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April 16, 2021

Category: Portfolios

All You Need to Know About Market Sectors 

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Lydia Blake
Thursday, March 25, 2021 / Published in Impact Investing, Investing, Portfolios, Socially Responsible

Get ready to pull out your notebooks, cause we’ve planned to teach a concept of investing that has needed some explanation for a long while. I would’ve liked to insert a drumroll here, but you’ve already read the title, so you already know we’re tackling market sectors today. 

 

What are Market Sectors?

When it comes to creating an investment plan – especially if yours includes stocks – it’s helpful to know what a sector is to make sure your interests are represented accurately. It’s not common knowledge that the economy is broken up into eleven different market sectors, and each sector has its own unique amount of industries that live inside of it. So basically, a sector is its own grouping of related industries, and knowing what sectors you’re interested in can help guide you into choosing the right investments for your goals.

 

What do the Market Sectors look like?

To give you a quick overview, we’ve listed out all eleven sectors and attached which of the sixty-nine industries belong to them. Once you’ve looked through them all and figured out which ones catch your eye you can then choose to invest in individual stocks within a sector or look for a sector mutual fund to invest in. 

 

Communication services – 5 industries

Diversified Telecommunication Services, Entertainment, Interactive Media & Services, Media, and Wireless Telecommunication Services.

Consumer discretionary – 11 industries

Auto Components Industry, Automobile Industry, Distributor Industry, Diversified Consumer Services, Household durable goods, Textiles, Apparel, Hotels & Restaurants, Leisure equipment, Internet and Catalog Retail, and Multiline Retail.

Consumer staples – 6 industries

Beverages, Food and staples retailing, Food products, Household products, Personal products, and Tobacco.

Energy – 2 industries

Energy Equipment & Services Industry and the  Oil, Gas & Consumable Fuels Industry.

Financials – 7 industries

Banking Industry, Capital Markets Industry, Consumer Finance Industry, Diversified Financial Services Industry, Insurance Industry, Mortgage Real Estate Investment Trusts (REITs) Industry, and Thrifts & Mortgage Finance Industry.

Healthcare – 6 industries

Biotechnology Industry, Health Care Equipment & Supplies Industry, Health Care Providers & Services Industry, HealthCare Technology Industry, Life Sciences Tools & Services Industry, and the Pharmaceuticals Industry.

Industrials – 14 industries

Aerospace & Defense Industry, Air Freight & Logistics Industry, Airlines Industry, Building Products Industry, Commercial Services & Supplies Industry, Construction & Engineering Industry, Electrical Equipment Industry, Industrial Conglomerates Industry, Machinery Industry, Marine Industry, Professional Services Industry, Road & Rail Industry, Trading Companies & Distributors Industry, and the Transportation Infrastructure Industry.

Information technology – 6 industries

Communications Equipment Industry, Electronic Equipment, Instruments & Components Industry, IT Services Industry, Semiconductors & Semiconductor Equipment Industry, Software Industry, Technology Hardware, and the Storage & Peripherals Industry.

Materials – 5 industries

Chemicals Industry, Construction Materials Industry, Containers & Packaging Industry, Metals & Mining Industry, and the Paper & Forest Products Industry.

Real estate – 2 industries

Equity Real Estate Investment Trusts, and the Real Estate Management & Development.

Utilities – 5 industries

Electric Utilities Industry, Gas Utilities Industry, Independent Power and Renewable Electricity Producers Industry, Multi-Utilities Industry, and the Water Utilities Industry.

 

Pitting the Market Sector’s Against Each Other

Now, because not everything in our world is fair, and we live in a free-market society, not all sectors perform the same, and not all of the sectors are the same size. We’ve relisted the sectors and included their overall value and stats on how well they’ve performed in the prior year. 

 

Communication services  +76.58%, $5.50 trillion

Consumer discretionary +324.02%, $5.85 trillion

Consumer staples +136.13%, $4.06 trillion

Energy + 1.56%, $3.25 trillion

Financials +154.81%, $7.53 trillion

Healthcare +224.66%, $6.26 trillion

Industrials +179.82%, $4.58 trillion

Information technology +357.78%, $9.58 trillion

Materials +87.38%, $1.99 trillion

Real estate +29.18% (3-year return), $1.42 trillion

Utilities +114.00%, $1.56 trillion

 

Overview & Our advice

We know that was a lot, but hopefully, it’s given you a little bit more insight into where you’d like to place your investments. And don’t fret! Who says you have to stick to one sector? Not us. Diversifying your portfolio by investing in multiple market sectors and across different industries helps you balance risk if one sector underperforms. We believe in creating investment portfolios that reflect your interests and your values no matter what sectors they might include.

Small Wins & Big Impacts

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Lydia Blake
Thursday, March 18, 2021 / Published in Impact Investing, Investing, Portfolios, Socially Responsible

One of the biggest questions we get about our investment portfolios centers around how one person’s investments are actually significant enough to impact monumental social causes. As individuals, we have a tendency to doubt our importance and settle into the fact that our choices might only trigger consequences in our own lives. Since we don’t value our ability to change the world we live in, we often don’t make choices that impact the change we want to see. Instead, we wait around for someone else to do it. 

We see the same thinking applied to those who choose not to vote in general elections because they have lost faith in our political process and have settled into the false belief that their one vote doesn’t matter. That their opinion, in the scope of the entire nation, doesn’t matter. When you paint the picture of this altered thinking using only red and blue, it becomes a little more difficult to justify. The urgency you have right now to uplift these non-voters and shout their importance from the rooftops is the same urgency our team finds lurking within us when you tell us that your investment portfolio doesn’t really impact much. 

Just because you believe you are small, doesn’t mean you aren’t capable of creating big waves. 

The frequency in which we’ve been receiving these kinds of responses has, to be frank, disheartened our team. So, in hopes of turning some of our readers into full-fledged believers, we’ve decided to bring back one of our favorite articles from many moons ago. 

 

Research on Small Wins

“Small Wins and Feeling Good” was an article published in 2011, by two wonderful writers at the Harvard Business Review. The article reflects on the research and writing done by Karl Weick, a psychologist from the University of Michigan, who analyzed small wins.  

“A small win is a concrete, complete, implemented outcome of moderate importance. By itself, one small win may seem unimportant. A series of wins at small but significant tasks, however, reveals a pattern that may attract allies, deter opponents, and lower resistance to subsequent proposals. Small wins are controllable opportunities that produce visible results.”

Karl Weick, Small Wins: Redefining the Scale of Social Problems

 

The article details the importance of celebrating small victories whether it’s in a professional setting or your personal life. A small win is just what it sounds like, it’s looking at a larger goal and acknowledging each small step you take that gets you closer to completing it. 

One particular point that we love to revisit is embodied in this quote: “large social problems are best broken down into smaller ones with concrete achievable goals.” Take for example the concept of saving the planet from the effects of climate change. So many factors go into that mission, from water conservation to fossil fuels, it seems like too daunting of a task to take on as your personal mission. However, if you take the opportunity to contribute in small ways, like donating to conservation efforts, minimizing your own carbon footprint, or investing in the companies who share your values, saving the earth seems a bit more tangible. 

 

Portfolios, Impacts, and Wins

At Invested Interests, we ensure that the funds we include in our portfolios meet the necessary ESG or SRI standards required. Essentially, we vet the companies you’ll be investing in so that you don’t have to. No matter what your personal mission is, we’re confident that we can create a portfolio that supports it. Currently, our main portfolios focus on the environment, peace efforts, or human rights and diversity. However, we have no problem combining or adding to one of those selections to really encapsulate what matters to you. 

When you invest with our team, you can celebrate the fact that your hard-earned money is not only working for you, but it is also contributing to companies who have a passion to change the world in the same way you do. So, if you feel like you’re needing to increase how many small wins you’re celebrating our monthly investment updates might be the solution to your problem. 

Whether you’re ready to start saving for retirement, or you’ve decided towards investing for another purpose, we’d love to get to know your story and help you reach your goals. To learn more about our portfolios, who we are, and how your investments create impact please reach out to us at (612) 260 2203. We’re excited to hear from you!

What happens to your 401(k) when you quit or lose your job?

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Narcy Cruz
Tuesday, December 22, 2020 / Published in Corporate Social Responsibility, Impact Investing, Investing, Portfolios, Socially Responsible

Have you ever wondered what happens to your 401(k) when you quit or lose your job? While 401(k) funds may not be a tangible asset, it will still exist after deciding to resign your position or have lost your job. 

What happens to your old 401k when you quit a job? 

There are various options for you to choose from, including leaving your account where it is. You may roll over the money from the old 401(k) into a new account with your new employer or move it into an individual retirement account (IRA). While all these are possible options, first make sure you can participate in a new type of plan. Lastly, and one we don’t often recommend is taking everything out however, there are severe tax consequences.

Should I take all my 401k funds?

We don’t recommend taking all your 401(k) funds because this is an employer-sponsored retirement account. It allows you to save a percentage of your pre-tax salary to a retirement account. These funds are invested in a range of stocks, bonds, mutual funds, and cash. It is almost like taking money out of your piggy bank for non-emergency situations. Unfortunately, many have lost their jobs with the current pandemic, and the unemployment check may not suffice for all your expenses. Remember you can borrow in certain situations without a tax penalty. If a 401(k) withdrawal is the only way that you can pay your bills without taking on costly credit card debt, do it. 

What if your new employer does not offer a 401k plan?

So what happens if your new employer does not offer a 401k plan or if you’re not moving to a new employer? You can roll your 401(k) to an existing IRA or a new IRA account. When you have a 401(k) plan with your employer, you don’t get to decide what companies to invest in, but now you have full reigns to freedom to invest how you want, where you want, and in what you want!

Invest in companies that align with your values

Now that you are free to invest in companies that align with your values, consider impact investing as a choice! Click here to view a more in-depth blog-post about 401(k) rollovers into social responsible investments.  Impact investing allows you to invest your money into companies, organizations, and funds with their intention to be beneficial to social or environmental issues. At Invested Interests, we make it easy for you to rollover your old 401K into a new retirement account. We work tirelessly to help our clients express their passions through their investment decisions.

Learn how to get started!

Other options

Let’s say you are about ready to retire. You can begin taking qualified distributions from your 401(k) after the age of 59 ½, which means that when you decide to take out some money without paying a 10% tax penalty for early withdrawal. Whatever you decide to do with your 401(k), Invested Interests is here to help you in your strategic financial decisions and support in choosing impact investing portfolios.

The Basics of Mutual Funds 

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Lydia Blake
Tuesday, December 15, 2020 / Published in Impact Investing, Investing, Portfolios, Socially Responsible

You’ve probably heard the term “Mutual Fund” before.  Maybe it was in passing at work or around the dinner table with your in-laws, but there was never any real clarity around what they actually are, so you never looked into them. You’re not alone. A little over a year ago less than half of U.S households owned some kind of mutual fund. Understanding what a mutual fund is, paints a clearer picture of why it can be an asset for your financial goals and opens the door to new investment opportunities like ESG Funds! We’ve done our best to present you with the mutual fund basics so you can decide whether or not you’d like to join our bandwagon.

 

What is a mutual fund?

Mutual funds have a complex name, but they aren’t as overwhelming as they sound. Essentially, a mutual fund is a collective investment that pools money from multiple investors. That money is then used to purchase a variety of securities like stocks or bonds. By joining a mutual fund you’re purchasing a share of those collective investments. 

 

Why are mutual funds used for?

People join mutual funds for a variety of reasons, and sometimes new investors don’t even have a good understanding of what they are before joining! Here are some of our favorite reasons from TD Ameritrade for joining a mutual fund.

  • They allow you to create a diversified investment.
  • They are managed by a financial professional.
  • They allow investors to participate in a wide variety of investments.

 

How do I get started? 

The simplest way to start investing in a mutual fund is to find a financial advisor or investment management company that you trust. Knowing who you should choose to manage your mutual fund shares depends on your personal values and goals. Here are a few things to consider.

 

  • Do you value human relationships?  Some management companies are completely online and primarily interact with their clients using artificial intelligence (ai) software. However, these Robo Advisor companies don’t allow you much control over what kinds of funds are available to you. The other option is to opt for a company that handles their business face-to-face and is interested in getting to know you and your goals.

 

  • Do you want to know your investment is contributing to positive change? You can join any mutual fund available to you, but there are some that are more ethically sound than others. Knowing that your money is going towards a noble cause like environmental protections, human rights & diversity, or global peace efforts is an added bonus to your investment. Besides, no one wants to admit their booming investment is actually at the hands of companies with poor morals. 

 

  • How much do you want to contribute to the start of your investment? If you’re about to invest in your first mutual fund you’ll need to determine how much money you want to contribute to open your account. Some management companies have investment minimums, and won’t take clients who can’t afford to meet that amount. Other companies, like us, opt to have no investment minimum in order to get as manypeople on the right financial path as possible.

 

Connect with us if…

If you want a management company that operates face to face, ensures your investments align with your values, and has no investment minimum, we think we’d be a great match for you! 

We’re eager to get to know you and learn what goals you’re working towards and apply our services accordingly. To learn more about what we do, where we come from, and how we can help, visit our website and connect with us today!

How to Invest in Peace

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Lydia Blake
Tuesday, December 08, 2020 / Published in Impact Investing, Investing, Portfolios, Socially Responsible

This topic hits a little different for us. Investing in Peace is so closely related to the story of Invested Interests. Whether you’re talking about investing in companies who make efforts to support non-violent negotiations or divesting from companies who turn a blind eye, supporting peace efforts with your portfolio is something everyone should pursue. 

Our Story

We don’t often talk about our story, because well we like to shine the spotlight on those who need it most but today, our story and our topic of discussion go hand in hand. 

The passion behind invested interests began in 2003 with news of the Darfur Genocide. During this crisis, the Janjaweed began slaughtering, raping, and torturing Darfuri men, women, and children in Western Sudan. To take a stand against these atrocities, the Sudan Divestment Task Force led universities, endowments, and other institutional investors to divest from companies supporting the regime. 

Invested Interests worked with the Sudan Divestment Task Force to make their divestment list available through online tools and portfolios that helped individuals investors avoid the targeted corporations. Divesting in specific companies, like Schlumberger and PetroChina, has had a significant impact in the region. And while human rights in Sudan remains a pressing issue, progress has been made since 2008.

 

Support Peace with your Portfolio

At invested interests, we take two approaches when it comes to supporting peace. We focus on good companies to invest in and bad companies to divest from.

Invested Interests' Peace Portfolio

We believe that companies can play a positive role in promoting peace and limiting conflict around the world. Our peace portfolio follows the following guidelines to ensure your hard-earned money makes the biggest possible impact.

We invest in: Companies promoting conflict resolution, companies promoting international relief efforts, and companies with no regime affiliations.

We divest from: Guns and weapons dealers and manufacturers, companies working with regimes in armed conflict, and companies with military contracts and war profiteering.

 

Why you need to invest in Peace

According to the world population review, there are currently 232 countries currently at war. Some of the biggest conflicts within that list are those that are occurring in Afghanistan, Yemen, and Syria. 

Afghanistan

In 2019 alone, this seemingly never-ending war claimed over 41,700 fatalities. Although this war has been on and off since 1978, this current phase has been ongoing since 2001.

Yemen

The war in Yemen began five years ago and is estimated to claim over 233,000 lives by the end of 2020. The United Nations has called this conflict one of the “greatest preventable disasters facing humanity”.

Syria

The on-going conflict in Syria has been declared the second-deadliest war of the 21st century. This civil war began in 2011 and today has approximately 500 U.S. troops deployed in the country. According to the Council of Foreign Relations, this conflict has internally displaced 6.2 million people.

 

You can make impactful choices

Oftentimes it’s really easy for us to turn a blind eye to what is happening in foreign countries. We simply get lost in the internal issues we see in our daily lives. However, just because we don’t feel the ramifications of these conflicts, it doesn’t mean we can’t have a positive impact. If you’re unsure what companies are included in your investment portfolio, it’s hard to determine whether or not your financial assets are contributing to peacebuilding efforts. 

Through impact investing, you not only have peace of mind that you aren’t indirectly supporting armed conflict, but you’ll have confidence in knowing your investments are doing the most to make a positive impact. If you’re unsure how to start impact investing or are curious about other ethical investment strategies, we’d love to get in touch. Connect with us today to start making an impact with your investments. 

Where are we now? Paris Agreement

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Narcy Cruz
Thursday, December 03, 2020 / Published in Corporate Social Responsibility, Impact Investing, Investing, Portfolios, Socially Responsible

Earth to readers! As a global pandemic is in full effect, it is essential not to forget about another worldwide crisis that has been unfolding way before the pandemic: climate change.

Global warming is not something new, human activity started influencing climate change in the 1830s. While the industrial revolution may have had its advantages like creating more job opportunities or inspiring innovation, as we began to industrialize, we also started to change our atmosphere’s chemistry by emitting large amounts of CO2 and other pollutants to our air. It is important to note that industrialization was not the only contributing factor to global warming. The coal industry, for example, on its own, generates 1.7 billion tons of carbon emissions every year. We know for sure (backed up by science) that humans have contributed to climate change.

Where are we now?

During the 2016 Obama administration, the United States joined the Paris Agreement. The Paris Agreement is an agreement in which at least 55 countries representing at least 55 percent of global emissions formally join and aim globally to respond to the threat of climate change. Joined parties are required to report their emissions and their implementation efforts regularly. Unfortunately, as of June 2017, the Trump administration decided that the United States will cease all implementation of the Paris Agreement. As a country, political decision-makers are currently not taking action towards climate change as our current president believes global warming is a hoax. However, the Mercator Research Institute on Global Commons and Climate Change report that around 42 Gt of CO2 is emitted globally every year (1332 tonnes per second), predicting that the CO2 budget will be depleted in just over seven years. 

Moving Forward

With the recent presidential election, the president elect, Joe Biden, said he would apply to rejoin the Paris Agreement on his first day in office. Following the reapplication, he “would lead an effort to get every major country to ramp up the ambition of their domestic climate targets.” This news brings a new sense of hope for climate change and the future of our earth. But what can YOU actively do to reduce your carbon footprint? 

What can we do?

While climate change solutions are necessary globally, you can actively do things to reduce your carbon footprint. You can start by measuring your current carbon footprint through a carbon footprint calculator. Once you have figured out your carbon footprint, you can implement ways to reduce it, including thrifting clothing instead of buying fast-fashion, buying local produce, or even carpooling when possible. 

Climate Change Investing

To ensure that our financial investments are not funding an unsustainable future. It is critical to divest from companies using fossil fuels, creating nuclear waste, and destroying natural resources. Invested Interests, helps you identify those environmental funds. Invested Interests environment portfolio invests in green companies, alternative and renewable energy companies, and companies promoting sustainability.

Reach out to our team today!

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