Personal Portfolios: The What and Why of Positive Psychology
The What and Why of Positive Psychology
“Positive psychology is the scientific study of what makes life most worth living” – Christopher Peterson
Positive psychology takes a scientific approach to studying human thoughts, feelings, and behavior, with a focus on strengths instead of weaknesses and building the good instead of repairing the bad. Studies prove that when humans take an approach-based mindset versus an avoidance mindset, it helps people better achieve their goals. It asks the question, “What are you driving toward” versus “What are you avoiding?”
The SPIRE model of positive psychology boils down the different dimensions that contribute to happiness and wellbeing.
Spiritual wellbeing: Meaning and what you most value
Physical wellbeing: Health and vitality of your body
Intellectual wellbeing: Creativity and learning new things
Relational wellbeing: The harmony and support of your relationships
Emotional wellbeing: Feelings and attitudes
Much of investing has historically been driven by what people do not want to invest in. We believe that in order to help people be happier, the focus should be more balanced. Our four financial personality traits (Purpose, Security, Touch, Viewpoint) encompass these different dimensions to help people understand what approach to their finances will help them feel more fulfilled.
Building Your Personal Index Portfolio
Personal Index Portfolios combine the best features of low-cost indexing, active tax management, and the inclusion of your environmental, social, and faith-based views.
Research has long shown that trying to beat the performance of an index using active portfolio management is ultimately a “losers game" and that taxes and other costs dramatically reduce portfolio performance over time compared to index investing.
Instead of spending our efforts on outcomes, we can’t control (beating the market), we focus on the things we can control. We document those into a written Investment Policy created specifically for you. We are not stock pickers or market timers, our role is to manage your portfolio according to this written plan, serving as your fiduciary.
Our scientifically-backed financial personality assessment for investing (similar to a Myers-Briggs® Type Indicator) is designed to draw the strongest positive connection between you and your money. Before we start the investment process, we take the time to understand what drives your financial decisions along these dimensions:
- Purpose: having a positive impact on the world through ethical and Socially Responsible Investing
- Faith: Ensure elements of your faith are reflected in your portfolio
- Security: Understanding your need for security and peace of mind
- Touch: Linking your investing with a desire for meaningful relationships
- Viewpoint: Exposure to themes you feel are changing the world
If you would like to learn more about your Financial Personality, we invite you to take our assessment here. It's short (~3 minutes) and completely free. We will share the results with you regardless. And, if you would like to dig deeper to understand how we use this information to build personal index portfolios, we would welcome the opportunity to speak with you.
Todd Smurl, CFA