Reflecting Your Values Through Investing

Money talks is an adage many of us have heard our whole lives. Money is the transactional element of our lives that keeps the world running as we know it, and how you spend your money does say a lot about you.

Value-based purchasing has always been present in our society. We have the right to choose where and how we want to spend our money. You may opt to purchase your son’s soccer cleats from the local sports store rather than the large box store because you want to support your neighbor. Choosing to donate to a church, charity, or political campaign says a lot about what values you want to see in your community. So, why should investing be any different?

When it comes to investing, many people don’t think they have a choice. Whether they are going at it on their own or working with an advisor, most individuals believe that choosing the fund with the highest return is the most important piece of investing. And don’t get me wrong, returns are important. But the point of investing is to grow your wealth so you can go back to the basics – spending it where and how you choose.

So why not invest in a way that is meaningful?

What are your options?

• ESG funds are the most well-known form of socially responsible investing. This is investing in a fund that reflects your environmental, social, or governance concerns.
• Direct-indexing is a lesser known version of values-driven investing, which is a personalized approach to investing that differs from ETFs and Mutual Funds in that the investor is actually purchasing stocks to mirror an index while having the ability to exclude stocks based upon their personal preferences. Since the investor owns the stocks in this situation, the investor also has more control over how much they will pay in taxes and how they can react to changes in a company’s policy.

How do I know if one of these strategies is right for me?

Talking to your advisor and your CPA is a good place to start when deciding on an investment strategy.

What else should I consider when thinking about investing based on my values?

Investments are tools to help reach your goals. So before deciding on the best investment strategy, you must first figure out where you are going and what you want before picking an investment strategy. This can be achieved by completing financial planning with your advisor and your CPA.

Securities offered through Avantax Investment ServicesSM, Member FINRA,SIPC. Investment advisory services offered through Avantax Advisory ServicesSM. Insurance services offered through an Avantax affiliated insurance agency.

Rushton and Avantax are not affiliated.

Tax services are provided by Rushton are separate and apart from Avantax.

The strategies mentioned may not be appropriate for all investors. Please consult your financial and/or tax advisors to determine a strategy that works best for you.

The views and opinions presented in this article are those of Rushton and Rushton Wealth Management and not of Avantax Wealth Management® or its subsidiaries.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Past performance is not a guarantee of future results. Neither diversification nor asset allocation can assure or guarantee better performance/profit and cannot eliminate the risk of investment losses in declining markets.

While tax loss harvesting can be a valuable strategy, its effectiveness depends on your individual financial situation and tax circumstances.

Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.

Converting from a traditional IRA to a Roth IRA is a taxable event.

A Roth IRA offers tax free withdrawals on taxable contributions.

To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.

Tax Free – Income may be subject to local, state and/or the alternative minimum tax.

Real Estate disclosure: Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry.

There is no assurance that the ESG investing strategy or techniques employed will be successful. Past performance is not a guarantee or reliable indicator of future results.