Farewell 2019
I’ve sat with a blank blog canvas for a couple of days now, trying to decide how to write up my end of the year/decade piece. Should I talk about all of the changes I’ve seen in the socially responsible investing industry? Should I post pictures of what I looked like 10 years ago and what I look like today? Should I brag about Earth Equity Advisors growth over the past decade?
What I’ve decided to do is to pick a few highlights over the past decade, throw in some observations, tell a couple of stories and get ready for 2020…
I’ll start out by bragging - Over the past ten years we’ve seen the assets that Earth Equity Advisors manage grow from about $18.5 million to $93 million as of Dec 31st. Back in 2009, the firm was named Krull & Company and it was just me. We changed the name of the firm in 2017 and there are five of us, working hard to align our clients’ investments with their values!
In 2019, we were awarded a Best for the World B Corp designation for the fourth straight year. I also was one of the first people to earn the Chartered SRI Consultant (CSRIC) designation from the College for Financial Planning.
2020 will bring our new sustainable and responsible digital investment platform, Align Your Green with a low minimum balance of just $5,000. Can’t wait for it to launch!!!
Speaking of investing, there has been an alphabet of new terms related to responsible investing come online over the past decade. What I used to call SRI, socially responsible investing morphed into socially & environmentally responsible investing and now what we call sustainable, responsible and impact investing. Yea, that’s a mouthful! We’ve also seen the proliferation of ESG (Environmental, Social, Governance) measurements and investment options. Everybody and their brother now offers their latest “low carbon,” “ESG,” or green ETF or mutual fund. The big guys from Blackrock to Fidelity to Vanguard have jumped on the bandwagon. Unfortunately, since SRI is not their focus, mistakes sometimes happen, like when Vanguard included gun stocks in a gun-free fund.
Remember - if you’re going to invest responsibly, you must look under the hood of any fund or ETF you’re considering buying. Many (if not most) include fossil fuel companies (extraction, processing or transportation), fossil fuel utilities, chemicals, mining and more. Most ESG funds are basically greenwashing. Look under the hood, or use a qualified expert on responsible investing!!!
In the last decade, I lost both my mom and my dad. Mom died on tax day, 2014 and dad died July 28, 2015. My parents were older when they had me: mom was 43 and dad was 46. They were always “old” in my mind. They were part of the so-called greatest generation. Dad was a WW II vet serving in France and Germany. Mom worked in a factory until she became a school lunch lady. Dad was also a factory worker and then a laborer and bus driver. They worked hard and I have no doubt I received my work ethic from them.
Because they had me so late they were the same age as my friends’ grandparents. My dad had tuberculosis after WW II and the doctors didn’t think he would live. Somehow that 5’9”, 130 pound guy survived and lived to 91. It’s weird sometimes remembering them and knowing that I can’t just pick up the phone to check in. Mom used to call and leave me messages, and just so I knew it was her, she would finish by saying simply, “mom”. They are missed.
At my wedding, 2004
Around 1969
Melissa and I celebrated our fifteenth anniversary this year! It’s been a wonderful ride, full of love, laughs, travel and fun. It seems like just yesterday we were saying “I Do” in the fragrant garden at Forsyth Park in Savannah, surrounded by family and friends. It continues to be a great ride!!!
Speaking of a great ride, how about that stock market this year? Earth Equity’s fossil fuel free, Green Sage Sustainability portfolio returned about 30% on the year (past performance is not indicative of future results). Our other portfolios performed quite well too, keeping pace with their benchmarks.
I’ve heard a lot recently about how the current administration takes credit for the gains, but as we know, stocks typically trade on long-term fundamentals, not short-term policies. In fact, I would argue that the current gains have happened in spite of the current administration, not because of it. The Chinese and European tariffs and trade wars have had a negative effect on the market, and the pressure to lower interest rates is a direct result of the trade war impacts. Lower interest rates hurts everyday Americans because there is nowhere safe to put your money and receive any type of interest. For folks on a fixed income, it makes things very difficult!
So, you’re probably wondering what about 2020? Where are the markets going? Will there be a recession? How will the election affect things? Good questions!
Remember, long-term fundamentals determine where the market is going. Fundamentals remain fairly strong and while valuations are somewhat high, they are not exorbitant. I follow an analysis of the US economy from a company called Clearbridge. They have an indicator they call “Anatomy of a Recession,” which looks at 12 variables in the economy and judges the risks of a recession based on historical figures.
Based on their analysis, caution is warranted, but a recession is not imminent. Check out their page and you can learn more and make adjustments to each of the indicators based on your own thoughts.
How will the election affect things? Simple: It will add volatility. People will be trying to guess who will be the Democratic nominee, who will win the general election, will the Democrats take the Senate? They’re all guesses. Remember a couple of years ago - all of the polls said that Hillary Clinton would win the presidency? They were all wrong!
Speculators try to play the markets based on political results. Investors have a diversified, prudent portfolio designed to withstand all kinds of events with an eye on long-term financial success.
I love photography! One of my favorite things to do is travel with my camera in hand, ready to shoot that sunset, that ancient church or that unique bird on the branch next to me. It’s hard to pick my absolute favorites, but here are some of my top photos from each of the last 10 years:
I get asked all the time if divesting from fossil fuels hurts client performance. Well, the numbers show just the opposite - not owning fossil fuels actually helps performance.
The chart above looks at the Brown Advisory Sustainable Growth Fund which is fossil fuel free versus the S&P 500 versus the energy sector. As you can see, looking back to 2012, energy greatly underperformed the market and a fossil fuel free fund.
Jeremy Grantham, founder of GMO investments, a hedge fund initiated a study to see if removing any sector from an investment would impact performance. The study showed very little impact from divestment, and in many cases (such as energy), performance turned out to be better. Read about it here.
Over the last decade, we’ve moved twice. First, we moved from Sapelo Island, Georgia to Asheville. It was a wonderful move to a great town, full of progressive folks, great food, beer and outdoors opportunities! Earlier this year, we moved across town, downsizing to a 1700 square foot home in town and loving the simplicity of a smaller, newer house.
I read or listened to 36 books this year. Some good, some not so much. Here are my ten favorites:
Educated by Tara Westover - My favorite non-fiction book about a girl who withstands the pressures of fundamental Mormonism to move herself beyond and thrive despite unbelievable odds. Read this book!!!
The rest are in no particular order…
Neverwhere by Neil Gaiman
The Lost City of the Monkey God by Douglas Preston
The Orphan Master’s Son by Adam Johnson
Bobby Kennedy: The Making of a Liberal Icon by Larry Tye
The Institute by Stephen King
The Testaments by Margaret Atwood (Sequel to The Handmaid’s Tale)
Change Agent by Daniel Suarez
Ape House by Sara Gruen
The Man of Legends by Kenneth Johnson
If you’ve read this far, I am grateful! My blog posts have been intermittent this year and I apologize for that. I want to finish up with gratitude. This list is by no means complete and if you’re not on it, it’s nothing personal, just my newly minted 50 year old brain forgetting some things…
I’m repeating myself here, but I’m grateful for my amazing wife Dr. Melissa Booth. Her resilience, determination, creativity and intelligence are an inspiration to me. I’m so excited to see her projects come to fruition over the next year!
I’m grateful for my nephew, BJ Witkopf whom I have tremendous love and respect for. Like Melissa he is resilient, determined and intelligent. He’s a great father to Aiden and Ella, a creative artist and a hard worker!
I’m grateful for my amazing team at Earth Equity Advisors. My business partner Neill Yelverton truly is the yin to my yang. I’m very lucky to have steadiness and thoughtfulness running the operations of the business. Kerry Keihn continues to show that she will be the leader of the company some day with her hard work, client service and dedication. Leesa Sluder amazes me with her client service. Her ability to nurture client relationships is beyond anything I could ever do. And finally I’m grateful for Matthew who keeps the front desk organized and efficient and treats our clients with the utmost respect and appreciation.
I’m grateful for our clients. Some folks have been with me for 20 years, since the old Merrill Lynch days. I value each and every relationship I have with my personal clients and the firm clients. Without them, we would not be able to attain our mission to change the world through responsible investing!
I’m grateful for our new home. It’s so nice to sit here finishing up this blog without concern about maintenance and chores around the house.
I’m grateful for our family in Asheville. It’s so nice to regularly see people I grew up with and their families. Tim, Nancy, Eliza, William, Liz, Mark A, Mark R, Denielle, Isiah, Sam and Paul. You all bring a warmth and familiarity that comes with home.
I’m grateful for my trainer Nat Holmes. Three days a week he puts me through a workout that I would NEVER do on my own. He (tries to) keep this 50 year old body in shape, despite my whining.
I’m grateful for my good friend David Herdlinger who trades political cartoons with me via text weekly. He inspires me every day with his resilience while battling cancer and maintaining an amazing life.
Ten years ago in the Bahamas
Last week with my nephew BJ
Obligatory then and now photos
Thank you for taking the time to read this. There is so much I missed, simply either couldn’t remember or fit into the blog. Know that I am grateful for every person in my life: those who make me laugh, who pushes me and who helps me to make the world a better place. Happy New Year and New Decade to you all!
