"Cultural Creatives" are people who care intensely about the environment and our role in it. We care about relationships and spiritual development. We tend to look for cooperative solutions to problems. We would prefer to cooperate with others than to compete with them. We would be willing to pay more in taxes if those taxes were to help improve the human and natural environment. We care about our psychological development. We care about social justice.

It is really no wonder that culturally creative people can feel alienated from the world of money and investing as it is portrayed in the media. The financial media tends to put its emphasis on finding hot stock tips and consumerism, valuing competition over cooperation, and valuing profit over social responsibility.

However, there is a natural home for culturally creative people who want to succeed with their investments. The values that we hold are actually ideal for successful investing based on a powerful model known as Modern Portfolio Theory. Nobel prize winning economist Harry Markowitz is the originator of Modern Portfolio Theory.

Modern Portfolio Theory looks at the market as a whole rather than focusing on individual stocks. Individual investments are analyzed statistically, looking at their long-term return rate and their short-term volatility. More volatile stocks are equated with risk. The goal is to identify your acceptable level of risk tolerance, and then to create a portfolio that matches that level of risk.

DIVERSIFICATION ADDS STABILITY TO YOUR PORTFOLIO

Markowitz made some remarkably powerful observations about investing. He looked beyond the picking of individual stocks, which previously had dominated most people's thinking about investing, and considered the issue of creating overall portfolios that are efficient in terms of generating maximum return for a given degree of risk.

Markowitz noted that certain stocks have an inverse correlation to each other in terms of price. For a simplified, hypothetical example, let's say that high gold prices are good for a gold mining company, but bad for a gold jewelry manufacturer. The high gold prices are good for the mining company, because they now get more for their raw gold. The high price of gold is bad for the jewelry company though, because now they need to pay more for the raw material that their product is made of, cutting into their profits.

As an investor, you will attain better diversification if you invest in a gold mining company and a gold jewelry company than if you invest in two gold mining companies or two gold jewelry companies. This is because the gold mining company and gold jewelry company have a low correlation to each other. When one goes down, the other tends to go up and visa versa.

Markowitz teaches us that a portfolio, properly invested with good diversification, will weather changes over the long haul better than a portfolio where there is limited diversification. The beauty of this approach for Cultural Creatives, is that it gives us a way to invest which is not a competitive struggle. By finding your risk tolerance at any given stage of your life, and assigning an appropriate diversified asset allocation for your investments,you have now greatly simplified the whole process of investing. Now you can turn your attention to the things that you really care about: your family, your work and your passions.

Cultural Creatives have an investing advantage: we are involved in our own psychological development. The Modern Portfolio Theory approach allows us to focus on our own wealth building behavior rather than on the competitive marketplace. We turn the focus to our own values and goals, working to align our present behavior with the outcomes we envision for our lives. Now, wealth building becomes a centering exercise - an aspect of our lives where we become aware of what we want and need, and invest according to our vision of our own lives.