Ethical Investing refers to the practice of using one’s ethical and moral principles as a filter for the selection of securities investing.
This investing process takes into account the investor’s personal values prior to making the investment decisions. These personal values, as stated earlier, are centered around the investor’s moral, social, political, religion, and the environment.
Furthermore, with suspicious and illegal investment deals on the rise, investors are showing concern and beginning to insist that companies they invest in are responsible socially. This means creating healthy products & services and keeping away from unethical business practices.
ETHICAL INVESTING CAN BE DONE IN 2 WAYS:
- Positive Impact: Choosing industries and sectors whose values align with that of the investor’s.
- Negative Impact: Avoiding industries and sectors whose values directly differ from that of the investor’s. For example: An investor may avoid or choose not to invest in alcohol producing & marketing companies as alcohol consumption goes against the investors religious beliefs.
HOW TO INVEST ETHICALLY
- When investing ethically, critically analyzing investments using ethical standards comes first. In addition to this, the historical, current, and projected performance of the investment should also be seriously scrutinized.
- Furthermore, we examine how sound the investment is and also analyze the investments potential to reap significant returns by reviewing the company’s history and finances.
- Analyze and confirm the company’s commitment to ethical practices relating to religious and moral principles.
ADVANTAGES OF ETHICAL INVESTING
- Investors benefit emotionally and financially when an ethical holding company performs well.
- Ethical funds or investments is bound to grow substantially in the future considering the amount of people that have picked interest and are investing in it.
- For the fact that ethical investing is gaining traction, it will eventually encourage other businesses to improve their ethical practices in order to attract funding.
CONCLUSION
Ethical investing is gaining a lot of traction in the Nigerian market and now is the perfect time to start investing. When an investor chooses to ethically invest, they always make a difference in the society. The investment primary goal is to meet certain values as well as substantial returns on the investment.
Thorough communication between the investment manager and investor coupled with extensive research are needed in order to find the perfect investments that will meet the investor’s goals and requirements.
Contact us at Goldenbridge Asset Management Ltd so we can help you get started on investing ethically with our Ethical Funds investment package.
