Sense Of Worth
preface
As investors realize where their money is invested, investing in companies that meet your values is becoming more and more popular. Generally speaking, “socially responsible investment”; investing according to your values will send information to the company. If there are enough socially responsible investors, change is possible.
Value based investment
What is value based investment?
That is to invest in companies that meet your values.
A value based portfolio can be based on environmental factors, ethical factors, or beliefs.
Investments based on a range of values are often referred to as “investments”. Ethical investment “; but when deciding what is ethical investment, it really depends on your ethics. More commonly, social responsibility investment”; but I like it better. “; value based investment”; because not everyone has the same values.
It may be moral for one person, but it may not be moral for another, so each of us should learn and read the information provided by the fund website. When investing in funds, it is important to know what is ethical for you.
After learning, prudent investors can distinguish what is true, what is fiction, and whether a company really meets their requirements.
Green baptism refers to a company that uses marketing to claim that it is a socially responsible company, but actually they do not practice what they preach.
A company can donate to a charity, but this is not necessarily an environmental protection, ethical or social responsibility.
A company I know has stopped selling coal, but it still sells imported clothing from Third World companies. The working conditions of the company’s clothing factory are unknown.
There are several variants of value based investment, which have different names; here’s what I know:
Socially responsible investment
These investments follow socially acceptable guidelines. The activities of the companies they invested in did no harm to the environment. Obviously, this type of investment has no capital to invest in fossil fuel companies.
Ethical investment
Ethical investment funds cannot invest in companies in the gambling, alcohol and tobacco industries. If you are a vegetarian, you can ban any investment related to the meat industry.
Trust based investment
Some churches have made their own investments in supporting various church activities. For many church fund investors, their return on capital is a secondary consideration for the church to use the investor’s capital for its business.
Green investment
This is basically related to climate change and the environment. This is another name for socially responsible investment.
Impact on investment
Another name for socially responsible investment.
It is important to follow the basic laws of investment, diversify investment, and invest according to age and life goals. Investing in mutual funds is a good way to reduce risk because the funds are spread out among other companies. As we all know, diversification is a good strategy. This is especially true when you are old and have little time to recover from financial setbacks. Young people can take more risks.
Balancing risk and compensation is an art, and really doing it well requires experience.
About this article
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Note: This article is the author’s own opinion and experience, and does not represent financial advice.
