How Values Help You Decide
A value is something that makes sense to you and that you feel good about. They are present when you apply your intuition and make decisions. When we ignore our values while making decisions, we end up with results that don’t make sense to us or that we feel unhappy with. We find ourselves going down a path that feels off track. This couldn’t be truer where investment decisions are concerned.
If you think about the things in life that you really care about, do your investments reflect them? Your values represent the important things you care about and stand for, but do you invest in businesses that produce, provide, or do the things that reflect them? For example, say one of your core values is healthy eating and maintaining a healthy lifestyle. Why would you then invest in a company that produces and promotes high-fat, high-sugar, low-nutrition food? Or perhaps you value local economic development by supporting small businesses and manufacturing. You wouldn’t want the bulk of your investments to be in companies that do all of their manufacturing abroad, would you? In both of these examples, if you invested in the businesses described, your investment choices would not align with your values. More values-aligned investment choices would be companies that produce and promote healthy, organic, nutritious food, or local manufacturers and producers.
The first step toward values-aligned investing is to develop a greater awareness about your values and how you can make investment decisions that agree with your core values. Your investment attitudes, behaviors, and activities simply should not be at odds with what you believe in.
One of my core values, for example, is fairness. When I encounter a situation where people are being treated fairly, it makes sense to me from an analytical standpoint. I feel good about fairness. It evokes a positive emotion. I intuitively sense that fairness is a good thing, and I believe it will serve me and others well in future interactions and endeavors. When I experience being treated fairly or witness it with others, I physically feel good—I might even feel positive tingles. If I come across a situation and I can identify fairness in it, I am able to make a decision more quickly. Contrast that with a situation where people are not being treated fairly. Analytically, I know that unfairness is not sustainable in the long run, and witnessing unfair situations makes me feel incensed and agitated. Because of this, I know I want to invest in companies that treat people fairly—including their customers, suppliers, employees, and investors—and I strive for fairness in my own negotiations with companies and entrepreneurs.
If integrating analysis, emotion, body, and intuition into decision making is the long form, aligning your values with your decisions is the short form.
If you ever encounter a situation where you need to make an investment decision and are unsure what to do, and reflecting upon your values doesn’t make it any clearer for you, that is when the tools and techniques of integrated investment decision making will come in handy.
How Values Influence Your Motivation to Invest in the First Place
The first thing people ask me when they are thinking about investing is, “What should I invest in?” But the first question they should be asking is, “Why am I investing?”
In Chapter 2, I talked about the motivations for investing. The first steps is to look at your motivations. Knowing what your values are will help you answer this question.
Using your values to determine why you are investing, rather than blindly following fads or echoing other people’s reasons, is more likely to result in a satisfying experience—not to mention outcomes that match your expectations.
Here’s an exercise to help you apply your values in deciding why you are investing. First, let’s review the list of possible motivations from Chapter 2:
Status
Power
Leadership
Connecting with others
Security
Future consumption
Preparing for obsolescence
Innovation
Legacy
Resources for decision making
Resources for exchange
Which of these motivations represent your current reasons for investing?
Whereas motivations are the reasons you have for acting in a particular way, values are your principles or standards of behavior, or your judgment of what is important in life. It is possible to be motivated by something that is incongruent with your values. The following validity and completeness tests are designed to help you develop better awareness around your values and how they affect your investment decision making. They can help you to make decisions that are more aligned with your values.
Take a look at the list of motivations again. Which ones reflect your values? I call this the validity test because it gets you to check whether your motivations to invest accurately reflect your values. For example, is it power that motivates you to invest? If so, is power something you value?
Now, try the completeness test. Keeping your core values in mind, look at the list of motivations again. Are there any that better reflect your values and are missing from the list of your current motivations for investing? How do you feel about why you are investing? Do you have feelings of dissatisfaction or doubt, even if it’s just a nagging feeling in the back of your mind? These could be signs that something is amiss.
Let your decisions and actions as an investor reflect your core values. If your motivations for investing are not aligned with your values, the outcomes certainly won’t be aligned either. If your motivations are aligned with your values, then you have a good foundation for making investment choices that you will feel good about, even proud of, and that will make sense to you.
List of Values
For example, I value the following:
Abundance
Curiosity
Discovery
Education
Fairness
Honesty
Integrity
Leadership
I believe my resources are sufficiently abundant to invest some of them. I value curiosity (so much so that I named my investment and management company Pique Ventures—as in “pique your curiosity”), and I have a healthy tolerance for risk because I am curious about the unknown and embrace uncertainty with curiosity. I value discovery, and this shows up in my propensity to invest for innovation and helping others discover new things. I particularly value education because I believe that it is the reason I have had access to so many opportunities and have been able to tackle challenges in life to survive, thrive, and be happy. I value fairness, honesty, and integrity as well, and therefore I look for these values in the entrepreneurs and opportunities I invest in. Lastly, I am motivated to invest to demonstrate my role as a leader and influence positive change.
How Values Guide the Types of Companies You Should Invest In
In Chapter 1, I introduced the concept of access to essential resources. In deciding what to invest in, ask yourself what types of resources and access you value. You can do similar validity and completeness tests by comparing the types of resources and access against your list of core values and vice versa.
When you are evaluating a business as an investment opportunity, the validity test asks whether the essential resources provided by that business align with your core values. The completeness test poses the question of whether your core values are present or evident in the essential resources provided by the business under evaluation.
Aligning Your Values with Essential Resources
Let’s consider some examples of how values align with essential resources and how you can use values-alignment to guide your investment decisions. If your core values include survival and security, it might be important to you that you and all people have access to the things needed to survive. If this is the case, then you may be drawn toward essential resources for sustenance like food, clean water, shelter, clothing, and energy, which means you’re more likely to want to invest in businesses that enable access to these things.
If you value creativity, essential resource
s for expression may fit with you. This could draw you toward investing in businesses that value art, music, dance, or design. One of the areas of focus in my investment work is the creative economy, where creativity and expression are integral to a company’s products and services, and where the business model is wrapped around the core values of creativity and expression. These include ventures such as independent film and multimedia, written content, and businesses in the fashion industry. In my case, I particularly look for businesses that encourage positive body image, individuality, and imagination, because these are things that I also value.
Your values may also align you with essential resources for connection. If this is the case, you may decide to invest in businesses that value cooperation, collaboration, and friendship. One of the businesses I work with is called myBestHelper. It helps families connect with and find caregivers (babysitters and nannies). It is more than just a transaction-based business; the founder of the company recognizes that finding a trusted caregiver is like welcoming a new member of the family into the fold, and that resonates with me and my values. Connection (between families and caregivers) is the essential resource provided by myBestHelper and is a core value for the founder, the company, and its investors.
People who value change, adventure, control, or discipline may invest in different businesses that provide access to essential resources for managing change. Other similar values include predictability, pragmatism, structure, stability, wealth, and accumulation. If these are important to you, look for investment opportunities in businesses where they show up not only in the value proposition, products, and services they offer, but also in how they do business.
Information, education, and decisiveness are key values that show up in businesses that value essential resources for making decisions. If these are some of your core values, investing in businesses that reflect them would make sense for you.
You might value fairness, equality, and equity like I do. These might be expressed as a business’s fair employment or supplier practices, or in how the business treats its stakeholders. Alternatively, this might show up in a business’s attitude toward money, or it might appear in a barter-based business model. One of the more recent themes in business and investing is the rise of businesses in the sharing economy, like Airbnb, TaskRabbit, and myBestHelper.
Values of justice and inclusion may lead you toward businesses that provide basic access to essential resources. Investments in microfinance institutions (locally or in developing countries) and affordable housing are examples of businesses that reflect the values of basic access.
Many businesses focus on business models that increase efficiency or expediency. Investors that value efficient access to essential resources are often attracted to these kinds of investment opportunities.
Another theme amongst investment opportunities focuses on offering people choice and alternatives (such as organic food and drinks or fair trade and more ethically produced goods and services). If you value choice, abundance, fairness, and health, then investments in businesses that provide access to a choice of essential resources may align well with your values.
If you value convenience or ease, businesses that provide convenient access to essential resources may be right up your alley. These include businesses that are able to reduce drudgery, automate repetitive tasks, or scale their operations such that you can access them conveniently (online, from your mobile smartphone, on every street corner, or where you do your business or shopping).
If justice, fairness, inclusion, and work are important to you, business that provide essential resources for exchange—for instance, businesses that have fair, inclusive, and ethical hiring policies and supply chain practices—may be the types of organizations you want to invest in.
Values Exercise
Figuring out what your values are takes self-reflection and self-awareness. It is not about what your values should be or what other people believe. It is about what is important to you.
If you already know what your values are, jot them down and keep them on hand. You will refer to them as we delve further into what investing with our values looks and feels like. If you are not sure what you value the most, then take some time to contemplate this.
Identifying Your Values
Go through a list of values and categorize them into three groups, in the context of what is important to you in investing and investment decisions. Rank them as very important, important, or not important.
A list of one hundred values is shown below. Please add you own as well. A longer list is available at www.listofvalues.com . It is worth it to be comprehensive and go through a long list to see what resonates with you. There are some words on the longer list that describe the same thing, but one word might mean more to you than another. Identify as many values as are important to you.
Abundance
Achievement
Advancement
Adventure
Belonging
Celebrity
Change
Collaboration
Communication
Competition
Conformity
Consistency
Control
Cooperation
Courage
Creativity
Curiosity
Decisiveness
Delight
Design
Discipline
Discovery
Diversity
Dominance
Education
Endurance
Entertainment
Equality
Equity
Experimentation
Faithfulness
Fairness
Fame
Familiarity
Family
Flexibility
Freedom
Friendship
Fun
Generosity
Growth
Harmony
Health
Helpfulness
Honesty
Hope
Imagination
Improvement
Individualism
Innovation
Integrity
Inclusion
Insight
Inspiration
Justice
Leadership
Learning
Loyalty
Money
Nonconformity
Openness
Order
Passion
Patience
Peace
Persistence
Play
Pleasure
Perfection
Power
Practicality
Pragmatism
Predictability
Purpose
Recognition
Reliability
Resilience
Responsibility
Safety
Scarcity
Security
Self-respect
Sharing
Speed
Spirituality
Stability
Status
Structure
Surprise
Wealth
Wisdom
Status
Thoughtfulness
Tolerance
Tradition
Trendy
Trust
Utility
Wealth
Winning
After you have ranked all these values for yourself, select the eight values that matter most to you. If you have trouble prioritizing, use a grid available at www.beverlyryle.com/prioritizing-grid to help .
Tell Your Story to Identify Your Values
Another way of recognizing which values are most important to you is to write stories about situations or events from your past that are meaningful and identify the values that are present in the stories.
The importance of family, frugality, and hard work were instilled within me by my parents from early in my life. Hidden within the auspices of family c
ohesiveness were the values of love, interdependence, and connectedness. I learned that constant learning and curiosity was how I would pave my path of personal growth and development. Through my own mistakes, failures, and accomplishments, I learned that love, trust, and honesty, with myself and with others, were things that I valued. As I got older, I started to reflect upon what I had learned, what I was curious about, and how my interpersonal relationships had developed. I reflected upon aspects of my life where love, trust, and honesty were prevalent.
I had all my basic needs met as a child. There was a roof over my head and food on my plate. I had supportive parents and teachers who encouraged me to excel in school. I had access to education and health care. Our communities were safe. We had access to transportation, both public transit and cars. The fact that I had access to all these resources meant that I was able to concentrate on learning, spending time with my family, and having fun.
I’ve come to realize that we all generally abide by similar values, even though we express them differently and place varying importance on them. We are all generally pursuing the same goals as well, just on different paths, and have different methods by which we use information to make decisions along the way.
STORY EXERCISE
Think of five to seven times in your life when you were motivated to effect change or speak out about something. Write about moments in your life when you have been most moved to take action —out of passion or love or anger or frustration—or when you wished you could take action. Or write about a burning issue that is currently on your mind. Reflect on these stories and examine the values that were present in the choices you made. Look for the attitudes and behaviors that you exhibited in these situations. As you do, you may see patterns or themes emerge. It’s also possible that each story will highlight a different value.
Write two or three lines describing each situation you come up with. Consider these things as you write:
What was the decision you had to make, or the change you wished to effect?
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