Key Takeaways:
- Learn the basics of investing as TradeOr shows you how to get started and where to look
- Investing is easy when done right and after a careful size-up of the market
Investing in Anything from Stocks to Crypto, How to Do it?
Investing has been around for centuries. Back in early 1600, the Dutch East India Co. became the first known business to offer its shares for investment. Since then, investing has taken many turns and twists.
Fast forward to today, the Internet has made it possible for everyone to become a stockholder, investor, or trader. Not only that, but you can be all those in one, and even spread across a flurry of markets. We’re talking stocks, currencies, indices, gold, crypto and more.
In other words, the investing world has progressed from windmills and elite investors to iPhones and college students trading tokens from their dorm rooms. This was strongly highlighted in 2021 when a seemingly small group of retail traders challenged Wall Street.
In detail, trading armies on Reddit and other online message boards turned the pros into investing on their head. That’s when the public realized investing doesn’t need to be reserved only for the big players in the industry. As a result, this democratized finance and paved the way for new participants.
What is Ethical Investing?
Further, the split between professional money managers and self-directed individual investors became even more pronounced in the ethical investing field. What exactly is ethical investing?
When an investor places a bet, there is always a financial instrument on the other end. It could be a stock, a cryptocurrency or another asset in the financial markets. And what ethical investing does, is it aligns your personal moral compass with your investment choices.
That means you only invest if you want to support a company or an industry. And vice versa, you avoid investments in companies you do not agree with.
More precisely, ethical investing relies on the investor’s ethical code. There is no universal formula that says which companies are ethical and what should be avoided. The best way to approach this type of investing is to figure out what is important for you. Several questions will help you know the answer.
- Is my investment going to make a positive impact?
- Is my investment sustainable in the long term?
- Is my investment against my own morals?
- Have I analyzed my investment thoroughly?
What are the 3 Pillars of Corporate Sustainability?
That naturally leads us to what makes an investment sustainable. Over the years, the world of business has accelerated to consume a lot more resources. But the earth’s capacity and ability to produce resources are limited.
To tackle the growing problem of consumption and negative impact on the planet, companies have shifted to the so-called corporate sustainability. In a nutshell, corporate sustainability has three main approaches for environmentally friendly development.
Environment, Society, and Economy
- The Environmental Pillar – this one stresses the importance of eco-friendly business practices. The environmental pillar aims to make sure companies have designed their processes sustainably. In other words, done in a way that would reduce the environmental impact of a company’s products and operations.
- The Social Pillar – the social pillar of sustainability intends to organize a company’s behavior both toward internal and external participants. More specifically, this approach makes sure employees are treated fairly, stakeholders are listened to, and customers are well-cared for. All of this help a business go beyond profit and into meaningful relationships.
- The Economic Pillar – every company needs to be profitable to remain in business. The economic pillar is focused on making sure a company remains profitable. While important, this pillar does not outweigh the other two pillars. Instead, profit should come only after a business has guaranteed it’s taken care of the impact it has on environment and society.
Now that you know the three pillars of corporate sustainability, you have better chances to make an educated decision what to invest in.
The Growing Popularity of the SRI ETF Sector
There’s another growing trend among investors looking to position their portfolio in line with ethics and moral. The socially responsible investing, or SRI for short, is considered an investment based on socially responsible conduct.
In more detail, it seeks out companies that have founded their business on good social value. In turn, an investor could choose to invest due to the social implications the money could have. Further, these types of investment could be packaged in an exchange-traded fund, or ETF.
As a result, SRI ETFs exist to make it easy for investors to hold several socially-conscious companies all at once. Socially responsible investments are projected to grow as the trading community expands to include more individual investors. On that note, community investing is also gaining traction with retail investors putting collective effort to support a given company.
Green Investment Opportunities
Another key branch for the ethical investor is the field of green investment opportunities. This industry is specifically focused on eco-friendly operations, solar energy, and CO2 reductions. Moreover, good practices like recycling, organic groceries, and sustainable fishing are also included.
With this in mind, you as an investor may be drawn to include more green companies in your portfolio. This said, green energy is a fast-developing industry that is positioned to solve climate change issues. In practice, this approach would be employed by companies looking to pivot from fossil fuels to renewable energy sources.
Water, wind, and solar are considered top sources of green energy. To this end, you might look into companies that are oriented toward these types of energy sources.
Ethical investment Strategies
With all the above, ethical investing is projected to keep growing as a market share. In that context, every investor is advised to take a closer look at companies or industries that aim to reduce carbon footprint, for example. In addition, you might consider investing in green energy companies positioned to solve climate change through eco-friendly products, powered by wind and solar.
Against this backdrop, it should be fairly easy for you to find many companies that promise to bring us closer to a greener future. Electric vehicles, water purifiers, wind farms, and solar panels are only some of the products you might invest in.
FAQ
- What is meant by investing?
Investing is the act of putting money, or funds, into a specific asset or a set of assets. These assets may be stocks, commodities, or cryptocurrencies. Usually, you expect to turn a profit from investing.
- Is investing risky?
Yes. Investing is risky, but you can reduce or even eliminate risk with a proper and in-depth research. Also, you can design an investment strategy that allows you to keep risks small while profits are big.
- How to get started with investing?
Ideally, you want to educate yourself and find a reputable broker. Once you are ready to dive into investing, be sure to check our own TradeOr platform. We offer a ton of financial instruments spread across multiple markets.