There are more strategies to investing than just things such as creating a diversified portfolio or knowing when to sell and when to hold on to securities. One of the other strategies to investing is the socially responsible investing strategy. This article discusses more about socially responsible investing.
What is socially responsible investing
Socially responsible investing can also be referred to as ethical investing or socially-conscious investing. It is a type of investment strategy created to do more good than harm. Socially responsible investing can help both the investor by helping them maximize their financial return from their investments as well as help the environment, the earth, and the people in it.
What types of investments
Usually an investor using the socially responsible investing strategy invests in securities that help to promote things such as human rights, diversity, consumer protection, and taking responsibility for the environment.
But socially responsible investing does not just mean that the investor chooses specific securities because of what they do that they agree with. Many of the socially responsible investors also choose not to invest in certain securities because the companies that go along with those securities do things they do not agree with. For example, some socially responsible investors choose not to invest in securities whose companies deal with gambling, weapons, tobacco, alcohol, abortion, and/or the military.
What it can be used for
Socially responsible investing has been used in the past as a great way for people to show their support for companies they approve of and for them to show their lack of support for companies they want nothing to do with or companies they feel need to make some changes. There have been many instances throughout history of people using their opportunity to invest to help change working conditions for people, help to bring about rights for women, or to show that they disagree with a certain war.
Just has been the case throughout history, people today can still use the socially responsible investing strategy to create change. They can join investing groups that invest in securities that involve companies that do good things and keep their money away from the securities that belong to businesses that are doing things they disagree with.
Mutual Funds
The number of socially responsible mutual funds that are available is growing each year. Investing in mutual funds is a great way for a person to diversify their investment portfolio. And having mutual funds that are socially responsible can help those investors who are interested in using this strategy to more easily diversify their portfolio while still being socially responsible.
Government-controlled funds
Since government-controlled funds are a pretty big part of investing, many activist groups as well as other investors are urging the government-controlled funds to have policies that help to encourage more ethical behavior from companies. For example, they would like the companies to give support to human rights, the rights of the employees, and for them to be more interested in environmental concerns.
Community investing
Community investing is a division of socially responsible investing. Community investing allows people to invest right to community based organization. These types of community organizations give loans for houses, education, or small businesses, usually to people who have been turned down by other lenders. And to help ensure that the investors will get their money back, many of these community based institutions will supply training and the other support needed to those who have taken out a loan. This can be a great way for people to invest in the development of a community.