Are You Ready for Your Portfolio to Make a Difference?
INVESTMENT • Read Time: 4 min
Are You Ready for Your Portfolio to Make a Difference?
What Are Impact Investments?
Impact investments are made with a measurable or tangible goal for social change in mind. From there, the criteria may differ depending on your own values and focuses. For example, you may choose to invest in a company that commits to planting a certain amount of trees per year or another organization that provides resources to school districts in low-income communities.
Impact Investments, SRI and ESG investments have certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.
Setting Expectations
Tips For Impact Investing
Here are a few concepts to keep in mind with Impact Investing:
- Your values: What specific areas of impact are you hoping to make with your investments? Are you focused on sustainability, social justice, your religion, or another area? Deciding what you’re looking to accomplish can help narrow your focus.
- Types of investments: There are a variety of investments that are structured to help pursue your goals when it comes to Impact Investing. As you define your values, the types of investments may become more clear.
- Impact reports: Impact reports are designed to provide information that breaks down how the company is making a difference and what measurable goals they’re following. Impact reports are one factor to consider as you evaluate opportunities.
Impact investing can help keep your investment aligned with your personal beliefs. As you consider whether this choice may be appropriate for you, don’t hesitate to reach out. We may be able to provide some information or identify some resources that you may find insightful.
1. TheGIIN.org, April 20192. CFAinstitute.org, April 2021
3. TheGIIN.org, 2020
The content is developed from sources believed to be providing accurate information.The information in the material in 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 professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information, should not be considered a solicitation for the purchase or sale of any security.
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