Wilson Financial Services Inc.

(859) 824-9422

Investment Read Time: 3 min

Investing with Your Heart

Some individuals believe that return on investment shouldn’t be the only criterion for how they invest their money. For them, the social impact of investing is just as important – perhaps more important.

The history of socially responsible investing stretches as far back as the mid-18th century, but its more-modern form began taking shape in the 1960s, amidst the fight for civil rights and the emerging Vietnam War protests.

More than $17 trillion is managed under sustainable and responsible investing principles. This includes mutual funds, endowments, and even venture capital funds. It should be noted that amounts in mutual funds are subject to fluctuation in value and market risk. Shares, when redeemed, may be worth more or less than their original cost. Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.1

What Is “Socially Responsible Investing?”

The definition of socially responsible investing has evolved. And it may be referred to by different names, such as “sustainable and responsible investing” or “values-based investing.”

Whatever term is used, this investment discipline is usually characterized by a set of principles that govern how investments are selected. One widely used framework includes environmental, social, and corporate governance criteria (ESG).

What’s ESG?

ESG criteria of good corporate governance, positive environmental impact, and responsible community involvement are a guide for making investment selections, akin to other investment-related criteria, such as price-to-earnings ratio or revenue growth.

The underlying belief is that good corporate practices may lead to better long-term corporate performance.

Investor experience with socially responsible investing will vary. As with any mutual fund or exchange-traded fund, socially responsible investments are subject to fluctuation in value and market risk. Shares, when redeemed, may be worth more or less than their original cost.

Individuals should also recognize that each investment approach may operate under a different set of principles, so you should be careful that your selection mirrors your personal values and beliefs.

1. USSIF.org, 2020 (most recent data available)

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

5 Keys to Fiscal Fitness

5 Keys to Fiscal Fitness

These basic moves, if done consistently, can help ensure that you are fiscally fit both now and in the future.

Spotting Credit Trouble

Spotting Credit Trouble

The wise use of credit is a critical skill. These 10 questions will help you assess your skill level.

Choices for Your 401(k) at a Former Employer

Choices for Your 401(k) at a Former Employer

Individuals have three basic choices with the 401(k) account they accrued at a previous employer.

 

Have A Question About This Topic?







Thank you! Oops!

Tax-Advantaged Health Care Planning for Retirement

Heading into retirement with confidence is easier if your planning includes steps to minimize taxes, especially as it relates to health care planning.

Organizing Your Finances

Spark joy and become more confident by giving your finances the home organization treatment.

It’s Time to Have a Talk with Your Parents

One of the strangest developments in the ever-evolving child-parent relationship is reaching the point when an adult child starts dispensing advice to his or her parents. It’s a profound, but natural turning point in the relationship.

View all articles

Should I Pay Off Debt or Invest?

This calculator will help determine whether you should invest funds or pay down debt.

Home Mortgage Deduction

Use this calculator to assess the potential benefits of a home mortgage deduction.

Should I Buy or Lease an Auto?

This calculator compares the financial impact of leasing versus buying an automobile.

View all calculators

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

View all presentations

Video: The Independence of Financial and Emotional

Greater financial and emotional confidence brings greater independence. Isn’t that what it’s all about?

Dreaming Up an Active Retirement

When you retire, how will you treat your next chapter?

Are Alternative Investments Right for You?

With alternative investments, it’s critical to sort through the complexity.

View all videos