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    Starbucks is looking externally for its next CEO, Howard Schultz says

    Starbucks’ next CEO will come from outside the company, interim leader Howard Schultz told the Wall Street Journal.
    “For the future of the company, we need a domain of experience and expertise in a number of disciplines that we don’t have now,” Schultz told the newspaper.
    Despite speculation from analysts and investors, Schultz has publicly denied that he’s planning on staying in the top job past fall.

    Starbucks Chairman and CEO Howard Schultz speaks at the Annual Meeting of Shareholders in Seattle, Washington on March 22, 2017.
    Jason Redmond | AFP | Getty Images

    Starbucks’ next CEO will come from outside the company, interim leader Howard Schultz told the Wall Street Journal.
    Schultz returned for his third stint in the top job in April after the departure of former CEO Kevin Johnson. Despite speculation from analysts and investors, he’s publicly denied that he’s planning on staying in the top job past autumn, when a new successor will be named. Schultz told the newspaper that he’s planning on leaving Starbucks’ C-suite entirely by the company’s next annual shareholder meeting in March.

    Whoever takes the reins will inherit a business that’s still recovering from the pandemic, particularly in China, and is facing a swelling effort by baristas to unionize in the U.S. The company is also upgrading its U.S. cafes to match how customers want to order and pick up their coffees and striving to meet ambitious sustainability goals.
    “For the future of the company, we need a domain of experience and expertise in a number of disciplines that we don’t have now,” Schultz told the Journal.
    Schultz has been waging an aggressive campaign against the union push, which has weighed on Starbucks’ stock. Shares have fallen 13% since he returned to the company.
    The union efforts could also be why the company is seeking fresh blood.
    “Unionization publicity could be a factor pushing the company to look externally for a corporate culture founded on benevolence by Mr. Schultz,” Cowen analyst Andrew Charles wrote to clients in March after the announcement of the CEO search.

    Union organizers and the National Labor Relations Board have accused Starbucks of illegal labor practices, which the company has denied. Workers United, the union that’s backing organizing efforts at Starbucks, said in a Friday filing that the coffee chain is violating federal labor law by permanently closing a unionized Ithaca, New York, store. A Starbucks spokesperson told CNBC that opening and closing stores is a regular part of its business.
    Read more of Schultz’s thoughts on Starbucks succession plans here.

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    'There is hope': Prince William in rallying cry for the environment

    “Together, if we harness the very best of humankind and restore our planet we will protect it for our children, for our grandchildren and for future generations to come,” William says.
    William has often spoken on issues related to the environment. In April 2021, the prince spoke about the “intrinsic link between nature and climate change.”
    His comments come at a time of immense concern about the environment, global warming and the continued use of fossil fuels.

    Prince William delivers a speech in London on June 4, 2022. In his speech, the Duke of Cambridge said “decades of making the case for taking better care of our world” meant environmental issues were “now at the top of the global agenda.”
    Daniel Leal | AFP | Getty Images

    Prince William issued a rallying cry for the environment over the weekend, with the second in line to the British throne saying there was a “pressing need to protect and restore our planet.”
    In a speech in London on Saturday during celebrations to mark Queen Elizabeth II’s Platinum Jubilee, William noted that his grandmother, who is 96, had been alive for almost a century.  

    “In that time, mankind has benefited from unimaginable technological developments and scientific breakthroughs,” he said. “And although those breakthroughs have increased our awareness of the impact humans have on our world, our planet has become more fragile.”
    “Today, in 2022, as the queen celebrates her Platinum Jubilee, the pressing need to protect and restore our planet has never been more urgent,” he said.
    The Duke of Cambridge added that “decades of making the case for taking better care of our world” meant environmental issues were “now at the top of the global agenda.”
    “More and more businesses and politicians are answering the call and, perhaps most inspiringly, the cause is now being spearheaded by an amazing and united generation of young people across the world,” he said.

    Read more about energy from CNBC Pro

    William has often spoken on issues related to the environment. In April 2021, the prince spoke about the “intrinsic link between nature and climate change.”

    In October, a few months later, he appeared to take a swipe at the space tourism espoused by some of the world’s most high-profile billionaires.
    Such remarks will be certain to raise eyebrows in some corners given the Royal Family’s extensive use of air travel — which the WWF has described as “currently the most carbon intensive activity an individual can make” — as well as their fondness for hunting animals.
    Huge concern, but optimism too
    William’s latest comments come at a time of immense concern about the environment, global warming and the continued use of fossil fuels.
    In March of this year, the International Energy Agency reported that 2021 saw energy-related carbon dioxide emissions rise to their highest level in history.
    The IEA found that energy-related global CO2 emissions increased by 6% in 2021 to reach 36.3 billion metric tons, a record high.
    The same month saw U.N. Secretary General Antonio Guterres warn that the planet had emerged from last year’s COP26 summit in Glasgow with “a certain naïve optimism” and was “sleepwalking to climate catastrophe.”
    Despite the challenging situation on the ground, William appeared to be confident that a meaningful shift was around the corner. “Tonight has been full of such optimism and joy, and there is hope,” he said.
    “Together, if we harness the very best of humankind and restore our planet we will protect it for our children, for our grandchildren and for future generations to come.”
    “They will be able to say with pride at what’s been achieved: ‘What a wonderful world.'” More

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    China tries to shake off the worst of the pandemic in a long, zero-Covid journey

    After a surge of omicron cases across the country since March, the nationwide daily Covid case count has fallen to well below 50, according to official data.
    “Our high-frequency trackers suggest that barring another severe Covid resurgence and related lockdowns, mobility, construction and ports operation could recover to pre-lockdown levels in around one month,” Goldman Sachs China Economist Lisheng Wang and a team said in a report Saturday.
    In a significant step toward normality, the capital city of Beijing allowed most restaurants to resume in-store dining Monday, after a hiatus of about a month.

    A handful of tourists visit the normally packed Yuyuan Garden during the Dragon Boat Festival holiday on June 4, 2022, in Shanghai, where authorities are allowing a return to normal life and business activity.
    Vcg | Visual China Group | Getty Images

    BEIJING — China is starting to show signs of recovery from the latest Covid shock.
    In a significant step toward normality, the capital city of Beijing allowed restaurants in most districts to resume in-store dining on Monday — after a hiatus of about a month. Most other businesses could also restore in-person operations.

    The southeastern metropolis of Shanghai, which was locked down for about two months, pressed on with a reopening plan that kicked off last week. Residents flocked to camping sites and local parks over the long weekend holiday that began Friday, according to travel booking site Trip.com.
    As people returned to work on Monday, a traffic congestion tracker from Baidu showed heavy traffic in Beijing and Shanghai during the morning commute — versus light traffic a week earlier. Both cities also relaxed the frequency of virus tests to three days from two.
    After a surge of omicron cases across the country since March, the nationwide daily Covid case count has fallen to well below 50, according to official data.

    The unsynchronized lockdowns and reopenings across major cities suggest that China’s ongoing post-lockdown growth recovery should be less steep than the V-shaped one in spring 2020.

    Goldman Sachs

    Under China’s “dynamic zero-Covid policy” mandate, local authorities have used strict travel bans and stay-home orders to control the virus. Those restrictions disrupted supply chains and other business, sending retail sales and industrial production falling in April.
    “Our high-frequency trackers suggest that barring another severe Covid resurgence and related lockdowns, mobility, construction and ports operation could recover to pre-lockdown levels in around one month,” Goldman Sachs China Economist Lisheng Wang and a team said in a report Saturday.

    However, businesses in the service sector that involve close human contact would find it challenging to “achieve a full recovery any time soon,” the report said. “The unsynchronized lockdowns and reopenings across major cities suggest that China’s ongoing post-lockdown growth recovery should be less steep than the V-shaped one in spring 2020.”

    Goldman’s analysts pointed to the absence of growth drivers such as exports and real estate, and greater economic costs for controlling a Covid variant more transmissible than the one in 2020.
    Real estate accounts for more than a quarter of China’s GDP, according to Moody’s.
    During a press conference last week, People’s Bank of China Deputy Governor Pan Gongsheng gave little sign of additional large-scale support for the sector. He noted how the pandemic restricted real estate construction and sales. But he emphasized Beijing’s policy of limiting speculation in the sector, and described authorities’ latest moves to relax some curbs on real estate loans.

    Sluggish recovery

    Data from last weekend’s holiday, called the Dragon Boat Festival, added to indications that the economy won’t be snapping back to growth anytime soon.
    The long weekend movie box office of 178 million yuan ($26.75 million) was the worst Dragon Boat Festival performance since 2012, excluding the worst of the pandemic in 2020, according to ticketing site Maoyan.
    Spending on domestic tourism during the holiday this year dropped 12.2% from last year, to 25.82 billion yuan ($3.88 billion), according to the Ministry of Culture and Tourism.
    But for the calendar year, it marked an improvement from May. The nearly $4 billion figure was about two-thirds the spending during the same holiday in 2019. That was better than the recovery to 44% of pre-pandemic levels during a longer holiday in early May, while Shanghai was still locked down.
    In the last week, business survey data for manufacturing and services in May showed recovery from April lows. But the data, known as the Purchasing Managers’ Index (PMI), remained in contraction territory.
    The contraction rate is similar to that between February and March, said Bruce Pang, head of macro and strategy research at China Renaissance. He said that since April’s economic indicators declined, the latest figures show the pandemic’s impact remained in May and the economy remains in its most severe situation since the second quarter of 2020.

    Read more about China from CNBC Pro

    The PMI data showed continued declines in business plans for hiring.
    Pang noted that uncertainty about future income, as well as quarantine risk for travelers, weighed on tourism spending during the latest Dragon Boat Festival.
    Even if much of Beijing and Shanghai are not officially locked down, specific apartment buildings or neighborhoods can remain closed off due to contact with Covid cases.
    Not all businesses have resumed work either. Shanghai Disney Resort has been closed since March 21. Universal Beijing Resort has been shut since May 1 until further notice.
    Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

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    Stock futures are flat after a losing week on Wall Street

    Traders on the floor of the NYSE, June 3, 2022.
    Source: NYSE

    Stock futures were little changed in overnight trading Sunday after a losing week as investors continued to bet that the Federal Reserve will tighten monetary policy aggressively to combat surging inflation.
    Futures on the Dow Jones Industrial Average gained 30 points. S&P 500 futures and Nasdaq 100 futures were both flat.

    The overnight action followed another disappointing week for investors as the major averages suffered modest losses. The blue-chip Dow fell 0.9% for its ninth negative week in 10, while the S&P 500 and the Nasdaq Composite lost 1.2% and 1%, respectively, last week for their eighth losing week in nine.
    Investors have been grappling with fears that the central bank could raise interest rates too fast and too much, causing a recession. Recent statements from the rate-setting Fed members indicate that 50 basis point — or a half-percentage-point — rate increases are likely at the June and July meetings.
    The U.S. economy added 390,000 jobs in May, which came in better than expected despite fears of an economic slowdown and amid the roaring pace of inflation. Some investors believe the strong hiring data could be clearing the way for the Fed to remain aggressive.
    “For now, the market sees a Federal Reserve trying to navigate a painful and bumpy road, yet trying to find a soft exit,” said Quincy Krosby, chief equity strategist at LPL Financial. “And the market finds itself between wanting to believe in the rallies but not believing that the Fed can negotiate a soft landing.”
    Investors will be focused on the consumer price index reading for May, which is slated for Friday morning release. The key inflation gauge is expected to be just slightly cooler than April, which could be interpreted by some as a confirmation that inflation has peaked.

    The stock market has had a volatile year with the major averages pulling back double digits from their record highs. The S&P 500 is off by 14.7% from its all-time high reached in January. The equity benchmark briefly dipped into bear market territory last month.
    “The second half of 2022 is going to be a roller coaster ride for investors unless the Fed is able to bring inflation under control without a hard landing,” said Peter Essele, head of portfolio management at Commonwealth Financial Network. “Most investors seem to be wagering on a crash-and-burn scenario at this point as recessionary fears abound, and equity markets fail to develop any sort of positive momentum.”

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    A paradigm shift has begun in markets, says Morgan Stanley's Ted Pick. Here's what to expect

    Global markets are in the beginning of a fundamental shift after a 15-year period defined by low interest rates and cheap corporate debt, according to Morgan Stanley co-President Ted Pick.
    The transition from the economic conditions that followed the 2008 financial crisis and whatever comes next will take “12, 18, 24 months” to unfold, he said last week at a New York financial conference.
    Out of the ashes of this transition period, a new business cycle will emerge, Pick said.

    Trader on the floor of the NYSE, June 1, 2022.
    Source: NYSE

    Global markets are in the beginning of a fundamental shift after a nearly 15-year period defined by low interest rates and cheap corporate debt, according to Morgan Stanley co-President Ted Pick.
    The transition from the economic conditions that followed the 2008 financial crisis and whatever comes next will take “12, 18, 24 months” to unfold, according to Pick, who spoke this week at a New York financial conference.

    “It’s an extraordinary moment; we have our first pandemic in 100 years. We have our first invasion in Europe in 75 years. And we have our first inflation around the world in 40 years,” Pick said. “When you look at the combination, the intersection of the pandemic, of the war, of the inflation, it signals paradigm shift, the end of 15 years of financial repression and the next era to come.”
    Wall Street’s top executives making the rounds at financial conferences this week delivered dire warnings about the economy, led by JPMorgan Chase CEO Jamie Dimon, who said that a “hurricane is right out there, down the road, coming our way.” That sentiment was echoed by Goldman Sachs President John Waldron, who called the overlapping “shocks to the system” unprecedented. Even regional bank CEO Bill Demchak said he thought a recession was unavoidable.
    Instead of just raising alarms, Pick — a three-decade Morgan Stanley veteran who leads the firm’s trading and banking division — gave some historical context as well as his impression of what the tumultuous period ahead will look and feel like.

    Fire and Ice

    Markets will be dominated by two forces – concern over inflation, or “fire,” and recession, or “ice,” said Pick, who is considered a front-runner to eventually succeed CEO James Gorman.
    “We’ll have these periods where it feels awfully fiery, and other periods where it feels icy, and clients need to navigate around that,” Pick said.

    For Wall Street banks, certain businesses will boom, while others may idle. For years after the financial crisis, fixed income traders dealt with artificially becalmed markets, giving them less to do. Now, as central banks around the world begin to grapple with inflation, government bond and currency traders will be more active, according to Pick.
    The uncertainty of the period has, at least for the moment, reduced merger activity, as companies navigate the unknowns. JPMorgan said last month that second-quarter investment banking fees have plunged 45% so far, while trading revenues rose as much as 20%.
    “The banking calendar has quieted down a bit because people are trying to figure out whether we’re going to have this paradigm shift clarified sooner or later,” Pick said.

    Ted Pick, Morgan Stanley
    Source: Morgan Stanley

    In the short term, if economic growth holds up and inflation calms down in the second half of the year, the “Goldilocks” narrative will take hold, bolstering markets, he said. (For what its worth, Dimon, citing the Ukraine war’s impact on food and fuel prices and the Federal Reserve’s move to shrink its balance sheet, seemed pessimistic that this scenario will play out.)
    But the push and pull between inflation and recession concerns won’t be resolved overnight. Pick at several times referred to the post-2008 era as a period of “financial repression” — a theory in which policymakers keep interest rates low to provide cheap debt funding to countries and companies.
    “The 15 years of financial repression do not just go to what’s next in three or six months… we’ll be having this conversation for the next 12, 18, 24 months,” Pick said.

    Less than zero

    Low or even negative interest rates have been the hallmark of the previous era, as well as measures to inject money into the system including bond-buying programs collectively known as quantitative easing. The moves have penalized savers and encouraged rampant borrowing.
    By draining risk from the global financial system for years, central banks forced investors to take more risk to earn yield. Unprofitable corporations have been kept afloat by ready access to cheap debt. Thousands of start-ups have bloomed in recent years with a money burning, growth-at-any-cost mandate.
    That is over as central banks prioritize the battle against runaway inflation.
    The impact of their efforts will touch everyone from credit-card borrowers to employees of struggling corporations to the aspiring billionaires running Silicon Valley start-ups. Venture capital investors have been instructing start-ups to preserve cash and aim for actual profitability. Interest rates on many online savings accounts have edged closer to 1%.

    Remember 2018?

    But such shifts could be bumpy. The last time the Fed attempted quantitative tightening, back in 2018, odd things happened in stock, foreign exchange and oil markets. Less than a year after their campaign began, the world’s major central banks lost their nerve and halted QT programs amid slowing growth.
    Some observers are worried about Black Swan-type events happening in the plumbing of the financial system, including the bursting of what one hedge fund manager called “the greatest credit bubble of human history.” Dimon sees “at a minimum, huge volatility” as the major purchasers of government bonds may not have the ability or appetite to step in.
    Out of the ashes of this transition period, a new business cycle will emerge, Pick said.
    “This paradigm shift at some point will bring in a new cycle,” he said. “It’s been so long since we’ve had to consider what a world is like with real interest rates and real cost of capital that will distinguish winning companies from losing companies, winning stocks from losing stocks.”

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    Europe’s economy grapples with an acute energy shock

    For the best part of a decade, rock-bottom interest rates seemed like a fact of life in the euro zone—as did low inflation. Now consumer prices are rising at an annual rate exceeding 8%, well above the European Central Bank’s target of 2%. Members of the bank’s governing council have begun signalling their intent to raise rates soon, a message they are likely to reaffirm at a monetary-policy meeting on June 9th. But the ecb finds itself in a tricky position: of contending not only with surging prices, which might warrant rapid rate rises, but also gloomier growth prospects, which might warrant patience. The root cause of both developments is a severe energy-price shock. Prices of oil and natural gas had already been rising before Russia’s invasion of Ukraine; the war sent prices soaring higher still. Those rising commodity prices have played a much bigger role in pushing up consumer-price inflation in Europe than in America, where generous stimulus has also been a culprit. According to Goldman Sachs, a bank, energy prices in the euro area—which rose at an annual rate of a whopping 39% in May—are contributing about four percentage points to headline inflation, compared with two points in America. The effects are beginning to spill over to other consumer prices. “Core” inflation, which excludes food and energy prices, rose more quickly in the euro zone in May than economists had expected. German producer prices rose at a record clip of 33.5% in April, compared with last year, driven not just by energy, but also energy-intensive intermediate goods, such as metals, concrete and chemicals. The result of all this is a big hit to businesses’ costs and households’ purchasing power. In how much danger does it put the euro area’s economy? One consequence of the energy shock is lower household incomes in real terms. Wage growth has been picking up modestly across the zone, but still trails behind inflation. Some employers have made one-off payments to workers, to compensate them for surging prices without incurring higher recurring wage costs. Even then, however, annual pay growth in the Netherlands, for instance, stood at just 2.8% in May, notwithstanding strong business sentiment and a tight labour market. In one sense, this is good news for the ecb, because it reduces the risk of a wage-price spiral. But it may feed into lower consumption, weakening the rest of the economy in turn.A moderation in demand only adds to a heap of woes for the manufacturing sector, where confidence is already in steep decline. Renewed supply disruptions as a result of China’s recent lockdowns and high energy prices are hurting businesses, with Germany and eastern Europe looking most vulnerable to an industrial slowdown. New orders for the zone’s manufacturers in May fell for the first time since June 2020, indicating weaker demand. Export orders declined at their fastest pace in two years. Economists are therefore pencilling in slower growth over the rest of the year. But few expect an outright recession just yet. That is because some parts of the economy confront the energy shock from a position of strength, rather than weakness. Many services firms are still reaping the rewards from reopening and the end of Omicron-related lockdowns. Southern countries are benefiting the most, given their reliance on tourism. In Spain arrivals of sun-seeking northerners almost reached pre-pandemic levels in April. Overall, business sentiment in services remains strong, with many firms reporting a growing backlog of work. Jobs are still plentiful, too. Across the bloc there were three vacancies for every 100 jobs in the first quarter of 2022, a high level by historical standards. Businesses’ hiring expectations have remained solid, albeit slightly weaker since the start of the war in Ukraine. More than one in four businesses in Europe say that a lack of staff is preventing them from producing more.A hoard of savings built up during lockdowns should also provide consumers with some cushion against the energy shock. According to our calculations, such “excess” savings in France and Germany amounted to around a tenth of households’ disposable incomes in the first quarter of 2022. These buffers will blunt the impact of the energy shock. But they will not offset it altogether. Excess savings, for a start, are not evenly distributed. Poorer people in rich countries, and most households in poorer countries, have precious little left. In Slovakia, for example, the savings rate never increased much during the pandemic, and is now well below its long-term average. “Consumption weakness will come from lower-income households,” says Jens Eisenschmidt of Morgan Stanley, another bank. Indeed, retail sales, in real terms, have moved sideways for months.Many governments have put together sizeable spending programmes to shield households from high energy prices. According to Bruegel, a think-tank, Germany, France and Italy and others are spending between 1-2% of gdp. Not all of that is well-targeted, however. Much of it is going on relief for better-off households that do not need it; other measures have involved meddling with prices, with some of the benefit going to energy suppliers.Even if the euro area is spared a recession, then, the energy shock will be a drag on growth. The ecb faces an unenviable dilemma. With every increase in inflation on the back of food and energy prices, the European economy is getting weaker. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

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    For Americans behind on saving for retirement, a bad stock market can be a good time to invest more

    SMALL BUSINESS PLAYBOOK 2022
    Event Videos

    Many Americans saved more than ever during the pandemic backed by multiple rounds of government stimulus and a bull market in stocks.
    Small business owners often struggle to fund their own retirements, and the need to invest more in inventory and wages in the past few years has further stressed their finances.
    Savings rates among business owners have held up better than expected, according to 401(k) plan data, though there is still an opportunity for these retirement saving laggards to catch up.

    Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 20, 2022. 
    Andrew Kelly | Reuters

    Small business owners are among the Americans most likely to fall behind on saving for retirement. Investing back into a business is more often a priority for entrepreneurs with any excess cash than investing in a long-term tax-deferred retirement plan. Covid didn’t help.
    Amid the pandemic, scores of America’s small business owners stopped or cut back on their retirement savings, according to investment professionals and retirement experts, squeezed by rising labor and raw material costs, or in the worst-case scenario, facing business closures.

    To be sure, the pandemic didn’t take a toll on every small business in terms of retirement planning. Thirty-seven percent of small business owners say they aren’t confident that they are saving enough for retirement, according to a March survey by ShareBuilder 401k of 500 small businesses. But that’s down somewhat from the 44% who said two years earlier they weren’t confident in their retirement savings ability.
    Some data shows that, at least on the margins, small business owner savings rates mirrored the bump across all Americans during the pandemic. In 2019, the average monthly amount that active participants contributed to their 401(k) plan with Guideline, a retirement platform for small businesses, was $646. That increased to $783 in 2021, according to the company. For its part, Vanguard saw participation rates among small businesses rise to 73% in 2020 from 72% a year earlier, and deferral rates — the portion of an employee’s wages contributed to retirement — increase to 7.3% in 2020, up from 7.1% in 2019.
    But these outcomes generally don’t reflect the experiences of many of the country’s smallest businesses — including those in particularly hard-hit industries. Many of these businesses have fallen further behind in their retirement savings goals in recent years for a variety of reasons and are in need of a kick start, according to financial professionals. Coupled with the fact that many owners were never saving for retirement, the recent market gyrations could make it a good time to consider socking away money, or more money, for retirement. 
    Here are a few ideas on how to close the gap.
    1. Put at least 10% of income into retirement if you can
    Generally, investing experts suggest saving 10% to 15% of your earnings annually over a 40-year-career — just to maintain the same standard of living at retirement, said Stuart Robertson, CEO of ShareBuilder 401k. Yet the March survey found that only 38% of businesses surveyed were saving 10% or more. Meanwhile, 24% said they were not currently contributing.

    2. Cut back on budget and redirect to savings
    David Peters, founder and owner of Peters Tax Preparation & Consulting in Richmond, Va., has been telling business owners to take a hard look at their budget, paying close attention to where they are spending their money and searching for ways to cut. For instance, they might be able to work at home and save on gas or cut unneeded luxury items. “A smart move would be to cut some of the current expenses so you can continue to save for the long-term goals,” he said.
    3. Increase investment portfolio risk
    Another option, for those already saving, could be to take on some more investment risk, while also cutting spending, as appropriate. “If you increase your allocation so you were getting two or three percentage points higher on a rate of return, and you reduce your spending by 2% to 3%, and add on the power of compounding, it can be very powerful for returns,” said Timothy Speiss, tax partner in the Personal Wealth Advisors Group at EisnerAmper LLP in New York.
    That may seem like a tough pill to swallow amid the recent market volatility, but for small business owners that have cash right now, they may be able to take advantage of some funds that could be underpriced. “People are apprehensive to save when they see the red numbers showing up every day,” Peters said, but because of the market swings, “there may be opportunities they wouldn’t otherwise have.”
    As Dan Wiener, who runs the Independent Adviser for Vanguard Investors, recently told CNBC’s Bob Pisani, when the S&P 500 falls more than 3.5% on a single day or series of days, they are more often than not buying opportunities. Between June 1983 and the end of March 2022, this occurred 65 times and produced average returns of 25.6% over the next year. “Buying on those big one-day price declines has been profitable more often than not if you’re willing to look out just one year,” he said.  
    4. Create a plan and stick to it
    While some small business owners may be concerned the market will fall further, retirement savings professionals said that things tend to even out over time when owners contribute regularly to their retirement. The underlying motivation shouldn’t be to pick the best days, but to create a plan to save for the long-term and stick to it.
    By just contributing regularly, investors get the benefits of dollar-cost-averaging, meaning you’re not always buying at a high or a low, said Kevin Busque, CEO and co-founder of Guideline. “When you set it and forget it, you don’t have to worry about timing the market.”
    Robertson offers the example of an investor who consistently buys a fund for $500, during a high market, low market, and recovering market. First, the investor buys five shares at $100 each. He then buys 10 shares at $50 each, and finally, he purchases 6.67 shares for $75 each. His total outlay is around $1,500, and the average share price for the fund is $75. Yet the total market value for his 21.67 shares is $1625.25, so he’s ahead even though he bought some shares at a market high and some at a market low.
    “They can save any way they want; the important thing is that they are doing it,” Robertson said. More

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    That socially responsible fund may not be as ‘green’ as you think. Here's how to pick one

    Investors poured $69.2 billion into environmental, social and governance funds (also known as sustainable or impact funds) in 2021, an annual record, according to Morningstar.
    But it’s not always easy to know if a specific fund aligns well with your values.
    ESG experts outline a few simple steps investors can take.

    Tetra Images – Erik Isakson | Brand X Pictures | Getty Images

    Investment funds that promote values like the environment and social good have become more popular.
    But trying to pick a so-called ESG fund — especially one that aligns well with your interests — may seem about as easy as drying a towel in a rainstorm.

    “I think it can be really hard to know where to start,” said Fabian Willskytt, associate director of public markets at Align Impact, a financial advice firm that specializes in values-based investing.
    Luckily, there are some simple steps investors can take to get started and invest with confidence.

    ESG funds

    Steve Cicero | Photographer’s Choice | Getty Images

    Funds that allocate investor money according to environmental, social and governance issues held $357 billion at the end of 2021 — more than four times the total three years earlier, according to Morningstar, which tracks data on mutual and exchange-traded funds.
    Investors poured $69.2 billion into ESG funds (also known as sustainable or impact funds) last year, an annual record, according to Morningstar.
    These funds come in a variety of flavors. Some may seek to promote gender or racial equality, invest in green-energy technology or avoid fossil-fuel, tobacco or gun companies, for example.

    Women and younger investors (under 40 years old) are most likely to be interested in ESG investments, according to Cerulli Associates survey data. About 34% of financial advisors used ESG funds with clients in 2021, up from 32% in 2020, according to the Financial Planning Association.
    There are now more than 550 ESG mutual and exchange-traded funds available to U.S. investors — more than double the universe five years ago, according to Morningstar.

    “An individual investor has a lot more [ESG options] and can build a portfolio in ways they couldn’t 10 years ago,” said Michael Young, manager of education programs at the Forum for Sustainable and Responsible Investment. “Almost every [asset] category I can think of has a fund option, so we’ve come a long way.”
    But fund managers may use varying degrees of rigor when investing your money — meaning that environment-focused fund you bought isn’t necessarily as “green” as you think.
    Here’s an example: Some fund managers may “integrate” ESG values when picking where to invest money, but it may only play a supporting (and not a central) role. Conversely, other managers have an explicit ESG mandate that acts as the linchpin of their investment decisions.
    But investors may not know the difference.
    The Securities and Exchange Commission proposed rules last week that would increase transparency for investors and help make it easier to select an ESG fund. The rules would also crack down on “greenwashing,” whereby money managers mislead investors over ESG fund holdings.

    ESG tips for investors

    Getty Images

    All this might leave you thinking: How can I get started? And how can I be confident my investments truly align with my values?
    There are some simple steps investors can take, according to ESG experts.
    One way to start is by examining the asset manager, which serves as a good “shorthand” for investors, according to Willskytt at Align Impact.
    Some firms are focused on ESG and have a long history of investing this way — both of which are encouraging signs for people serious about values-based investing, he said.

    If you have confidence in the manager, the funds will be more or less strong from an ESG perspective.

    Fabian Willskytt
    associate director of public markets at Align Impact

    Investors can get a sense of a firm’s commitment by looking at its website and whether it displays ESG as a major focus, he added. From there, investors can pick from that firm’s available funds.
    “It’s a definitely a red flag if you can only find the barest of [website] information,” said Jon Hale, director of sustainability research for the Americas at Sustainalytics, which is owned by Morningstar. “It suggests the commitment maybe isn’t as high as with other funds.”
    Examples of ESG-focused firms include Calvert Research and Management and Impax Asset Management, Willskytt said. Nuveen, which is owned by TIAA, also has a relatively long track record of ESG investing, he added.
    Morningstar rated Calvert and Pax, along with four others (Australian Ethical, Parnassus Investments, Robeco and Stewart Investors) as the ESG asset-management leaders, according to an ESG Commitment Level assessment issued in 2020. (However, not all cater to U.S. individual investors.) An additional six, including Nuveen/TIAA, ranked a tier below in the “advanced” ESG category.
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    “If you have confidence in the manager, the funds will be more or less strong from an ESG perspective,” Willskytt said. “Then it’s about finding the flavors that work for you.”
    There is a drawback, however. Despite ESG fund growth, investors may not yet be able to easily find a fund that corresponds with a specific issue, depending on the niche. There are plenty of climate-focused funds and broad ESG funds that account for many different value-based filters, for example, but something like a gun-free fund is harder to find, experts said.
    Most (70%) of sustainable funds are actively managed, according to Morningstar. They may carry a bigger annual fee than current funds in your portfolio (depending on your current holdings).
    Investors who want to learn a bit more about ESG before taking the plunge can review a free course on the basics from the Forum for Sustainable and Responsible Investment.

    Another approach

    Thomas Barwick | DigitalVision | Getty Images

    Investors can also start by sifting through a few free databases of mutual funds and ETFs.
    The Forum for Sustainable and Responsible Investment has one that lets investors sort ESG funds according to categories like asset class (stock, bond, and balanced funds, for example), issue type and investment minimum.
    This list isn’t exhaustive, though — it includes funds from Forum member firms. (However, the fact that the firm is a member may be a reliable screen for the asset manager’s ESG rigor, Young said.)
    As You Sow is another organization that can help investors find funds that are fossil-fuel-free, gender-equal, gun-free, prison-free, weapons-free and tobacco-free, for example. It maintains rankings of the top funds by category.

    An individual investor has a lot more [ESG options] and can build a portfolio in ways they couldn’t 10 years ago.

    Michael Young
    manager of education programs at the Forum for Sustainable and Responsible Investment

    Alternatively, investors can also use As You Sow’s website to gauge how well their current investments align with their values. They can type in a fund’s ticker symbol, which generates a fund score according to different value categories.
    Other firms also assign ESG ratings to specific funds. Morningstar, for example, assigns a certain number of “globes” (5 being the best score) so investors can assess the fund’s ESG scope. Morningstar has an ESG Screener that also lets investors filter for funds according to certain ESG parameters.  

    One caveat: The globe system and other third-party ratings don’t necessarily signal an asset manager’s ESG intent. In theory, a fund could have stellar ESG ratings by accident, not due to a manager’s focus.  
    Investors can use fund databases to identify ESG investments they might like, then research the asset-management firm to see how committed the firm is to ESG overall.
    For investors who aren’t as do-it-yourself oriented, working with a financial advisor well-versed in ESG may be the most surefire way to know your investments most align with your values and mesh with your overall portfolio and investment goals. Advisors may have more advanced screening tools at their disposal relative to a retail investor, for example.

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