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Understanding the Expressive Benefit of Investing

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Meir Statman, the researcher and professor of finance at Santa Clara University, wrote that investments offer “three kinds of benefits: utilitarian, expressive, and emotional.”

Generating actual investment returns is a utilitarian benefit, and the emotional reward comes when investors feel good or bad about a company and positively (or negatively) about owning part of said company. With sustainable investing, the emotion one feels towards a company and its practices is clearly important to some investors.  

Then there’s the very different role that investments play: they express our values, our tastes and our status to others. One thing that appears to be unusual about sustainable investing is that the expressive benefit is openly talked about – and derided in some quarters. 

Even if advisors do not share that particular expressive desire, it behooves the advisor community to remember that investments always have an expressive component, and expressive benefits drive some investors more than others.


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