As the array of investment options continues to grow, investors have the opportunity to be more and more selective about the companies they choose to invest in, often choosing or rejecting certain stocks according to the ethical principles of the company they represent.
There are many terms used to describe this trend; ethical, socially conscious, socially screened, or socially responsible investing, just to name a few.
A certified financial advisor can help with the technicalities, but the truth is, one person’s moral line in the sand is another person’s leisurely walk on the beach, and we all have different convictions about the companies we invest in.
Trillions of Dollars Invested
Whatever you choose to call it, investing with an altruistic bent is not just a topic for discussion on college panels or a narrow niche of the investing world.
Socially responsible investments (SRI’s) currently make up over 11% of all professionally managed portfolios, totaling over $3.74 trillion in 2013.
What Do They Invest In?
Socially responsible investing can be about avoiding investments in companies that act against your environmental concerns, social and political positions, or religious values.
Many people choose to avoid investing in companies that sell cigarettes and alcohol or operate casinos, and oil companies that have caused major oil spills or have business dealings with foreign dictators may be less attractive to socially responsible investors.
But socially responsible investing doesn’t just mean avoiding certain companies. It can also include investing in companies that create goods or services that support your social agenda, moral concerns, and ethics.
Amy Domini is a major player in the field of SRI’s. She is a professional money manager who invests around the world in companies that support her investors’ social agendas, environmental and humanitarian concerns, and ethical values, while still making money.
She invests in one fast food company because it helped revolutionize chicken farming methods, changed fishing practices to protect mature female fish, and supports minority entrepreneurship.
Another company provides maternity leave for twice as long as its competitors, has a lower level of product recall, high employee 401(k) participation, and charitable giving that addresses customer preferences.
Amy also invests in companies whose products and services are designed to move certain social goals forward. Often, these companies are quite small, such as organic food manufacturers that don’t use genetically modified ingredients.
She looks to invest in mortgage lenders that educate borrowers about the loans they can afford, homebuilders that look to revitalize brownfield areas, and healthcare providers that seek to expand access.
Your investment choices can serve to help your community, address your ethical and moral concerns, and even make the world a better place. But ultimately, you are responsible for yourself and your family. Your investments must grow sufficiently over the long term.
Fortunately, Amy Domini and others like her have shown that these objectives don’t have to be mutually exclusive.
Here at Medallion Group, we applaud people like Amy who work to combine the worlds of finance and moral principles.
While we know that socially responsible investing looks different from one person to the next, we believe it’s important for people to truly believe in the companies they support with their investments. One of our certified financial advisors would be privilege to help you invest in what you believe in.
At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.
Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.
We strive to exceed client’s expectations – because we have high expectations of ourselves.