Fundamental Views

Investing: A Moral Good?

© www.canstockphoto.com / rocketclips

It is unquestionably good that we have farmers to raise our food, shopkeepers to bring the things we need within reach, nurses to nurture us back to health, and so forth. We know instinctively that any pursuit that benefits others, or helps to meet the needs of society at large, is a worthy pursuit.

Is investing in the same category as worthy labor? Some people tend to think it is not. We offer the following perspective for your consideration.

Many of us have known route drivers for overnight and package delivery companies; long-tenured ones become part of the fabric of a community, well known to all. They clearly perform a worthy service. Yet how valuable would their efforts be without the trucks, planes, terminals, software systems, and the rest of the capital investment that supports their jobs? How much delivery could get done if the only equipment was handcarts?

The two largest such companies have billions of dollars of assets invested so that hundreds of thousands of employees have the tools and resources they need to do their jobs. This capital at work, about $100,000 per employee, is what makes the efforts of the workers so valuable. Where did the money come from?

Companies issue stock and bonds to finance their capital investments. The buyers of those investments, the investors, are ultimately the ones who provide the tools used by the workers to increase the value of their efforts.

And who are these “investors?” We know hundreds of them personally. They are workers saving for retirement, the retired, widows, families saving for college expenses, and everyone else trying to put money away for a rainy day or leave a legacy.

So do these friends and relatives and neighbors deserve a return on their investment? Presumably we all agree that a return on investment is only fair.

People at work and investments at work are to the world as teachers and classrooms are to education. Both are needed, both are useful. In the sense that necessary and useful things are good, both are worthy.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investments involve risk and may lose value.

About “The Coming Monetary Collapse”

Ruined headlines about economic collapse

Recently, a retired worker popped into the front door to ask, “Mark, have you heard about the Coming Monetary Collapse?”

This, of course, was news to me. It eventually became apparent that this “news” came from an advertisement on the Internet. We see these ads every so often on financial news sites. They seem to look like reputable-looking news articles but in the end they always try to sell you something, typically expensive subscription services that will supposedly help you sidestep the “inevitable” collapse.

If someone actually knew enough to forecast an impending financial downturn, they wouldn’t need to be selling you advice in order to get rich—they’d already know everything they needed to make themselves rich beyond their wildest dreams. And if the collapse was all that catastrophic, all of that money wouldn’t do them any good anyhow. If you were convinced a worldwide monetary collapse was coming, here’s what you should invest in: canned food, ammunition, and generators. You don’t need expensive books and online seminars to tell you that.

(Incidentally, clients have told us about friends of friends who were convinced of global collapse and tried that investment strategy years ago. Last we heard, they were trying to sell used generators to rebuild their retirement funds.)

These sales pitches are often dressed up as actual news articles, but they’re pure scare tactics. They want to sell you something, and instead of promoting their advice on its own merits (it has none), they are trying to play to your fears.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Everything You Need to Know About the Federal Reserve “Conspiracy”

Federal Reserve - stock photo

We hear a lot about the Federal Reserve. It’s a poorly understood entity that seems to be in the news an awful lot for something most of the public knows so little about.

We have a firm understanding of what the Federal Reserve does, and we know that it is just a human institution like any other, subject to the same virtues and flaws as the rest of us. There is a vocal minority however that is concerned with the idea of a vast and powerful conspiracy with the Federal Reserve at its helm. They fear that a small handful of unelected people control everything at the expense of our legitimate elective government and will ultimately be our ruination.

There is a glaring problem with this theory: the hundred years since the Federal Reserve was founded has seen more progress in our country, in our living standards, and in goods and services that make our lives better than was done in the thousand (or two thousand, or ten thousand) years before.

In other words, if a handful of people really are controlling everything, they’ve apparently been doing a wonderful job for us so far.

What To Hold For Your End Of The World Portfolio

Man worried about 2012 doomsday prophecy - Stock photoOur entire investment philosophy is underwritten by a simple fundamental belief: tomorrow will be better than today. We can’t know that this will be true of every single tomorrow, but we’re pretty sure of what the long term trend will be.

Though they say that “past performance does not guarantee future results”, human civilization has a track record thousands of years long of managing to always do bigger and better things. We expect that things will continue to get bigger and better as time goes on. Without this belief the idea of investing in the future is meaningless.

We know that there are troubles in the world, as the news frequently reminds us. Clients sometimes come to us fearing that the latest bad news signals imminent total catastrophe. This isn’t anything new–people have been predicting the end of civilization for the entire span of human history. Yet somehow we’ve always gone on to bigger and better things all the same.

If such things ever do come to pass, it isn’t going to matter what investments you own. Your meanest neighbor will be trying to steal your canned goods. So the ideal portfolio for the end of the world is the one that will serve you best in the event that the end of the world fails to show up on schedule—again.