Financial advisory firms focused on sustainable investing are keeping a long position on investments and betting the current market turmoil will be short lived, according to panelists at a webcast sponsored by Cornerstone Capital Group today.

“We are not modifying our strategy although we are holding a little more in cash right now to scoop up opportunities that are created by this market,” said Garvin Jabusch, chief investment officer for Green Alpha Investments. “We have a long-term buy and hold strategy that we are sticking with.”

Investments should focus on those companies that remove risk from the situation and should remove themselves from companies that make the circumstances worse, he said. This applies to risk such as COVID-19, as well as to longer-term risks like climate change, Jabusch said.

Investments in companies that foster disruptive innovation, such as DNA sequencing or robotics, also are attractive, added Cathie Wood, founder and CEO of Ark Investments. “We are at a moment of transformation of the economy and companies that make the life easier for consumers will gain traction in the long run. Companies we are investing in are ones that provide solutions to problems, such as online learning, health care and tele-medicine.

“Our investment horizon is five years out,” she added. “The world is changing radically and will demand huge investments. Estimates are that there will be $12 billion more in U.S. GDP by 2035,” which will be represented by new jobs through changes in work. “Our job is to find out where those jobs are going to be” and invest in those industries."

Investors should be looking to the future and “be prepared in advance for when we get to the other side of this” crisis, added Erika Karp, founder and CEO of Cornerstone Capital Group. “We have to think in innovative ways about investing.”

The market downturn is being caused, in part, by uncertainty in the future, said Michael Geraghty, market strategist at Cornerstone Capital Group. “It is likely that the markets will not stabilize until the virus is under control or a vaccine is developed, but this is not 2008. Normal activity will resume” when one of those two things happen.

Geraghty said China has given the U.S. a roadmap for the current crisis. “We should focus on rapid testing, immediate isolation of those testing positive and a 14-day quarantine.”

While the nation is getting a handle on the virus, “investors should be prepared and not panic,” added Craig Metrick, chief investment officer of Cornerstone Capital Group. Portfolio managers “should not follow the herd. Remember your fundamentals.”

 

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