The Next Stage of Sustainable Investing
Friday, August 15, 2014
Investing is no longer about style boxes. In the period ahead, it will increasingly be about goals, and about solutions. It will not be just about equities vs. fixed income, or large-cap vs. small-cap, or core vs. value vs. growth, or correlated vs. non-correlated. We saw a plethora of offerings in the so-called non-correlated or alternatives bucket following the 2008 downturn — long/short, market neutral, absolute return — and the financial services industry will continue to come out with new products, some of which are responsive to actual investor needs while others are designed primarily to gather assets and revenue. But new products alone are hardly the solution.
The fact is that investors remain somewhat spooked by the market. Once your 401(k) has been turned into a 201(k), you never really forget that — even after the market has surged back and your assets have been restored. Moreover, investors don’t really trust big financial institutions, even if they trust their individual financial advisor. They are cautiously optimistic, however, and our industry needs to find ways to be responsive — both to their wary skepticism as well as to their cautious optimism.