Thoughts on Low Oil Prices

We’ve seen a precipitous decline in the price of oil over the past several months. Market analysts and economists have been chiming in with their opinions on the effects. Here is ours based on our socially & environmentally responsible strategies…

First and foremost we see low oil prices as a tremendous threat to the environmentally unfriendly practice of fracking and even worse, tar sands. These forms of extraction are already on economic thin ice and low prices may push these companies into financial trouble. Several use low quality (and high interest) debt to fund their operations. An extended period of low oil prices may put them under.

In addition, it makes the Keystone XL pipeline basically moot. If it is economically unfeasible to produce tar sands oil, then the pipeline isn’t needed.

From our environmental perspective, this is all very good. The disaster we see in Alberta tar sands needs to be limited to what they have done so far – no more! Fracking may continue because of the natural gas uses, but again, an extended period of low oil prices will test the market. It may also give scientists more time to gain the evidence needed to limit it’s use.

Because global markets still, for the most part, run on fossil fuels, low oil prices are good for the economy. This may continue to be a driver for growth as transportation and raw material costs should go down. This may drive stock markets to even higher highs. Beware if prices rise, however, causing unexpected higher expenses for businesses.

A negative from our environmentally responsible perspective is that low oil prices may inhibit the growth of alternative fuel vehicles and energy production. Low gas prices makes the premium paid for electric and hybrid vehicles less palatable. Nevertheless, there is continued momentum in these markets, and we don’t see much of a slow-down.

We are especially happy to see that the price of alternative energy generation is basically at par with dirty fossil fuel generation as reported in the New York Times, http://www.nytimes.com/2014/11/24/business/energy-environment/solar-and-wind-energy-start-to-win-on-price-vs-conventional-fuels.html

Overall, we are happy to see low oil prices, despite the potential negative effects on clean energy development. We view the low prices as the effect of global inter-industry competition (OPEC vs North America) resulting in the potential for an industry implosion. Only time will tell.

Neill Yelverton Becomes Partner

We are pleased to announce that Neill Yelverton, a financial advisor at the firm, has become an equity partner.

“Neill has been with us for over a year and has proven to be a tremendous asset. His dedication to social and environmental issues, his drive and work ethic, and his desire to provide first-class client service fits very well with the mission of Krull & Company. I am excited to have him as a business partner,” Krull & Company President and Founder Peter Krull said. 

Yelverton hold a B.S. in Wildlife Science from North Carolina State University and a M.B.A from Western Carolina University where he completed independent study in Corporate Social Responsibility and Sustainability in Business. He is currently working on completing his Certified Financial Planner (CFP®) designation.

“What a great opportunity to be a partner in this amazing firm,” Neill Said. “Every day I get to help clients be changemakers with their investments – it’s something that I’m proud of and truly believe in.” 

Neill is currently accepting select new individuals, trusts, non-profits and business retirement plans as clients.

Living Well

I had a great opportunity this week to be interviewed on the Living Well radio show here in Asheville. The host, Dr. Bob Hanna, a local psychologist is genuinely interested in “living well,” and that includes investing.

In the many years that I’ve been helping people invest with their values, the biggest challenge/opportunity has always been simply education. Getting the word out that you can invest with your values, avoid polluters and other offenders, make a difference with your money, and get a competitive return.

What I have found is that many folks silo their money and investments. They may recycle, buy organic food, drive a hybrid, etc. But when it comes to investing, the old see no evil, hear no evil speak no evil philosophy comes out.

So, when I have the chance to talk about responsible investing with someone like Bob, I try to stress that responsible investing really is about “living well” as the name of the show suggests. It’s not something that should be set aside, but something that should be integrated into your overall life philosophy.

Click here to listen to the interview

Pete Krull

Always, Get a Second Opinion!

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Advisor vs. Broker

In this video blog, Neill Yelverton explains the difference between Advisors and Brokers.  Many people do not know there is a difference.  That difference matters.  At Krull and Company we empower you with knowledge.

What if it’s all a hoax?

This is one of my favorite cartoons from Joel Pett. He offers a great question, what if it’s all a hoax?

Personally, I do not believe it’s a hoax because the data supports scientists’ claims of man-made climate change. So, I guess it’s not that I “believe,” it’s that the hypothesis has been validated by the vast majority of scientists (around 97%.)

Admiral David Titley expresses the same sentiment in an article I read this morning, “People ask me if I ‘got religion,’” Titley said. “No, I don’t ‘believe in climate change – I’m convinced by the evidence.” Read the article

But to go back to the original cartoon, what if it’s a hoax? Some claim that proactively addressing the issue will ruin the economy, but the World Bank has shown those claims to be untrue and even said that tackling climate change would grow the global economy. Read the article

Furthermore, studies continue to show significant clean energy jobs growth. Our friends at E2 are keeping on top of this. More information

So again, what if it’s a hoax and all of these scientists are wrong? Well, unless you’re the CEO of a fossil-fuel company whose very existence (not to mention multi-million dollar compensation package) is in jeopardy, there’s really not much to complain about:

       Energy independence

       Preserve rainforests

       Sustainability

       Green jobs

       Livable cities

       Renewables

       Clean water & air

       Healthy children

       Etc, etc

So let’s focus on the positives, nurture the opportunities and make the world a better place – together.

Peter Krull is President and Founder of Krull & Company, an Asheville, NC-based socially and environmentally responsible investment management firm. For more information, visit www.investwithyourvalues.com

Why investing with your values matters

It doesn’t matter if I invest with my values – all that matters is making a profit, right?

Well, it does matter. By investing in companies that do not align with your values, you are implicitly endorsing their business practices. If you do own them and are not actively voting your proxy to encourage better behavior, you are, for lack of a better phrase, asleep at the wheel.

Did you know that the four largest mutual fund companies did not vote for transparency in political contributions in 2013? If you have investments with these companies, and you consider yourself a responsible investor, you are not being represented. Here’s the story from the Harvard Law School Forum.

This doesn’t mean that you need to be actively managing your portfolio or that you have to give up return; but it does mean that you need to be informed. Seek out an advisor who understands the concept of responsible investing. Divest from fossil fuels. Use your proxy to challenge corporate pay structures and lobbying efforts. You can make a difference, invest with your values and still get competitive returns.

Peter Krull is President and Founder of Krull & Company, a leading socially and environmentally responsible investment management firm based in Asheville, NC.

When a Trust or Inheritance Comes Your Way…

By Peter Krull

We have had several clients over the past few years who have inherited investments or trusts from parents, grandparents, etc. While this event is typically a bittersweet occurrence, there is often a second level we have to address.

Many of the younger clients inheriting the wealth do not have the same values as their parents or grandparents. And so when they receive inherited assets they often find investments that are not aligned with their values, including fossil-fuel companies, defense contractors and big pharmaceuticals.

What we hear from many new clients is that the financial advisor who had been managing the account previously was not interested in transitioning the account to one with responsible investments. Occasionally this is a difficult situation to resolve – many times the advisor has been a family friend for many years. Sometimes, simple inertia takes over and the account stays where it is for years.

But eventually folks find their way to us. What we do is empower clients to be changemakers and invest with their values. We work with clients to identify those investments that do not represent their interests and use a tax-managed approach to divest and reinvest in more appropriate opportunities.

The truth is that you do not have to settle for investments that keep you up at night. You can change and you can make a difference. Better yet, you can do so and still have competitive returns. All you have to do is ask.

Peter Krull is President & Founder of Krull & Company, a leading socially and environmentally responsible investment management firm based in Asheville, NC.

Asking the Right Question

Does it seem to that you’re always looking for “the answer?” We have a tendency to focus on finding the answer without spending enough time on making sure we’re asking the right question.

Ten years ago I was lucky enough to ask the right questions: Is there a way that I can help my clients invest differently? Can I help them invest with their social and environmental values?

Of course, conventional investment minds said no – the answer is that you invest traditionally and donate your excess profits to the cause of your choice. That answer wasn’t good enough, so I kept asking questions.

Is it possible to generate competitive returns with responsible investments? Can we empower clients to be changemakers through shareholder advocacy?

With a little research and some friendly guidance, the answers to those questions presented themselves quite clearly as YES. I’m proud of the fact that we’ve continued to ask relevant and insightful questions for the past ten years.

We ask clients about their values, their philanthropic interests, their families, hobbies and even their pets. We ask how we can provide even better service.

A couple of years ago, a client asked if we could create a basket of sustainable stocks for him to invest in because it wasn’t available. That’s how the Green Sage Sustainability Portfolio began.

What questions can you ask, both of yourself and of us? Is there a product or service that you are interested in? Are you happy with your level of service? Your performance?

I encourage you to be “askers,” both in your personal life and professional life. You never know what you might get.

For more information on asking, I’d recommend reading A More Beautiful Question by Warren Burger. Here’s the link on Amazon.

Peter Krull is President & Founder of Krull & Company, a leading socially and environmentally responsible investment management firm based in Asheville, NC.