More than a trend, socially responsible investing aligns your principles with your portfolio. Big oil, out; small environmental, in-simple, right? However, like all investing, there is more behind how to make green while going green. Here are three key strategies to get you started on the road to socially responsible success.
1. Investigate your investments.
While the desire to invest in green technologies and socially responsible companies is a noble one, you need to accurately assess performance, profitability, and risk as well as social perspective. What you see may not be what you get, especially as the green bandwagon has artificially inflated values. Do your research, diversify, and invest with your head as well as your heart.
2. Know what you own.
Savvy investors should consider issues like tax consequences and the balance of industries in their portfolios before they sell, and examine what they own closely before making any hasty judgments. You may already have companies or funds that at first blush seem compatible, but rely on your research to uncover those socially responsible management practices that will fit your profile.
3. Explore beyond the basics.
While stocks, bonds, and funds are typically the first place investors look for responsible choices, consider branching out into alternative assets including commodities and currencies. What about investing in sustainable real estate ventures? Or the Nobel prize-winning concept of micro-lending, which channels investment dollars to small businesses? Keep an open mind to benefit your bottom line.
Putting your money where your mind is not only feels good for your conscience and your wallet; it can affect social change, improve the local business community, and develop a better environment for us all-no small reward for taking the time to make your investment decisions really matter.
Josh Silverman is the Managing Partner of Silverman Strategies, a Registered Investment Advisor focused on building wealth responsibly. For more on socially responsible investing and to sign up for monthly newsletters, visit www.silvermanstrategies.com.
