Midyear 2017 RESP Update

At Mom and Pop Investments we’re focused on the future. Our primary goal is to ensure that what little capital we have is allocated in such way as to make a positive, long-term impact on the world. In the long term, we believe that helping fund Devon’s education is a fantastic investment both in him and in society.

In the short term, our goal is to ensure the capital is deployed ethically in ways that make society stronger and the world a better place.

In terms of our investment strategy, we started the year hesitating to add to our equity positions. We felt the markets were largely overvalued, but we felt largely neutral on the overall direction of the market.

However, starting in August we aggressively liquidated our equity holdings in the US from all of our portfolios. Half-way through 2017 it seems clear that politically the US is descending into a corrupt kleptocracy. Even if the market does advance further (and it will), it does not feel right for our capital to remain invested in a system that’s actively attacking the environment and human rights. As a capitalist society, the US requires capital to finance its operations. Removing that capital from the system so it can be be allocated towards better uses strikes us as a good idea at this time.

Thus, we shifted Devon’s asset allocation to geographic areas outside of the US. The US allocation is being replaced by bonds (which are more attractively priced) and climate-focused investments like water infrastructure:

This shift in Devon’s core allocation is the largest change we’ve done to his core portfolio since we started. We feel it’s the right decision regardless of where the market is headed in the future — it’s a decision we feel we could explain to a precocious three year old without too much equivocating.

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