Think about when you want to give money to charity. Do you just throw the money at the first organization you see, or do you carefully research the organizations and choose one that you believe in?
For many investors, a values-based approach to investing feels most right. They want to support companies that align with their beliefs. You may have heard of impact investing referred to as “values investing” or even “socially responsible investing.” In short, it means that you’re investing in companies that think as you do.
3 Steps to Get Started with Impact Investing
If you want to get started impact investing, here are three simple steps you can take to get the ball rolling.
1. Figure out what matters to you
First, define what you mean by impact investing: what issues are important to you? Are you concerned about social issues, environmental or religious issues? Are you interested in medical or pharmaceutical companies? Do you support firearms? Only you know what passions are nearest and dearest to your heart.
And no matter what your interests are, there are stocks or mutual funds to fit your values.
2. Ask the experts
Next, you’ll want to find an advisor that will listen to what interests you. If the first words out of their mouths are, “You can’t make money doing that!”, it’s time to keep looking.
Find someone who says, “I think we can find something to align with your values.” There are plenty of choices, and they are getting better all the time. Many investors are even actively participating in the companies they hold as activist shareholders.
3. Do your research
After defining what you want and finding the right advisor, then start paying attention to the annual shareholder materials and proxy voting.
The more active you are in learning about the funds you hold, the more aware you can be about what you are supporting. Too many people invest in a fund thinking it is socially responsible, only to find out later it wasn’t what they thought it to be. An educated and open-minded advisor can help you before you invest.
Investing these days can seem tough, but you can feel good about the choices you’re making and still invest wisely. It takes a little time and devotion, but can be rewarding as well.
Learn More with Clarity
Ready to start investing according to your values? Clarity is here to help. Click here to learn more about our investment philosophy or to schedule a complimentary consultation today – we’d love to connect!
