Keeping your Principles AND Principal when Investing
Being socially responsible in life is different for everyone—for some it means speaking publicly at City Hall to hold elected officials accountable; for others it means going to church every week; and for others it means taking responsibility for their own health so as not to be a burden on the health care system.
Socially responsible investing is just as broadly defined and worthy of your attention, but not necessarily in the traditional ways – and this makes it a lot easier to also make money!
While a trusted mentor has insisted to me that the best way to invest responsibly is through flexing your consumer muscle when choosing what products to consume, I still take great pleasure in researching and debating the existence of a line between responsible and irresponsible investing.
Used to be that investing with your conscience had limited options and aligning your money with your values got you smaller returns. But now, building a well balanced, profitable portfolio with consideration given to socially responsible investing is achievable and downright stimulating!
While socially responsible investing can simply be based on criteria such as no tobacco, no firearms, or no child labour, the latest trend is to reward companies with strong governance practices and progressive environmental practices. The theory is that these are the companies that are going to be more profitable in the long run.
There are loads of mutual funds available with every sort of do-gooder theme you can think of, but you don’t have direct control of what the mutual fund managers buy, and you’re relying on someone else’s sense of responsible investing.
What’s important is that you find the overlap between investments that are appropriate for your goals and risk tolerance, as well as your own sense of what’s right and wrong.
It’s different for everyone so please call me, as I would love to help you create a fabulous portfolio worthy of your pride!
Heather Holden, PhD
Wealth Advisor, ScotiaMcLeod