Socially Responsible Investing and Your Portfolio
- Author Denisa Tova
- Published November 9, 2011
- Word count 471
It could be said that socially responsible investors use both their heart and their head when it comes to making financial decisions. Socially responsible investing (SRI) integrates personal values and social and environmental concerns with investment decisions. SRI is also known as mission investing, sustainable investing, green investing, etc.
Where do you stand?
Whether liberal or conservative, there are causes to support in the SRI world. Some are concerned about tobacco and alcohol. Others are not. But there can also be crossover, as SR investments can be both environmentally friendly and anti-nuclear, for example.
The first SRI fund, started in 1971 in the U.S., grew to $2.29 trillion by the end of 2005. The Social Investment Forum reports that in 2010 the SRI market accounted for $3.07 trillion out of the total $25.2 trillion U.S. investment marketplace. Social investments in the U.S. grew 380 percent from 1995 to 2010.
When it comes to influencing socially responsible change, money talks.
Socially conscious investors speak with their pocketbooks to encourage corporations to improve practices on environmental and social issues and to build wealth in underserved communities by employing these approaches:
-
Screening for negative and positive causes, such as tobacco, alcohol, gambling, weapons, animal testing, environment, human rights, employment equality, community investment, etc.
-
Taking an active role in talking with companies on social and environmental issues.
-
Directing capital from investors and lenders to underserved communities, providing access to credit, equity, capital, and basic banking products.
Although market declines have impacted many SRI funds, I think that market volatility will draw more investors to SRI investing going forward. The added emphasis on responsible investing means that investors will pay more attention to how their dollars are being invested.
Resource arms investors with information
The Social Investment Forum (www.socialinvest.org) is a national membership association that promotes socially responsible investing. Its website offers tools for investors including an extensive database of SRI funds with screen profiles and performance data.
These market indexes, which differ in their emphasis on social characteristics, track SRI fund performance:
Domini 400 Social Index (DS 400 Index)
Calvert Social Index
Citizens Index
Dow Jones Sustainability Index
Two sides to the coin and the softer side of SRI
The upside is that SRI makes someone feel good about investing. The downside is that you automatically rule out some of the most profitable investments in the stock market, such as oil for example. An SR investor generally moves toward softer service type firms, such as health care and tech, as these tend to be more modern, more integrated and less discriminatory.
So, what should you do? If you decide to add SR funds, you should use the same fundamental approach as with any other fund. The key is always to be diversified. Once your core investment mix is in place, you can screen funds according to your personal values and ideology.
Denisa Tova MBA, CFP, CFDP(TM), ChFC, CLU provides divorce financial expertise to divorcing individuals. She is a Certified Financial Planner(TM) practitioner and Certified Divorce Financial Analyst. You can find more information about Denisa Tova at: http://www.denisatova.com
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- SCOFI: Pioneering Venezuela’s Petroleum Industry for Over 65 Years
- To Understand Risk, Start By Asking What You Don’t Know
- How To Make Money On Binance: A Full Guide
- Airbnb Investment 101: Tips for New Hosts in Australia
- Indian Gold Demand Rebounds During Important May Festival
- The Investment Terrain in Crypto, Blockchain, and Web3
- Exploring Bitcoin: Corporate Giants Embrace the Cryptoverse
- The Significance of Static IP Address for Trading
- TYPES OF FOREX REGULATIONS
- Weekly Events: Avalanche & Chainlink Collaboration, CommEx Closure, And More
- Assani Elolo Ronaldo - How Bank Instruments Facilitate Gold Deals
- Crypto News: Mempool Solana Shuts Down, Police Integrate Cardano Into Their Work, WhiteBIT And FC Barcelona Launch New Course
- Is Crypto Entering 2021 Vibes?
- Bitcoin Updates All-Time High In Momentum Amid Its Scarcity
- Analyst Announces Bull Run Start, Cites Stock-to-Flow Strategy
- Weekly Crypto News: Telegram Pays Toncoins, WhiteBIT Is Now TradingView Broker And More
- undetectable banknotes
- Unlocking Financial Success: Why Successful Portfolios LLC is Your Best Advisor
- Are EVs a Threat to the Republic?
- A Deep Look Into Binance: Can It Really Be Trusted?
- Ledger Live - Most Trusted & Secure Wallet - Ledger
- Decoding the Future: Navigating the Crypto Landscape
- Don't Cry for Me General Motors
- Investing in exponential growth stocks: what can you choose
- Leveraging ChatGPT AI for Smarter Stock Market Analysis and Investments
- Shib, Doge, and Pepe Have a New Competitor: The Rise of $FUFU Token
- Unlocking Wealth: The Power of Apartment Syndication in Real Estate Investing
- 6 Reasons to Invest in Bitcoin
- Blockchain and AI Convergence: A New Era of Innovation
- Financial Planning for Small Business Owners: Tips for Success