5 Reasons Why It’s A Good Time To Invest: Teach Your Children Well

It was not the normal “Woodstock of Capitalism” scene in Omaha recently, but 89-year-old Warren Buffett went for five hours straight at the Berkshire Hathaway shareholder meeting. Incredibly impressive. Historically, I have enjoyed witnessing this Rite of Spring live – the experiences inspired the creation of CoPeace as a holding company.

It was not the same listening to “The Oracle” in the virtual setting, and he was clearly more subdued and measured without the live shareholder-fans. But he continued to expand on deep wisdom for all of us, and especially our future generations, to hear.

History, it turns out, teaches. Warren has learned well. Throughout his five hours of musing, Mr. Buffett went through some of the trying times we have collectively experienced and explained how patient investors win over time, and that we must continue to invest now in our better future. Of his many gem-quotes from this year’s meeting, I like this one: “I do not want to come up with anything different than capitalism, but I certainly do not want unfettered capitalism.”

So, inspired by Warren, I have taken the liberty to modernize, channel, and incorporate my interpretations of his teaching. Here are five reasons it is a good time to invest, from my perspective:

1. Timing – Reading the Defense.

If you are able, it is smart to invest now and continue to dollar-cost-average as things ebb and flow, even if it is a small amount every month. One of the benefits of the downturn, especially for young people, is that people can get into the market at a discount from the recent highs. As a former coach, we always taught our players the ability to “read the defense” to make appropriate decisions and adjustments. In the case of markets, the defense changes more unpredictably than in sport, so instead of trying to time things perfectly, it is best to steadily add to your portfolio, especially with inexpensive ETFs that are diversified (several are more sustainably based compared to traditional S&P 500 ETFs, like Change Finance).

2. Opportunity to Affect Real Change – Purpose and Profit.

Another one of Warren Buffett’s quotes we reference often at CoPeace is, “Good profits are simply not inconsistent with good behavior.” Impact investing marries some of the traditional intent of philanthropy with achieving a strong financial return. I fully believe the new wheels of commerce will have to include much more inclusive bottom lines. Although there is an understandable objection of wanting to spend money right now when the future seems unclear, the timing is now to begin to bring about real change. I strongly recommend reading Jed Emerson’s Purpose of Capital.

3. Engaging Young People.

We are in the early stages of a huge (multi-trillion dollar) transfer of wealth from the Boomer generation to younger generations. The Oracle of Omaha always encourages a long-term vision, but Mr. Buffett is not Mr. Perfect and he would be the first to admit this. And though I personally was originally deeply attracted to his model and still own some BRK.B shares, I do not agree with a lot of what he invests in. Young people clearly have passion around environmental and social impact. Social entrepreneurs and impact investors account for this impact much better than many traditional industries.

4.Potential for Dramatic Returns.

With expanded equity crowdfunding and new ways to democratize investment, there are new tools to provide long term returns. Investing in companies that are funding business as a force for good will be the “new normal” after the COVID pandemic ends. These companies have the potential to provide returns that exceed market returns. Be aware, though, that, as Jim Cramer has said: “Bulls make money, bears make money and pigs get slaughtered.” (I can’t believe I am quoting Jim Cramer in a blog inspired by Warren Buffett, but I have used this quote and wanted to attribute appropriately!) One of Mr. Buffett’s most principled teachings is that equity investing beats bond investing over the long term, with patience.

5. Love – Empathy.

Ok, most/many people do have a portfolio, so much of what I argued above is completely moot. At CoPeace we are trying to provide new tools to give more people access to the ability to initiate some equity, to begin to retrace the wealth disparities we are facing. COVID can provide a restart and engage new communities and opportunities. Bottom lines that include profit, planet, people and all of the interdependent, caring variations, will become the norm.

And, yes (thanks to Crosby, Stills & Nash – seemed an appropriate way to end a nod to Mr. Buffett and Love and the Future!):

Teach your children well,

Their father’s hell did slowly go by,

And feed them on your dreams

The one they picks, the one you’ll know by.

Don’t you ever ask them why, if they told you, you will cry,

So just look at them and sigh

And know they love you.

Blog extra… We recently conducted a Financial Chalk Talk, especially designed for coaches and the sport community that had not had a lot of access to much financial education growing up (which is most of us). The talk featured many of themes discussed above and you can see it if you click here.

Craig Jonas is the CEO and founder of CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.