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Natural Awakenings Fairfield Cty/Housatonic Valley, CT

Crafting a Mindful Investment Strategy

Nov 02, 2015 09:18PM ● By Nikki Turosky Smith

Although Gordon Gekko would disagree, current statistics show that a growing number of today’s investors do not believe “greed is good.” Instead, they desire to have their money invested in companies that are not only profitable but good corporate citizens. Just as people are becoming more mindful of what they are putting into their bodies, they are also becoming more mindful of what they are putting in their investment portfolios.

Socially responsible investing SRI—also referred to as sustainable, responsible and impact investing—is becoming mainstream. According to the Forum for Sustainable and Responsible Investment (US SIF), currently 18 percent of the $36.8 trillion in total assets under professional management is involved in SRI.

SRI investors commonly avoid investing in companies that are involved with tobacco, weapons and fossil fuel production, to name a few. They desire to have their money invested in companies that rate highly in environmental, social and corporate governance factors. These include minimizing pollution; maintaining a safe, diverse and productive workplace; and presenting a high level of corporate transparency.

Proponents believe that returns from these strategies are comparable to those of more conventional investments. Evidence of the competitiveness of SRI investing is also found in the increasing investment by state pension funds, university endowments and foundations. These fiduciaries are obligated by law to seek competitive returns for the portfolios they manage. 

How does one get involved in SRI? Schedule a meeting with a financial adviser who can analyze investment holdings to determine how much of the existing portfolio is tied up in companies that represent areas of discomfort. A review of one’s financial needs, risk tolerance and expectations should then be performed before choosing new investments. Alternatively, if it’s advisable to maintain current holdings, an adviser can help create and file shareholder resolutions to effect corporate policy and make one’s voice heard.

For those that prefer to manage their investments on their own, USSIF.org is a great place to start. From here, people can take online courses, keep up with the latest news and publications, and connect with many available resources.

Nikki Turosky Smith, CFP, is the CEO and founder of GreenWell Financial, located in Danbury. She can be reached at 203-794-7156 or GreenWellFinancial.com.