Ethical investing, or more commonly known as socially responsible investing is an investment strategy that seeks both monetary return and social impact, often considered positive by advocates. Investments in environmentally sustainable products, for example, are considered socially responsible investments. Those who participate in such investments are called “ethical investors.”
The concept of socially responsible investing is gaining some popularity as financial planners and others recognize its benefits and scope. Investments in environmentally sustainable products, for instance, can potentially provide enormous benefits to society, particularly communities in developing countries where access to capital for large-scale commercial ventures is limited. In addition, ethical investors are more likely to make purchases from companies operating within those communities, since these companies typically have a greater stake in local economies. As a result, ethical investors are putting their money – their own money – into the local economy. For advice from Cheltenham Accountants, go to a site like Randall and Payne
When considering an ethical portfolio, an investor should keep in mind that the value of the portfolio and its holdings are unrelated to the beliefs of the individual investor; in fact, if the values of the portfolio holdings represent a higher portion of the overall value, then the investor is likely doing well for himself given that he is choosing investments that further his social conscience. Investors interested in socially responsible investing should educate themselves on the various forms of socially responsible investing and how each relates to their own social investments.