Social values may not be the first thing that comes to mind when investing in the stock market, but there are numerous ways for investors to align their portfolios with their beliefs and passions.
Values-based investing has been around a while — religious groups have a lengthy history with it — but due to rising demand and better access to data, investors today have more values-based investment choices than ever before. As well, these investments often perform competitively: A 2016 TIAA Global Asset Management study concluded that investing indexes with socially responsible objectives achieved similar long-term performance as broad market benchmarks.
Here’s how to align your investments with your convictions and the impact that doing so can have:
Define your values
Think about your passions — causes you support through donations or activism, religious or political beliefs and the businesses you frequent. Now, merge those values — think climate change policies, corporate diversity, human rights, animal testing or faith-based ideals — into the criteria you use to select investments.