by Nigel Hilton
Socially responsible investing means that you only put money into a business if they work in an environmentally friendly way, they pay their workers a fair wage and only use suppliers that do not use slave labor in third world countries. The media has given so much attention to these things in recent years that consumers are far more aware of these matters than they have ever been. In the US there are whole groups of people who will only buy from one are considered to be ethical companies, and each time a new one is found they inform each other through social media or forums.
From a business point of view, it is great news to be recognized by one of the groups as it can bring many new customers. From an investor’s point of view, it is also a good thing, as it means that the businesses they could be putting their money into are thriving. As with everything in life, there are advantages and disadvantages in ethical investing, and only you can decide if it is right for you.
The Advantages
If you check this Swell Investing review it is easy to see that there are more advantages than disadvantages to socially responsible investing. Of course, they are not the only one, but some of the advantages seem to be:
- It is simple to invest online and as robotic trading is used when opportunities peak they can be harnessed instantly.
- Technology makes it easy to track your investments and to change them as often as you like.
- There is more than one type of account, including one specially designed for when people retire.
- Investment company’s fees are often expensive and complicated, but these investment companies are acting ethically themselves and usually charge a set fee, with no hidden charges.
- They would rather have lots of small investors than just a few big ones, so often you can start with as little as $50.
- You get a return on your dollars while knowing that the money is being used in only good ways.
- These companies tend to stick to just stocks, and not get involved in other investment types. These means they are experts in their field, and that has to be good for investors.
- They will source the best ethical companies to invest in, saving you the time and hassle of having to do this yourself.
- Shareholder rights come to you, which does not always happen with some of the traditional investment brokers.
Some Disadvantages
Some of the advantages have been mentioned above. There are more and they far outweigh the disadvantages. Because these companies are focusing just are businesses and projects that are ethical, the diversity can be a bit limited, although this is improving with time.
With fewer investments to choose from, there is more chance of making a loss. However, you are just as likely to be opening the door on a golden opportunity to make a lot of profit especially if social awareness around a particular issue you invest in is raised.
Investing in socially responsible companies can also be a bit more expensive, but if you believe in it, and you really think it’s the future, it may be worth taking the leap.
Considering socially responsible investing is something everyone should do before they put their money anywhere.
