Venturing into the unknown with philanthropy

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Lately, there has been a lot of buzz about how the definition of philanthropy must change for it to succeed against the challenges of society at present. Older methods serve their purpose to help solve one problem or two but, ultimately, the world needs more innovative ideas to come to the fore. For philanthropy to succeed against the ills of society at present, more people are called upon to venture into the unknown.

Previously, philanthropy was thought of to be a sort of side-effect to wealth. It was the endeavor of well-meaning and wealthy individuals who sought to help out others by donating to worthy causes. For a time, it helped many less fortunate individuals receive necessary support for things like their basic needs to required funds that empower them to seek a source of livelihood.

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This new type of philanthropy is all about a more hands-on and pro-active approach. It involves a lot of risks and, perhaps, some sacrifices to be made for each venture to produce significant results.

In trying to provide solutions to many of the world’s problems, revolutionary ideas are needed. Continuing to support proven methods are still important but for greater changes to happen, more philanthropists should seek out truly radical innovations that can transform what is considered to be the norm into something that is more sustainable and accessible to more and more people.

Like in investments, the philanthropists of today must seek out areas where there are great risks to find greater returns.

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Stage right, exit: Bowing out of the investment arena

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Save for some, many venture capitalists stay with a business for a long time. From the business’ inception to its growth and flourish, they remain faithful to the company’s goals and endeavors, unwavering in support and presence. The same is true with some investors who have developed some sort of affinity for a particular company. From the initial public offering to the height of a bullish run—even through the bearish times—they remain invested. If they’re lucky enough, this loyalty will eventually pay off, and the company will grow to become a valuable piece of business property that yields a substantial profit.

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But one cannot play the markets forever, and sometimes, even the most loyal investor may want out in a particular investment due to several reasons (e.g., investment objectives have already been met or to mitigate impending failure). In all cases, however, individuals must have an exit strategy at hand before finally bowing out of a particular investment.

Exiting is straightforward for investors who own company shares via publicly traded stocks, as the shares can be easily floated back to the market where many other investors are willing to buy the stocks in their current prices. But for venture capitalists who own shares of private companies, getting out of the investment may not be as easy. In this case, the only exit strategy available for them is the first opportunity to transform their ownership (which is an illiquid asset) into cash (a liquid asset).

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Momentum leverage: Exploring the world of opportunistic investing

Most investors are familiar with the investment advice “buy low, sell high”—a strategy that involves buying assets at their lowest prices and selling them later for a much higher price. By doing this, investors can prevent untoward losses and instead profit from their active engagement in the free markets.

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But with the diversity of investment activities, not all investors use this strategy in the same degree as others. Some of the emotional ones tend to exit the market during a bearish run, probably in an attempt to preempt further losses, thus taking full advantage of this advice. On the other hand, some investors stick to this principle and take full advantage of the market momentum whenever it presents itself. This type of investing is called opportunistic investing.

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This investing strategy, adopted by asset management mavens such as Alex von Furstenberg, seeks to yield the highest possible returns by seeking available investment opportunities at any given time regardless of self-imposed limitations or conventional investing algorithms. This is done by searching for potentially lucrative yet underperforming and currently depressed properties and acquiring them via a great deal of borrowed funds—a seeming imbalance which causes other investors to behave irrationally. After a short holding period, opportunistic investors take advantage of this momentum to sell the property at prices which yield at least 20 percent in profit.

Apart from the large yields, opportunistic investors also experience a low degree of volatility, making this approach one of the more stable paths toward investing success.

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Opportunistic investing is Alex von Furstenberg’s claim to fame in this extremely volatile industry. Find out more about his business practices at AlexVonFurstenberg.com.

Profiling the aggressive investor

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Aggressive investors comprise a minority in the investor market, yet they rake in probably more than the combined yields of all conservative investors. If taking on such investing personality is so profitable, then why aren’t all investors aggressive?

Apparently, being aggressive has its boons and banes, and it depends on the investors’ personality if they have what it takes to face the challenges posed by this investment strategy. So before deciding to go hardline in taking the stock market plunge, prospective investors may want to learn about the multi-dimensional aspect of being an aggressive investor.

Investment goals

Aggressive investors tend to expect lucrative returns from their investments, especially in the short term. They are not that concerned about asset protection as much as taking profits.

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Risk tolerance

Aggressive investors take risks as they come. They don’t really mind if the assets they spend capital on hold the possibility of crashing, as long as they promise large returns. This may be influenced by many factors, including the investor’s young age and an intense desire to accumulate wealth. The former is greatly determinant, as risk tolerance usually declines with age.

Ability to cope with uncertainty

Quite ironically, it’s the aggressive investors who are very “Zen” when it comes to investing. As they are very well aware of the market’s volatility, they don’t really panic when the markets crash. In fact, they view market crashes as an opportunity to leverage the “buy low, sell high” tactic, thus ensuring great rewards in the long run.

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Many would consider businessman-turned-philanthropist Alex von Furstenberg as an aggressive investor, especially when considering his investments geared toward society’s progress. Learn more about his philanthropic endeavors by visiting his website.

How investments mirror the investor’s personality

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Much like how people differ when it comes to facing life, investors also adapt different styles in tackling the volatile world of investments. More often than not, the way by which investors handle their investments is greatly reflective of their actual personalities, as idiosyncrasies might play a large role in influencing investment decisions.

For example, those who are risk-averse usually end up becoming conservative investors. They are the “planners”—careful and meticulous investors who are alright with modest returns as long as the capital remains intact. They’d rather invest in expensive and slow-growing blue chip stocks, so long as they are assured of asset protection and regular dividend payouts.

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Meanwhile, there are people with strong personalities who aren’t afraid of the risks and who would rather lose in the act of winning rather than staying in a gray area. Applied in investing, they are known as the “players”—investors who actively play in the markets and invest in securities with the highest growth prospects, notwithstanding the counterpoising risks. They gain big, they lose big—such is the life of the players.

But there also those who are more optimistic than most people and who are willing to learn should they be given the opportunity. In investment speak, these people are “adventurers”—investors who see the markets as an opportunity to improve their present status and will do whatever it takes to learn its labyrinthine secrets toward success.

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Brown University alumnus Alex von Furstenberg is an investment maven who specializes in opportunistic investing. Learn more about his investing personality by visiting his website.

Start small, dream big: Focusing on future changemakers

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When people think of the problems in society, they see many great obstacles to equality, peace, and prosperity. In the face of seemingly insurmountable odds, it can sometimes be easy to forget just how many people are willing to work and do some good in order to change the status quo.

Commonly overlooked in endeavors to make lasting changes to society are the young people. Adults often expect very little of the youth. They are repeatedly told to stay out of trouble and to continue with their studies. But what if the young people of today are already ready? What if they just need some encouragement and guidance to take on the larger problems in society?

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By averting one’s eyes from the problems for a while, one can see that there are many people who are willing to work for social change, including the youth. Presently, young people have already faced their fair share of inequalities found in society. Many of them have gone beyond themselves to show compassion, stand up against injustice, and contribute to their community.

As programs like the Peace First prize show, many of today’s youth do have great ideas on how to create lasting changes to society. Acknowledging their ideas seriously and inviting them to take on important roles as early as now can encourage them to continue working for their vision of a better future.

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From well-meaning to making a difference: Motivating philanthropy

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While monetary support is important in many philanthropic efforts, for others, understanding that true philanthropy requires a drive to change the status quo is more important. Indeed, in today’s world, there are still many problems in inequality that need to be remedied.

For one reason or another, there are many people who are in dire need of support and resources to reclaim their lives from poverty. There are systems in place that perpetuate the problems in society today, and changing the world for the better requires a lot more from people who can donate their time and effort to those in need.

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The act of giving is a good start to changing the situation that exists. To continue such efforts, however, innovative thinking is necessary. People behind philanthropic endeavors may also need to think of their programs as businesses. Beyond their intention to provide help for people who need it, they also need to think of ways to turn the program into something profitable – not for their own gain, but to ensure that the endeavor is self-sustaining.

Effective philanthropic endeavors can grow without being dependent on outside investment. From stop-gap measures that fill in for an immediate need, they can evolve into larger programs that serve to empower the people who were previously in need and may even benefit the community as a whole.

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Visit this blog site for Alexander von Fürstenberg to find various stories on efforts to change society for the better.