 28 quarters later on June 30, 2000, the
landmark study served as a high profile opportunity to highlight both
SRI funds' competitive returns and Jack's success as an
investment advisor.
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While investors
are interested in helping people and the planet, we also want our
investments to generate sufficient return. Decades ago, when there
were only a handful of managers willing to conduct ethical screening
and shareholder advocacy, it was more difficult to create fully
diversified portfolios which offered competitive financial returns.
Today, with
hundreds of socially responsible funds and
managers investing in virtually every asset class, it is
possible to design and maintain investment portfolios that
consistently perform similarly to the
conventional investments.
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Our Approach to Investing-Diversification, Model Portfolios, Monitoring the MarketsNatural
Investments conducts extensive research on the wide array of
investment securities available to socially responsible investors.
Equally important is the understanding of how combinations of
securities work together to reduce risk and enhance performance. With
the work we've put into our investment research, we have confidence
in guiding our clients through the sometimes-challenging securities
markets.
We believe that
an Asset Allocation approach is the most reliable and consistent way
to earn competitive investment returns and manage risk levels to the
comfort point of every investor. Asset Allocation is the practice of
dividing investments among a variety of securities categories. There
are lots of categories, and we encourage diversification into a wide
variety because they tend to have different characteristics. When
some of them may be performing poorly, others may be performing well.
This makes for a smoother ride.
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Nuts and Bolts of Investing |
The first steps
we take are all about communication: initial "getting to know each
other" conversations, review of your NI Social Questionnaire (which
give both you and your advisor additional clarity about your
priorities), and deeper follow-up discussions about you and your
needs.
Don't be
surprised if we ask some probing questions about you. It's really
important that we learn as much as we can about your goals, hopes and
fears, work and family situation, traumatic experiences with money
when you were a little kid...you might tell us things that even your
best friends don't know about you! All this is important
information that we use to design an investment strategy that is
right for you.
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Beach Lover's Guide to Asset Allocation |
Because every
investor is unique, we take an individualized approach to each
client. At the same time, we've learned that investors tend to
arrange themselves in clumps along a risk spectrum ranging from
ultra-cautious to super-aggressive. We have designed 5 model
portfolios that correspond to these risk levels. (See Inside NI
Portfolios to learn how we do this). These model portfolios are the
starting point for our financial advisors to create customized
portfolios for every client.
Each of our
models utilizes Asset Allocation to assure that we provide a broad
range of diversification, and therefore maximum safety at each level
of risk tolerance. Asset Allocation is the practice of dividing
investments among a variety of securities categories including
various types of bonds and stocks. In general, higher risk
portfolios will be weighted toward more investment in the volatile
stock market, while lower risk portfolios are oriented more toward
savings and bonds that do not fluctuate in value much if at all.
Still, all portfolios include a healthy mix of assets to assure
proper diversification.
This can sound a
bit dry, so when we wrote Investing
with Your Values we came up with a
playful way to visualize the choices:
The Beach Lover's Guide to Asset Allocation
Picture yourself at a beautiful sandy beach on a warm, sunny day. The surf is up. The gentle beach represents conservative bond investments. The lively surf represents volatile stock investments.
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Our Approach 
