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  • Writer's pictureKatie & Brian Boland

Seven Deadly Sins of Modern Investing

What if we told you that the way you're investing is likely making our economy and society sicker—fueling inequality, environmental destruction, and social unrest? What if we told you that by following the conventional wisdom on what it means to be a "smart investor," you may be undermining your own long-term security—not to mention the stability of the society you plan to retire in?


These are the uncomfortable truths we had to confront in our own investing journey—and the realizations that set us on a search for a saner, more sustainable approach.


Through that search, we identified what we call the "Seven Deadly Sins of Modern Investing": the toxic dogmas and default practices that are sending capitalism careening off the rails—and taking us along for the ride:


  1. Benchmarking to the past

  2. Tunnel vision on financial returns

  3. Short-termism at all costs

  4. One-dimensional analysis

  5. Herd mentality

  6. Over-diversification

  7. Outsourcing to the "experts"


These sins are so embedded in the mainstream investment culture that we barely notice them. But once you see them, you can't unsee how they're leading us astray—and how each represents an enormous opportunity for transformation.


We believe that by systematically rejecting these seven sins and adopting a more holistic approach—one that looks beyond narrow financial metrics to prioritize long-term value creation and stakeholder well-being—we can redefine what it means to invest "smartly."


In the process, we believe we can not only make our portfolios more resilient but also contribute to an urgently needed paradigm shift: away from an extractive, short-sighted capitalism that's devouring our future, and towards a regenerative economics aligned with social justice and ecological realities.


The stakes could not be higher. The current model is hurtling us towards civilizational collapse, as inequality spirals out of control and climate catastrophe looms.


Yet we are convinced that those of us with capital to deploy—however modest—have immense power to change course. If we can muster the courage to break from a broken status quo, we can be the catalysts for a new kind of capitalism: one built not on exploitation but genuine shared prosperity; one that works for people and planet, not against them.


This post is an invitation to join that movement—to be part of the shift toward a life-affirming investment ethos fit for the 21st century. By unpacking the seven deadly sins and pointing to a new path, our aim is to equip you with a roadmap for starting to invest in the world we all want to inhabit—and for inspiring others to do the same.

Will it be a smooth journey? Probably not. Will it take grit and resolve to chart a new course? Absolutely.


But as the old saying goes, the best time to plant a tree was 20 years ago—and the second best time is today.


So buckle up, grab a shovel, and let's dig into the fertile soil of what investing can and should be—for your own security, for the integrity of our markets, and for the future of the planet we all share.


The Failure of Modern Capitalism


The dominant economic paradigm of our time—neoliberal capitalism—is facing a reckoning. Despite the promise that unfettered free markets would lift all boats, the rising tide has left far too many behind and feeling like they are underwater and drowning. 


Consider these stark facts:


Inequality has reached historic levels. The richest 1% now own more than twice as much wealth as 6.9 billion people. [Oxfam]


Real wages for the typical worker have barely budged in 40 years, while CEO pay has increased 940% since 1978. [Economic Policy Institute]


The climate crisis, fueled by an economic system that treats natural resources as inexhaustible, threatens the survival of human civilization as we know it. [UN IPCC]


These crises are not accidental glitches—they are the logical outcomes of a system hard-wired to prioritize profits over people and planet. The relentless pursuit of growth and profits under neoliberal capitalism has created an unsustainable situation of rising inequality, societal destabilization, economic insecurity for workers, and catastrophic environmental degradation. This system is in dire need of reform to create a more just, equitable and sustainable world.


Leading thinkers like economist Joseph Stiglitz have meticulously documented how the rules of the game—from tax policies to corporate governance structures—systematically benefit the wealthy and well-connected at the expense of everyone else. As Stiglitz writes in his seminal work, The Price of Inequality


"Much of America's inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others." [The Price of Inequality, p. 32]


Stiglitz's incisive analysis reveals a broken system where the interests of capital are relentlessly prioritized over the needs of ordinary people—a far cry from the rising tide promised by free market fundamentalists. 


In 2008, while Wall Street giants were bailed out after triggering a global crash through reckless speculation, millions of everyday families lost their homes, their savings, and their livelihoods. 


And now, as we careen towards climate catastrophe, the same logic of short-term profit maximization continues to block urgently needed action. Fossil fuel corporations pour billions into blocking clean energy [The Guardian], while Wall Street continues to funnel trillions into the industries driving us towards disaster [World Resources Institute]. 


Status quo capitalism, it's increasingly clear, is profoundly broken. To quote one of the world's most successful capitalists, Salesforce CEO Marc Benioff:


"Capitalism, as we know it, is dead... We're going to see a new kind of capitalism—and it won't be the Milton Friedman capitalism, that is just about making money. The new capitalism is that businesses are here to serve their shareholders, but also their stakeholders — employees, customers, public schools, homeless and the planet." [New York Times]


The Investor's Complicity


But here's the uncomfortable truth—if you're a typical investor, you're likely perpetuating this broken system without even realizing it.


Every time we invest in a company purely because of a "hot stock tip"—without looking at their environmental record or how they treat workers—we endorse a model that prioritizes profits over principles. 


Every time we choose a fund solely because it's outperformed a benchmark—without asking if its holdings align with our values—we prioritize personal gain over societal well-being.


Every time we push a company to cut costs and boost short-term earnings—without considering the long-term costs to people and planet—we reinforce the myopic mindset at the root of so many crises.


Make no mistake: the choices we make in how we invest matter. The flow of our capital shapes which companies thrive, which business models spread, which problems get solved and which are left to fester.


Of course, the lure of the current system is strong. It's hard to break from the herd, to question the dogmas we've long been taught—growth at all costs, profit over principles, short-term returns over long-term resilience.


But as the crises fueled by extractive capitalism accelerate in scale and intensity—climate chaos, gaping inequality, social unrest—it's never been more urgent to find another way.


Reimagining the Purpose of Investment


So what does it look like to invest in a way that helps heal capitalism rather than perpetuate its ailments? It starts with rejecting what I call the Seven Deadly Sins of Modern Investing:


1. Benchmarking to the past: Aiming to beat markets that themselves fuel long-term instability is a losing game. We need new benchmarks that keep pace with evolving social and environmental realities. Or even build our own systems and confidence to move away from universal benchmarks to define what success looks like for you. 


2. Tunnel vision on financial returns: Fixating on narrow financial metrics blinds us to the holistic impacts our investments have on the wider world. Embracing a broader definition of value creation is key. 


3. Short-termism at all costs: Chasing quick profits leaves us vulnerable to catastrophic long-term risks, from climate breakdown to populist backlash against corporate overreach. Expanding our time horizons is vital. 


4. One-dimensional analysis: Over-relying on quantitative data fails to capture critical intangibles like corporate culture, innovation capacity, and stakeholder trust. Bringing qualitative judgments into investment decisions is crucial. 


5. Herd mentality: Reflexively following the crowd leads us to pile into overvalued assets while missing transformative opportunities hiding in plain sight. Independent thinking has never been more valuable—or more scarce. 


6. Over-diversification: Owning everything, everywhere mutes our ability to invest with real knowledge and conviction. Doing deep diligence on a select group of holdings can unlock outsized value. 


7. Outsourcing to the "experts": Entrusting our capital to advisors checking conventional boxes ensures we'll keep getting conventional results. Taking greater ownership of where our money goes is liberating and enlightening. 


Rewriting these old scripts requires fundamentally rethinking what it means to be a successful long-term investor.


It means:


Embracing new metrics of progress—not just quarterly earnings per share but the living standards of employees, the sustainability and resilience of supply chains, the trust and goodwill of communities.


Expanding our circle of concern—recognizing that our fates are inextricably linked, that the struggles of workers, customers, and our shared environment profoundly shape risks and returns.


Thinking like owners, not speculators—doing the deep work to truly understand what we own, and using our power as shareholders to steer companies toward greater responsibility and long-term value creation.


Fueling tangible solutions—actively seeking out opportunities to invest in and scale up the technologies and business models solving our biggest challenges, from clean energy to affordable housing.


Pushing for new rules—advocating for reforms in corporate governance, tax policy, investor disclosure, and other key arenas to level the playing field and correct glaring failures.


Firing your advisor—If your current financial advisor clings to this outdated model, it may be time for a decisive action: fire them. As an investor, it is essential to remember that financial advisors work for you, not the other way around. You are the expert in your own values and it is your advisor’s job to align your capital with these values. 


Some will argue this approach is too "political," too unconventional, too daunting to undertake. But as the crises fueled by shareholder primacy capitalism accelerate, doing what we've always done will only dig us into a deeper hole.


To quote the visionary futurist Buckminster Fuller: "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."


The world urgently needs a new model of capitalism—one that measures success not just by financial returns but by tangible value creation for all stakeholders. Kate Raworth in her work Doughnut Economics presents such a model that focuses on helping people and the planet to thrive. [Doughnut Economics]


As investors, we have immense power to help bring this future into being—by changing where we put our money, what we demand from our assets, what we advocate for in the public square.


The choice is ours: stick with a broken status quo hurtling us towards disaster, or step up as pioneers of a healthier economic paradigm?


Do we have the courage and conviction to put our capital to work reshaping capitalism into a system that truly works for people and planet?


For the sake of our collective future, we hope we do. Our very survival as a species may depend on it. 


The hour is late and the need immense, but a better way forward is within reach—if we have the will to grasp it. So as we close, let me invite you to join this movement: let's use our power as investors to be the change we wish to see in capitalism, in our economy, and in our world. 


Let's get to work. The clock is ticking, and future generations are counting on us to act—while we still can.

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1 comentário


elisabethannrenstrom
09 de mai.

Brain and Katie - As my husband Bob Perkowitz said, "This may be the best pro-impact piece I’ve seen." You call upon the best thinkers and research as well as inspiring investors to "get to work." thank you! We need to push this article out to the investing world.

Lisa Renstrom (ValuesAdvisor)


Curtir

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