Nobody can predict the future. But it’s exciting to bring together leaders from across the investment industry to share fascinating ideas about what they think may be to come. And that is exactly what we did during our Ally Invest Digital Conference on October 22.
From a spirited trading vs. investing debate, to robust conversations around current and upcoming investment trends, and even a cameo appearance by one of Ally Invest’s furry friends, the Future of Investing Digital Conference was equal parts entertaining, educational, and thought-provoking.
Missed out on the live sessions? No worries, you can stream the conference on demand, on our YouTube channel. But first, get a taste of what the conference was all about with a breakdown of my top three takeaways from the day.
1. Always pay your future self first
Throughout the past several months, most people have been forced to rethink their budgets, savings, and investments. With uncertainty both in the stock market and the job market, many are thinking about their money in a more cautious and thoughtful way. Now more than ever, it’s critical to think about your future self and your future finances so you can be prepared to face whatever may come next.
In our first panel of the day, Callie Cox, former senior investment strategist for Ally Invest, stressed the importance of paying yourself first. That means setting up automatic transfers to your savings, emergency fund, 401(k), personal investments, or a combination of these each time you receive a paycheck. Even if you only start with a few dollars each month, the more you can prioritize putting money into savings and the stock market now, the more growth and financial security you can achieve in the future and for your retirement. Our Senior Options Analyst, Brian Overby brought the Gen X perspective to the conversation and helped us understand what volatility means for the market and your portfolio.
View the Generational Money Moves in the Time of Coronavirus session, here.
2. ESG investing does not mean you have to sacrifice performance
Although it’s an increasingly popular investment strategy, ESG— or environmental, social, corporate governance — investing often gets a bad rap. There‘s a misconception that investing based on these values means you will forfeit returns. However, what’s clear after speaking with Liz Simmie, CIO and co-founder of Honeytree Investment Management, is that this is not necessarily the case.
ESG investing may conflict with certain traditional beliefs held by some professional investors, such as the importance of investors focusing strictly on a company’s financial fundamentals.
But ESG investors understand that many of the qualities reflected in ESG-focused companies, such as diverse teams and leadership and sustainable practices, are forward-thinking approaches. An emphasis on these values benefit organizations and make them stronger and more capable of withstanding challenges in the long run. That, in turn, is a positive sign for long-term growth for investors.
View the Future of ESG Investing discussion, here.
3. There’s no right or wrong when it comes to active vs. passive investing
In one of the most robust discussions of the day, Ally Invest’s Frank Lietke and VectorVest’s Steve Chappell made strong cases for passive investing and active trading, respectively.
As a passive investor, you can take a more hands-off approach, using automation to consistently contribute to your portfolio, and potentially reap the benefits of the market’s historically upward trending growth. However, this approach doesn’t mean you’re fully disengaged. Sticking to a plan and staying disciplined even during volatility is an active and important choice for passive investors.
On the other hand, investors with an active strategy must consistently follow the market ups and downs, find patterns, and identify trends to discover opportunities for timing trades. You may choose active investing as a way to have more control over your risk management, but just like passive investing, having a plan and exit strategy in place is always critical.
Through their impassioned debate, Frank and Steve each made points that highlighted the different merits of both strategies. While I’ll leave it up to you to decide which side won, two things are clear for both passive and active investors: being engaged in your portfolio matters — and getting started, no matter your strategy, is key.
View the Trading vs. Investing Debate, here.
This is just a snippet of the meaningful insights you can glean from the Ally Invest Future of Investing Digital Conference. For even more on subjects like the future of finance, technology, AI, and, yes, robots, as well as discussions around the barriers that hold investors back and how we can break them down, stream the conference on demand.
Lindsey Bell is Ally’s Chief Investment Strategist, responsible for shaping the company’s point of view on investing and the global markets. She is also President of Ally Invest Advisors, responsible for its robo advisory offerings. Lindsey has a broad background in finance, with experience on the buy-side and sell-side, in research and in investment banking and has held roles at JPMorgan, Deutsche Bank, Jefferies, and CFRA Research.
Lindsey holds a passion for teaching individuals how to become successful long-term investors. She is a contributor at CNBC, and frequently shares her insights with various publications including the Wall Street Journal, Barron’s, MarketWatch, BusinessInsider, etc. She also serves on the board of Better Investing, a non-profit organization focused on investment education.
The opinions expressed here are not meant to be used as investing advice. For more information, visit our website.