What is socially responsible investing?

By Investopedia AAA
A:

In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to reach our monetary goals can be overlooked. We know that mutual funds are able to offer instant diversification to individual investors; they give investors access both to different parts of a nation's economy and to the global marketplace. But another, perhaps buried, concern is the idea of socially responsible investing. While investing in a big name arms manufacturer may produce a tidy return in a person's portfolio, it can be disturbing to learn that the weapons being manufactured eventually become a payload in some foreign country.

By not investing in stocks that do business in areas such as gambling and the manufacturing of weapons, tobacco, drugs and alcohol products, individuals can impose their own social and moral values on their portfolios. Furthermore, people can choose to invest in companies they believe are making valuable social and environmental contributions, such as educational companies or companies that make an effort to curb pollution and protect the environment.

Of course, people will have different ideas as to what is socially responsible, ethical or even moral. If investors choose securities in accordance with their own beliefs, it's up to them to choose the investments they consider appropriate. By deciding to invest in companies that are socially responsible and accountable, investors can not only realize financial gain, they can also feel they have contributed to a worthy cause.

To learn more about this subject, see Socially Responsible Mutual Funds, Go Green With Socially Responsible Investing and Change The World One Investment At A Time.

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