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How to Be a Better Ally to Your Black Colleagues | Harvard Business Review

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“The relationship between Black employees and their employing organizations is, at best, a tenuous one.”

by Stephanie Creary, Ph.D
Assistant Professor of Management
The Wharton School of the University of Pennsylvania

July 08, 2020

Executive Summary

Research suggests that the relationship between Black employees and their employing organizations is, at best, a tenuous one. Black employees — at all levels — feel that they have not been adequately heard, understood, or granted opportunities to the same extent as their white peers.

The author, Dr. Stephanie Creary, has devised a framework to help people from different backgrounds build stronger relationships in the workplace. Known by the acronym LEAP, the framework encourages company leaders — particularly people managers — to become better allies by:

  • Listening and learning from your Black colleagues’ experience;
  • Engaging with your Black colleagues in racially diverse and casual settings;
  • Asking your Black colleagues about their work and goals; and
  • Providing your Black colleagues with opportunities, suggestions, encouragement, and general support.

Public Positioning (Woke-Washing)

Woke-washing is “a modern-day marketing tactic in which corporations superficially align themselves with progressive causes, often while continuing to perpetuate inequality or unethical practices behind the scenes”.

A few U.S. CEOs and corporations have been positioning themselves publicly as being progressive on social issues such as racism, injustice and inequality. They have been taking a public stand against the racism and injustice while also admitting their own shortcomings in matters of equality.

Yet, for many well known corporations and organizations, there has been a large dichotomy between their companies’ (or organizations’) words and their actions.

Read more: https://hbr.org/2020/07/how-to-be-a-better-ally-to-your-black-colleagues

References:

  1. https://www.msn.com/en-us/news/opinion/ceo-statements-on-race-matter-more-than-you-think/ar-BB14ZzVk

About Professor Stephanie J. Creary: Dr. Creary is an identity and diversity scholar and a field researcher. She is also a founding faculty member of the Wharton IDEAS lab (Identity, Diversity, Engagement, Affect, and Social Relationships), an affiliated faculty member of Wharton People Analytics, a Senior Fellow of the Leonard Davis Institute of Health Economics (LDI), and affiliated faculty member of the Penn Center for Africana Studies. She leads the Leading Diversity@Wharton Speaker Series as part of her Leading Diversity in Organizations course at Wharton. She conducts research on the topics of identity, diversity and inclusion, and relationships across differences.  She also advises and speaks to corporate audiences on the following topics:

  • Building stronger relationships in the workplace among people from different backgrounds
  • Improving leader engagement in diversity, equity, and inclusion work
  • Reducing bias in selection processes (hiring, promotion, team)

A Dividend-Growth Investment Strategy

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“Dividend stocks can provide investors with predictable income as well as long-term growth potential.”  Motley Fool

Dividend stocks have faced strong headwinds, including payout cuts and suspensions as efforts to fight the pandemic have hampered corporate cash flows.

Yet, investors who have a moderate risk tolerance should consider pursuing a proven dividend-growth investment strategy for income and return in volatile markets.  In volatile markets, protecting current income becomes more important than ever for investors.  But you also want to satisfy your need for current income and capital growth.

Dividend-paying stocks tend to provide more defensive protection in adverse market environments and they tend to grow over time and protect your real purchasing power. Dividend-paying stocks also tend to have more of a value orientation.

When dividend stocks go up, you make money. When they don’t go up — you still make money (from the dividend). When a dividend stock goes down in price, it’s not all bad news, because the dividend yield (the absolute dividend amount, divided by the stock price) gets richer the more the stock falls in price.

Historically, stocks with rising dividends greatly outpaced the dividend cutters or non-dividend-paying stocks. Further, if you focused on rising-dividend stocks over non-dividend-paying stocks, you would have increased your investment by an average of 4.3% per year over this nearly 48-year study.

pexels-photo-164527

So, a $10,000 investment in non-dividend-paying stocks made at the beginning of this study, growing at an average annual return of 8.57%, would be worth over $500,000 today.

However, the same $10,000 investment in dividend growers over the same period at a 12.87% average annual return would be worth an incredible $3.24 million!

That’s not the only benefit. Returns from dividends have also exhibited a lower standard deviation, or variability, over time. Since the overall volatility of a stock’s total return is typically dominated by its price movements, dividends contribute a component of stability to that total return.

Looking for good dividend-paying stocks

Despite challenging economic times, certain companies have grown their dividends during previous downturns; there may be precedent for their willingness and ability to grow their dividends again.  While much remains uncertain, the highest-quality companies have proven their ability to grow their dividends over time.  They have demonstrated an ability to survive through a range of market environments, even raising dividends during and after previous recessions.

These companies prioritize sustaining dividends in challenging times. They are dividend-paying royalty.  However, it’s advised to avoid stocks with very high yields since they could be prone to dividend cuts or suspensions.  Seek dividend stocks with a fortress balance sheet providing solid cash flow, reasonable dividend payout yield, above average earnings growth and little to no debt.  Avoid companies with heavier debt loads, as measured by net debt (debt minus cash) to earnings-before-interest-taxes-deprecation-and amortization (EBITDA) ratios.

Investors seeking dividend sustainability need look no further than the Dividend Aristocrats: a list of companies within the S&P 500 index that have increased their dividend payouts consecutively for 25 years or more.  The 64 S&P 500 Dividend Aristocrats have raised their dividends in an era that spans the Iraq wars, the Sept. 11 terrorist attacks, the Great Recession, and now the novel coronavirus pandemic.

But while the Dividend Aristocrats list is a great place to start for identifying dividend stalwarts, you are advised to avoid the highest-yielding stocks—some of which can be value traps or worse.  It is okay to look for companies that are paying a decent amount of their earnings back in the form of income, but if the price moves too high and their dividend yield drops, then you’ll sell the stock and capture the gains.

Additionally, under the recently passed 2020 CARES Act, “companies that borrow money from the federal government may not repurchase stock, pay a dividend, or make any other capital distributions until 12 months after the loan is repaid in full,” according to Goldman Sachs.

Investors should always consider their investment objectives, their comfort level and risk tolerance before investing. And, they should keep in the forefront of their mindset that investment plans do not need to change in periods of high volatility since they should be based on five years or longer time horizon.

References:

  1. https://www.fool.com/investing/stock-market/types-of-stocks/dividend-stocks/
  2. https://www.aaiidividendinvesting.com/subscribe/diLP.html?utm_source=facebook&utm_medium=Facebook_Desktop_Feed&utm_campaign=all_leads&utm_content=DI%20Long%20Form%20DCO&adset=di_bundle&fbclid=IwAR1enL0oTxkF5E5phIBVJ1dGk4VYQ_OV6a2RCXNDh-lgeNOFtkxcoXWLJn0

Wealthy Recommend Index Investing

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For the most part, many wealthy Americans and ‘next door millionaires’ favor for their own investment portfolios and recommend for small retail investors to invest in market index funds or ETF. An index fund is a mutual fund or exchange-traded fund (ETF) that mimics the behavior of an underlying index such as the S&P 500.

Investing in index funds is a winning strategy when playing the stock market for two reasons:

  • They’re broadly diversified, eliminating the risk of picking individual stocks, and
  • They’re lower in cost.

If someone does not have the time or inclination to research companies financial balance sheets, management effectiveness and business operations, they should buy index funds. I’ve invested in Vanguard’s ETF (VOO) because of its low fees and its return track the S&P 500 market index. In short, the average American doesn’t have the time, knowledge, and desire to properly invest in individual stocks.

Beating the market versus moving with the market

When you invest in index funds, your goal is to keep pace with the market. That’s very different from the approach taken by stock traders and active mutual fund managers. Stock traders don’t want to keep pace with the market; they want to beat the market.

The trouble is that few people can consistently beat the market over a five or ten year period. According to S&P Indices Versus Active (SPIVA), 80.6% of actively managed large-cap mutual funds underperformed the S&P 500 over the past five years. In other words, beating the market is hard for anyone and especially hard for the part-time investor.

When you invest in an index fund, you’re signing up for the good and the bad. That’s why it’s important to invest for the long term and only invest funds you don’t need for seven years or more. That way, you can ride out the inevitable downturns calmly, without having to liquidate at a low point.

Warren Buffett’s recommendation

Billionaire investor Warren Buffet is a strong proponent of of investing in the market index for most retail investors. At Berkshire Hathaway’s 2016 shareholder meeting, Buffett said that most investors’ best option is to put their money into a low-cost index fund.

Buffett’s reasoning for index fund investing, and for S&P 500 index funds in particular, is that they will match the market’s performance over time — no more, no less. This may sound boring, but the reality is that the market’s performance has been quite good over time, producing annualized returns of 9%-10% on average. And with rock-bottom management expenses, investors will be the beneficiary of virtually all of the gains.

Essentially, investing in a broad basket of stocks, such as the S&P 500 index, is a bet on American businesses, which Buffett feels is sure to do well over time. “American business — and consequently a basket of stocks — is virtually certain to be worth far more in the years ahead,” Buffett said in his 2016 letter to shareholders.

I’ve been a disciple and follower of Warren Buffett since 2007. I invested in his company back in 2008 when I found myself wondering how I could get the sweet stock warrant deals like Warren received from Bank of America. Then one day it dawned on me that I could get the benefit of his sweet stock deals by investing his Berkshire-Hathaway stock. 

In short, we concur with Warren in the most part. But, I also believe that every American should save and be invested in the U.S. equity stock market if they invest and want to accumulate wealth and achieve financial security. 

References:

  1. The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities. There is over USD 9.9 trillion indexed or benchmarked to the index, with indexed assets comprising approximately USD 3.4 trillion of this total. The index includes 500 leading companies and covers approximately 80% of available market capitalization.
  2. https://www.marketwatch.com/story/warren-buffetts-latest-advice-could-help-you-retire-much-richer-2020-03-16
  3. https://www.fool.com/investing/2017/06/25/warren-buffett-on-index-funds.aspx
  4. https://www.businessinsider.com/millionaires-investment-strategy-low-cost-stock-index-funds-building-wealth-2018-12
  5. https://apple.news/ANEWc5MJtRM2erbrPfyjxvA

Young Adults Driving New Cases of COVID-19| USAToday

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People under 40 now make up the majority of COVID-19 cases, according to a USA TODAY analysis of data from 17 states.  They found that the average age of a new person reported to have coronavirus has fallen significantly since March.

Although younger adults are less likely to develop severe infections of COVID-19, some do develop serious and even life-threatening complications.

Read more:  https://www.usatoday.com/in-depth/news/2020/07/07/younger-people-driving-new-cases-covid-19-putting-elderly-risk-cases-deaths/3285566001/?fbclid=IwAR17Db8MyyCviXun8o557bC1QKt2dpa53ewkUYX8TiFDMjL_MU7H6FqU5O8

Heart Disease is a Food and Nutrition Related Pandemic Disease in America

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Heart disease is caused by the foods we eat.

Heart disease is the leading cause of death of men and women in America. It kills more than 647K Americans annually according to the Centers for Disease Control and Prevention (CDC). It fills the nation’s critical care hospitals beds and exponentially increases healthcare costs. Heart disease has become a perennial pandemic in America.

Heart disease refers to several types of heart conditions. The most common type is coronary artery disease, which can cause heart attack.

Heart disease occurs most often when a substance called plaque builds up in your arteries. When this happens, your arteries can narrow over time, reducing blood flow to the heart.

According to Dr. Caldwell B. Esselstyn Jr., who directs the cardiovascular prevention and reversal program at The Cleveland Clinic Wellness Institute, heart disease and the build up of plaque in your arteries can be “prevented, arrested, and selectively reversed” by consuming a plant based diet and eliminating from the standard American diet the typical toxic and unsafe foods which are responsible for the disease.

“When we have a problem, our natural instinct is to add a new habit or purchase a fix. But sometimes, you can improve your life by taking things away. For example, the foods you avoid are more important than the foods you eat.” David Perell

Instead of the government’s universally accepted ‘food pyramid’, Dr. Esselstyn promotes just 3 food categories: safe, condiments, and unsafe.

  • Safe: grains, legumes, lentils, vegetables, and fruits
  • Condiments: nuts and seeds
  • Unsafe: oils, sugars, dairy and processed foods, meat, poultry, and fish

 

References:

  1. https://www.cdc.gov/heartdisease/docs/ConsumerEd_HeartDisease.pdf
  2. http://www.dresselstyn.com/site/study03/

COVID-19 Tracker | FIRST TRUST

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First Trust Economic’s weekly COVID-19 Tracker which contains charts and data that they think are important to gain some perspective on the coronavirus pandemic in the U.S. 

https://www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=a9e49836-abc7-41cf-8949-4497ddee0018

Setting Financial Goals | Mass Mutual

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Every successful investing journey starts with a set of clear goals.

When it comes to planning for your financial future, it’s essential to have clear, concise and measurable financial goals — and a good comprehensive financial plan and strategies for reaching them.  Sometimes the hardest part is just knowing where to start and what is the destination.

Mass Mutual advises clients to set four basic financial goals; two short term goals (Income & Savings) and two long term goals (Retirement & Debt) — using their simple 5-10-15-20 guidelines:

  • 5: Increase your annual income from all sources by at least 5% each year.
  • 10: Save at least 10% (preferably 15%) of your net annual income each year.
  • 15: Target a retirement “nest egg” of about 15 times your annual income.
  • 20: Plan to have your debt (excluding your mortgage) paid down within 20 years at most.

Goal: 5% Income Increase

While many Americans see their salaries increase about 2% to 3% each year, setting the bar higher will help you maximize your biggest asset: your income. Setting a goal to increase in your total income 5% every year, whether it’s through your salary or other sources of income, can make a big difference over the long run. your personal financial situation.

10% Yearly Savings

A good rule of thumb is to save 10% to 20% of your net income each year. This could help you to take advantage of opportunities that may arise, like finding your dream home or investing in a new business venture. It also can provide a cushion in case of emergencies. You can increase the amount you save by setting aside a little more of your salary each month and cutting back on unnecessary expenses.

15x Salary Retirement Nest Egg

As you get older, you’ll have a better sense of your true retirement needs. For now, we suggest trying to accumulate a total of 15 times your current gross annual income for
retirement. The goal is to end up with a nest egg that could generate about 75% of your current annual income each year in retirement.

20-Year Debt Pay-Down

Many of us are burdened with debt, including student, credit card, auto and other loans. By understanding how long it will take to pay down your debt and working towards a debt elimination plan with set timelines, you’ll be better able to manage not only your debt, but your savings and retirement, too.

https://www.massmutual.com/financial-wellness/calculators/establishing-financial-goals

Color blind or color brave? | TED2014

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Mellody Hobson is President of Ariel Investments and an advocate for financial literacy and investor education.

The subject of race can be very touchy. As finance executive Mellody Hobson says, it’s a “conversational third rail.” But, she says, that’s exactly why we need to start talking about it. In this engaging, persuasive talk, Hobson makes the case that speaking openly about race — and particularly about diversity in hiring — makes for better businesses and a better society.