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October 13, 2022 at 02:51 PM
Identity politics and investing don’t mix well, investor Barry Ritholtz warned this week, urging investors not to base their portfolio moves on emotional ideological branding.
“Good investing is about future discounted cash flows, behavioral management and having a long-term perspective. It’s not about partisan politics, religious beliefs or any other emotionally driven system separated from the intelligent allocation of capital,” the Ritholtz Wealth Management founder and chief investment officer wrote Tuesday on his blog, The Big Picture.
“You might not know that, given all of the new ETFs that are aimed at your emotional hot buttons,” he wrote. “Marketing to fear and greed? That’s so very 1990s. Tribalism, identity politics and ideology are how today’s savvy marketers reach into investors’ wallets.”
Playing off the YALL ticker symbol for the new God Bless America ETF that launched this week to counter corporate environmental, social and governance policies identified with liberal activism, Ritholtz titled his post: “Y’all Should Stop Making Emotional Bets.”
“When investors allowed their personal beliefs about faith or politics to influence their capital allocations in the past, it has not worked out particularly well,” he wrote, citing several examples, including times when partisans opined incorrectly that Barack Obama’s “radicalism” was “killing the Dow” and that Donald Trump’s election would cause the market to tank.
Ritholtz, who has banged this drum several times, also linked to an earlier post in which he cited the selloff in Nike shares after the athletic apparel company created an ad featuring quarterback Colin Kaepernick, who’d drawn support and condemnation for taking a knee during the national anthem to protest racism.
