How We Invest
We take our fiduciary responsibility seriously. After all, it’s your life savings we’re managing! We’re committed to intensive research and fiscal discipline in order to pick quality investments for you. Based on your financial needs and goals, your tolerance for risk, and your values, we provide you with an allocation of suitable investment assets. We’re confident we can provide this level of quality to you not just because of our expertise managing SRI portfolios for decades, but because our certified professionals embrace rigorous professional financial standards to properly evaluate and recommend investments to you. Our Certified Financial Planners (CFP®), Accredited Investment Fiduciaries (AIF®), Accredited Asset Management Specialists (AAMS®), and a Certified Private Wealth Advisor (CPWA®), Holistic Financial Planner, and a Ph.D. economist reflect such diligence and expertise.
Our Approach to Investing: Diversification, Modeling, and Monitoring the Markets
We see our role as advisors as helping you to achieve your financial goals while recognizing your appetite for risk and your social and environmental priorities. We believe in investing for the long-term, meaning that while the economy has up and down cycles, the best approach to an investment portfolio is to mitigate systemic risk by holding many categories of assets at all times. We continuously monitor the markets and our managed client portfolios to make sure we’re maintaining an optimal portfolio composition and making adjustments as necessary. Rather than trying to time the market’s constant fluctuations and volatility, we adopt more of a “buy and hold” philosophy and prefer to maintain a consistent allocation that accentuates the benefits and risks of each type of investment in various economic conditions. It’s been our experience for over 30 years that this makes for a smoother ride during the peaks and valleys of the markets and the most reliable and consistent way to earn solid returns while managing risk to match your level of comfort with volatility. We analyze investment performance in each asset class on at least a quarterly basis in order to determine the holdings and weightings of the portfolios. NI advisors participate in conference calls at least monthly to discuss investment holdings and any potential changes to the model portfolios. We don’t leave this responsibility to others; we all serve on the investment committee and know exactly what we’re recommending and why.
Nearly every category of financial assets now has competitive, socially responsible mutual funds and money managers from which we can build well-diversified portfolios. Using tools and resources from Charles Schwab & Co., US SIF: The Forum for Sustainable and Responsible Investment, Morningstar®, As You Sow, fi360, Institutional Shareholder Services, and others, we conduct ongoing, in-depth research on the leading SRI mutual funds and money managers and utilize those that have proven performance within their asset category, all while seeking to keep custodial and transaction costs low. Our portfolios have weathered various economic conditions over the years because of the work we’ve put into research, and so we are confident in our understanding of how specific combinations of investments work together to reduce risk and enhance performance.
Natural Investments maintains several model portfolios across five risk levels from conservative to aggressive that include investments meeting our rigorous financial criteria (see the Risk Tolerance page to see where you may fit). In addition to our Classic SRI model, we also feature Green Economy and Fossil Fuel Free portfolios (see below).
Low Risk, High Social Impact Options
For the lower risk, more stable portion of your portfolio, you can own top performing funds and managers of municipal and state bonds that support meaningful infrastructure, responsible companies, and federal government agencies that provide home, business, agricultural, and student loans. To protect you from periodic weakness in the US dollar, we include international bonds. We also invest your money in community development financial institutions through intermediaries such as Calvert Impact Capital, whose fixed-rate notes support high-impact social projects such as domestic and international micro-loan programs, housing and business creation in low income communities, and the revitalization of urban and rural areas.
High Risk Equity Investments
The opportunity for your portfolios to appreciate in value depends on the higher risk associated with owning stock in responsible companies. Your portfolio includes a wide variety of stocks – large to small companies, in developed and emerging markets, and including specific sectors of the economy. Companies are screened in and out of portfolios using a variety of criteria, such as their economic sector, labor and human rights practices, environmental impact, and board diversity and governance issues. Details on these practices are further explained in our Heart Rating section, which rates the breadth and depth of SRI mutual fund social criteria.
Fossil Fuel Free Portfolio
If you are concerned about the severe impacts of climate change and environmental toxicity and degradation, your portfolio can address carbon emissions and negative environmental impacts and help transition society to a greener way of life. Our Green Economy portfolio assumes slightly higher risk than our Classic SRI portfolio by investing a higher percentage of the assets in renewable energy, recycled and biodegradable products, organic and healthy food, natural fiber, green building, and clean technologies.
We were a pioneer with our Fossil Fuel Free Portfolio, and while it integrates many other environmental, social, and governance factors, it specifically excludes companies involved in fossil fuel exploration, extraction, production, refining, and distribution, as well as utilities that use fossil fuels for energy production. We are pleased to partner with As You Sow, the nation’s non-profit leader in shareholder advocacy, to monitor the ever-changing holdings of mutual funds through its