RT Journal Article
SR Electronic
T1 Practical Applications of Achieving Goals While Making an Impact: Balancing Financial Goals with Impact Investing
JF Practical Applications
FD Institutional Investor Journals
SP pa.2021.pa470
DO 10.3905/pa.2021.pa470
A1 Parker, Franklin J.
YR 2021
UL http://pa.pm-research.com/content/early/2021/12/03/pa.2021.pa470.abstract
AB In Achieving Goals While Making an Impact: Balancing Financial Goals with Impact Investing, from the Spring 2021 of The Journal of Impact and ESG Investing, author Franklin Parker of Directional Advisors evaluates how impact investors prioritize their selected impact mandate as compared to their overall portfolio’s performance and their financial goals. He further develops a goals-based framework to help determine an investor’s willingness to sacrifice financial returns in pursuit of the impact mandate. He determines that priorities change in response to changes in both market and portfolio conditions, including volatility as well as required and expected returns.Increased volatility is associated with increased willingness to sacrifice portfolio returns. As the value of the expected and required portfolio returns approach one another, investors tend to be less willing to sacrifice portfolio returns. Parker translates his findings into practical guidance that will enable investors and advisors to align their financial objectives with personal priorities related to impact investing.