Impact Investing, What Is It and How to Get Started

Investing is not just about making money, it's also about making a positive impact on society and the environment. Impact and socially responsible investing (SRI) have gained in popularity recently as investors look to align their values with their investments. In this blog post, we'll explore how to get started in impact and SRI investing.

1. Understand the Basics

Impact and SRI investing focus on investing in companies that are making a positive impact on society and the environment. This can include investing in companies that are working to reduce carbon emissions, promote social justice, or support sustainable agriculture, among other things.

To get started in impact and SRI investing, it's important to understand the basics of these investment strategies. There are many resources available online, including blogs, articles, and podcasts that can help you learn more about impact and SRI investing.

2. Define Your Values

Impact and SRI investing are about aligning your values with your investments. To get started, it's important to define your values and determine what causes or issues you are most passionate about. This could include social justice, environmental sustainability, or support for small businesses, among other things.

Once you have a clear understanding of your values, you can begin to look for investment opportunities that align with those values. There are many different investment options available, including mutual funds, exchange-traded funds (ETFs), and individual stocks.

3. Research Investment Options

Once you have a clear understanding of your values and the basics of impact and SRI investing, it's time to research investment options. There are many resources available online that can help you find investment opportunities that align with your values.

For example, there are websites and databases that track companies that meet specific impact and SRI criteria. Additionally, there are many financial advisors and investment firms like Godfrey Financial Associates that specialize in impact and SRI investing and can provide guidance and support.

4. Consider Your Risk Tolerance

As with any type of investing, it's important to consider your risk tolerance when investing in impact and SRI funds. While these funds may offer the potential for strong returns, they can also be more volatile than traditional investment options.

It's important to take the time to understand your risk tolerance and determine how much risk you are willing to take on in your investment portfolio. Additionally, it's important to consider your investment time horizon and how long you plan to hold your investments.

5. Monitor Your Investments

Once you have invested in impact and SRI funds, it's important to monitor your investments and stay up-to-date on any changes or developments. This could include changes to the fund's investment strategy, shifts in the market or political landscape, or changes to the companies in which the fund is invested.

By monitoring your investments and staying informed, you can make informed decisions about your portfolio and ensure that your investments continue to align with your values.

Impact and socially responsible investing offer investors the opportunity to align their values with their investments and make a positive impact on society and the environment. By understanding the basics, defining your values, researching investment options, considering your risk tolerance, and monitoring your investments, you can get started in impact and SRI investing and create a portfolio that reflects your values and helps you achieve your financial goals.