What is ESG Investing And Does It Match Your Values?

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What is ESG Investing And

Does It Match Your Values?

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ESG Investing is not new, but it’s certainly trending as many investors want to steer their portfolio towards ethical causes that also mirror their personal values. What does that mean and is it a movement that you should care about?

It’s important to dig a little deeper and find out what these investments do – or do not – include so you can make sure they really line up with the things that are important to you. Let’s take a look at ESG Investing and how it can impact your portfolio.

First off, what exactly does ESG Investing mean?

It’s a form of Sustainable Investing and stands for Environmental Screens, Social Factors, and Governance Criteria. Investopedia.com perfectly describes Sustainable Investing as a way to direct “investment capital to companies that seek to combat climate change, environmental destruction, while promoting corporate responsibility”.


ESG Investing Explained

These three categories are the basics that are included in almost any socially-conscious type of investment. After that, you want to be aware of any other screens that could vary from firm to firm.

Some will exclude things like alcohol or gambling. Others are very aggressive about screening out any types of firearms or controversial weapons.

Socially conscious investing means different things to different people. You want to make sure you are having the impact that you intended when you invested in the first place.

1. Environmental Screens

These will rank companies based on their environmental impact. This could include things like water or ground pollution, carbon output, or commitment to conservation efforts in the future. Generally, these will exclude many oil and gas companies as well as some heavy manufacturing.

2. Social Factors

These factors can run the gamut a bit. It can include a company’s stated commitment to equity and inclusion, ethical treatment of workers, percentage of women on the board, privacy of information and a variety of other things. It’s important for you to understand what’s being included or excluded from this category. Don’t be afraid to ask questions!

3. Governance Criteria

To put this in plain English, this means the company strives to avoid shady business practices. They want to make sure that their financial information is transparent for their investors and they are independently audited on a regular basis. These companies are committed to avoiding fraudulent activity.

What Are Some Limitations Of ESG Investing?

Understanding what you own is key to being a successful investor. A good advisor should be able to explain, in a way that makes sense to you, how your investments are helping you to meet your goals. There is a ton of information available on the web about ESG investing and the options that are available.
A financial advisor can help you whittle down those choices and make sure that your investing style matches your personal values.

1. Don’t Forget About Diversification

ESG investing, as with any type of investing, has its risks. While you may feel strongly about investing in solar power, for example, don’t neglect other areas of your portfolio.

If you are too heavily concentrated in any sector, regardless of background, you will be adding additional volatility risk to your portfolio that you may not have intended.

There are some great mutual funds and ETFs available that can give you exposure to many different sectors without sacrificing diversification. Ask your advisor what may work best for you.

2. Customization Comes Along With Cost

Your ESG Portfolio can range from very broad to extremely customized, but don’t forget that there are generally additional costs associated with excluding or including each type of investment. The additional costs may be worth it to you, or they may not make sense in your scenario.

In either case, make sure you understand what you are paying for and how it adds value to your portfolio. 

Does ESG Investing Align With You

We see ESG Investing as a way to help our clients align their personal values and beliefs while still generating profitable returns.

Forbes recently published an article that describes the rising awareness perfectly. They said: “For many people, ESG investing goes beyond a three-letter acronym to address how a company serves all its stakeholders: workers, communities, customers, shareholders and the environment.”

Like all investing, an effective ESG Investing strategy still brings many inherent risks. Many ESG opportunities in the market stem from pursuing non-financial factors and require an in-depth survey to identify material risks and growth opportunities.

If you have questions on ESG Investing or Sustainable Investing opportunities, we invite you to start a conversation with our team.

Carol Bell

Carol Bell


Carol Bell, CFP®, has been working in the financial industry since 2007 and joined Better Money Decisions as a Senior Advisor after working for Charles Schwab, Inc. and Vanguard. Her undergraduate degree in Psychology is from Arizona State University and she has a Master of Business Administration degree from the University of Phoenix. Carol specializes in helping clients understand their investments. She is not just a financial planner and investment manager, but loves her role as a financial coach and cheerleader. A native of Arizona, Carol lives in Phoenix with her husband and two children. They spend a lot of family time outdoors- hiking, taking trips in their camper, and visiting national parks.

We will provide you useful and timely information you can use to be #financiallyfearless

Investments got you puzzled? What the heck is a stock, bond or mutual fund?

Purse Strings Approved Professional

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Investments got you puzzled?

What the heck is a stock, bond or mutual fund?

It’s a fact. Stock investors sometimes lose money on their way to wealth. Get over it.

One of the questions many women investors ask is: “What’s a stock, bond, mutual fund, and how do I use them in my portfolio of investments?” They also say, make it simple, easy to understand, and don’t make me feel stupid when I’m reading it. I hear you! You want to know enough to ask intelligent questions and even start investing on your own!

This is a great question so I wanted to dive deeper into this conversation. My goal is to give you more information so you have a better understanding of what each is and how you can use them without fear and trepidation.

I love this quote by Jane Bryant Quinn:  “It’s a fact. Stock investors sometimes lose money on their way to wealth. Get over it.”

You control the volatility (up and down value) by diversifying your asset allocation,(mix) of stocks, bonds, and cash. Of these three, stocks are the riskiest, bonds a little less risky, and cash is safe. This is where you balance your return and the amount of risk you’re willing to take. (I’m not going to address real estate and commodities in detail here.)

There are a total of five asset (investment) classes which include:

Stocks • Bonds • Real Estate • Cash • Commodities

That’s it! Only 5 asset classes. And it gets simpler. Let’s break them down into two categories.

Own • Loan

Let’s discuss each Asset Class in one of the two categories:



Companies that sell stock to shareholders are called public companies. When you buy shares in a company, you own a piece of the company. Some companies share their profits with investors/shareholders through dividends.



You typically lend it to the bank and get interest in return for their use of your funds. This is in the way of savings, certificate of deposits, treasuries, and money market funds.


Real Estate


You buy houses, apartments, office buildings, or raw land. Real Estate is not very liquid so it takes time to convert your investment into cash. Technically, you don’t count owning your own home as an investment. You don’t want to have to sell if you need money.



Companies borrow your money and promise to pay you, the bondholder, back in full at an agreed-upon time plus interest on the loan.



These are tangible products like gold, oil, wheat, which are bought or sold on various commodities exchanges. They are very risky.

Respect the Time Factor:

No one knows what the market is going to do, except it will go down and it’ll go up. So stack the odds in your favor. Here’s a general guideline:

  • Money you’ll need in 1-3 years – put into cash
  • Money you’ll need in 3-10 years – put into dividend paying, large stocks; high rated A bonds; and cash
  • Money you’ll need in 10+ years – put into stocks, real estate, commodities

If you don’t know when you’ll need the money, err on the safe side.

Average per Year Historical Investment Returns for 1926-2020:

3.0% 3.5% 5.7% 10.19%

Inflation T-Bills LT Bonds Stocks

These are long term historical averages which means, you’re investing for the long-term and they are averages. Like a good girdle or spanx, it can hide a lot of jiggles. In any individual year, any of these categories can fluctuate better or worse than the average. “Historically, it has paid to own stocks because 74% of the time, the U.S. equity (stock) market has posted calendar year returns above zero!” (Russell Investments)

Let’s talk about the mechanics of investing.

There are two ways most people invest in stocks:

Individual Stocks

Buy a piece of ownership in an individual company by selecting the stock you want to buy at a specific price. You are responsible for deciding when to buy and sell your shares of stock.




Mutual Funds

Hiring someone else (fund manager) to buy a “basket” of stocks for you. A mutual fund is a bucket of money that is used to purchase individual stocks on behalf of the people who contributed the money. The benefit of this approach is that with a relatively small amount of money you can get pieces of ownership in many different companies (diversification). This helps lower your risk and involves a lot less work on your part in researching individual companies to invest in.

Mutual Funds come in two types:

Actively Managed Mutual Funds

Professional fund managers use different strategies to decide what stocks to buy and sell in their respective mutual fund each day. There are more than 7,000 such funds in the US today. You are essentially betting on the skill of the professional fund manager. There is a cost for this management ranging from .50% to 2.5%. Here’s an example from Warren Buffet about what an impact a 1% fee can have.Buffett made his first investment in March 1942 (when he was 11 years old!). In the 78 years since then, the S&P 500’s value has increased 5,288 times over, including reinvested dividends — turning a $1 million investment into $5.3 billion.But if the exact same investment, with the exact same returns, was managed by an advisor taking a 1% annual management fee, the gain would have been cut in half. In other words, paying a seemingly small 1% fee would have cost this investor a staggering $2.65 billion. Fees matter. If you pay them, make sure you’re getting your value!



Passively Managed Index Funds

The basket of stocks is decided up front – the index it is tracking. There is not a lot of daily buying and selling because it mirrors the index. You are investing in stocks as an overall investment category without trying to bet on the skill of an individual money manager. Index funds have historically done better than more than 80% of active, professionally managed mutual funds.
If you want to keep your life simple (Marie Kondo anyone?) use index funds to invest in stocks.

Another advantage of Index Funds is their cost. They are much LESS expensive than actively managed mutual funds, averaging 0.09%.




So keep it simple: For money you don’t need to spend for at least FIVE years, put it in an S&P 500 Index Fund.

Passively Managed Exchange-Traded Fund (ETF) –

Static Basket of Stocks, traded all day long like a stock. Cost of trading is a commission each time you buy or sell. They are more expensive than Index Funds, 0.44%, so recommend Index Funds over ETFs unless you want more complexity in your portfolio.
Investing in Bonds is very similar:

Buying Individual Bonds:

You lend your money directly to a corporation or municipality and obtain their promise to pay a stated interest rate, and coupon payments usually every six months, with a guarantee to repay your principal at a specific time. Bonds come in a variety of terms, 30 days to 30 years. Shorter term bonds pay less in interest and longer term bonds usually pay higher interest rates.

Mutual Bond Funds:

You invest your money in a “basket” of bonds that are bought and sold by a mutual fund money manager. You rely on the manager to pick bonds in keeping with the mutual funds objective (short term or long term income). In return you pay a management fee and your interest is a combination of all the interest paid by all of the bonds in the mutual fund. The manager replaces maturing bonds with new bonds, so the mutual fund does not terminate with the maturity of any given bond.

ETF Bond Funds:

Bond ETFs offer many of the same features of an individual bond, including a regular coupon payment. Since Bond ETFs hold assets with different maturity dates, at any given time some bonds in the portfolio may be due for a coupon payment. For this reason, bond ETFs pay interest each month with the value of the coupon varying from month to month. An investor’s initial investment is at greater risk in an ETF and mutual fund than an individual bond. Since a bond fund never matures, there isn’t a guarantee the principal will be repaid in full.
Generally speaking, when saving for retirement, stocks are appropriate for most people up to age 50. By then you should start adding bonds into your portfolio to lessen the volatility and start preparing for retirement. There are many different models illustrating how to allocate your money based on your age and the amount of risk you’re willing to take on. As I’ve shown you above, historically speaking, you’ll get the most growth and return out of your stock portfolio. Your bonds are more like the foundation of your portfolio.

A general guideline is for women to invest in stocks equal to 110 or 120 minus your age. So 120-50=70% of your investments in stocks. If you are a risk taker, then keep more invested in stocks. Bonds and cash equivalents are appropriate for the other 30% of your portfolio. This helps you transition to a more conservative portfolio as you approach your retirement, because you are growing your investments as you prepare for retirement. Then you will draw income off your investments in retirement when you want a more stable portfolio.

Personally, I like stocks, and still have 90% of my portfolio in stocks. It’s an individual decision, but you have to be aware of the risks associated with it.


What’s Holding You Back?

Women NEED to Invest because investing helps close the gap:

  • We still only make 80 cents on the $1.00 compared to men.
  • We dip in and out of the workforce taking care of kids and parents.
  • Women’s average balance in 401(k) is 50% less than that of men.
  • We live longer, 5 years longer on average than men.


Investment Obstacles:

You don’t want to do something you don’t understand. The only way you’re going to gain confidence is by doing it. Doing it helps you understand it. Take one small step at a time and keep it simple.

You don’t want to lose money. Investing is not a competition (like trading) no one has to lose. If you invested your money in the S&P 500 over the worst thirty-year period in history, you would still have made about 8 percent/year.

You think investing is the same as gambling. It’s not and here’s why. Gambling is wagering your money on a particular outcome. If your lottery numbers aren’t called, you lose out. Investing is buying something which has value. Over time that value can go up or down, but by diversification and investing over time, you greatly increase your chances of making money, not losing it.

You don’t trust the financial industry. You need to shop smart and find a firm or online brokerage that you want to work with. There are many choices, and I’m happy to recommend a few.
I’ve given you an overview of stocks, bonds, mutual funds and ETFs. You’ve already taken the first step by learning more about this topic. Now start saving, however small. Your future you will thank you!


Linda Lingo

Linda Lingo

Financial Coach

I educate women to achieve financial freedom. Financial health and emotional wealth empower women for a successful, stress-free approach to money. Through inspiration and education, I guide women to understand their money mindset, define their values, establish money goals in alignment with their values so they can spend less, save more, implement their intentional money spending plan (budget), understand investments, build wealth, leave a legacy, and live the life they desire.

We will provide you useful and timely information you can use to be #financiallyfearless

Bridge the Investment Gender Gap with Education


Bridge the Investment Gender Gap with Education

Jason Conger Financial Advisor

I hope this doesn’t come as a shock
to you, but you don’t know


It’s all right—no one does! There’s no shame in admitting you’re not a know-it-all. What is a real tragedy, though, is when you stop learning new things…or if you do learn something new, you fail to do something with that information.

We’ve talked about how female customers are seriously underserved and ignored by the financial services market. Here’s some information you might not have picked up—if financial advisers strive to make stronger connections to female investors, they could unleash $330 billion in global revenue each year.

There’s a number of factors in play with the gap between women needing to invest, and the financial professionals that could serve them.

Traditionally women have earned less than men, so marketing messages tend to bypass them. Too many money pros talk down to women, adopting a condescending rather than helpful tone—and that’s a huge turnoff. Also, financial advisors tend to take a one-size-fits-all approach, using the same language and marketing tactics for women as they do when addressing men. The trouble with that? Women have different needs, perspectives and experiences, so what works for Tom might not fit for Mary.


Too many money pros talk down to women, adopting a condescending rather than helpful tone—and that’s a huge turnoff

Recognizing the need to shift strategy in order to capture female investment clients is the first step—but it’s not the only step

What exactly are their needs? How do you speak their language? What do you say to earn their trust, and engage them without alienating or insulting them? How do you bridge that wide gap and capture their business?

Education is the key.

Continual learning is something we firmly believe at Purse Strings. If you take a look at the biographies of our team members, you’ll notice some impressive educational experience. In addition to degrees from some pretty notable institutions of higher learning, we also have combined decades of experience training professionals like you, to elevate your career and better serve clients by continuing your professional education.

Once you’ve taken that crucial first step of deciding to improve your ability to reach and engage female investors, the Purse Strings course is the next step. During the dynamic three-week online course, you’ll explore various ways you can better position your organization to capture women clients. You’ll learn what women are looking for in a financial adviser, what your business currently is doing right (and where you’re missing the mark), hear strategies you can implement, and gain insights from financial professionals who’ve turned it around in their own businesses. The program can empower you to guide women toward mastering their own money.


Now that you know what you need to learn…

Take a look at the powerful Purse Strings program. Then, give us a call—we’d love to learn more about you, and how together we can build your understanding of the female investment market.

We will provide you useful and timely information you can use to be #financiallyfearless