Socially responsible investing might sound like a fad, but shrewd investors have been doing it for years.
Problem is, most rookie investors don't know it exists as a strategy or feel unsure how to go about it. Sure, we can do a basic Google search for "socially responsible portfolio," but what should we click from there?
We asked Jennifer Lazarus, a financial planner in Durham, N.C., where passive investors can turn when they want to build a nest egg that reflects their personal values.
Know your objective. First things first, ask yourself how you define socially responsible investing, says Lazrus. "That can mean a lot of different things," she says. "For some, it's about progressive social issues and social justice issues. For others, it might be labeled as faith-based investing."
Check US SIF (http://www.ussif.com). Lazarus says the Forum for Sustainable and Responsible Investment is chock full of info. about the field of socially responsible investing. You'll need to dig around, but the site is a nice place to generate a list of mutual funds to consider. In addition, if you're looking for passively-managed ETFs, you might check a site called Paxworld.
Research company sites. Once you've whittled down your list of possible funds to invest in, visit the individual companies' sites to learn how they've voted on the issues you care about, says Lazarus. Are they trying to bring about public policy change or merely change their policy for shareholders? "You may want to know how active they are in the larger space, beyond the individual mutual fund," she notes.
Consider community investment notes. Like regular mutual funds, these state-registered investments are easy to diversify and can be purchased individually. "You can purchase those directly from Calvert Foundation or through a brokerage like Schwab or Microplace.com," says Lazarus.
Visit Microplace.com. Here, green-minded investors can purchase community investment notes. According to Money Talks News' Brandon Ballenger, "the idea behind these small, short-term loans is to help people out of poverty with business loans that spur entrepreneurship and provide stability."
Ask an advisor. No one wants their advisor to impose his opinion, but chances are he might know what's out there, and be able to say "avoid this company," or "talk to so-and-so who specializes in this," says Adam Koos, a financial planner with Libertas Wealth. He may even refer you to an SRI specialist who can point you in the right direction.
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