Technology is changing the driving experience. Get up to date with a free Smart DriverTEK workshop!
by National Endowment for Financial Education, AARP en Nuevo México, February 13, 2007
Every investor wants to own investments that perform well. A growing number also want investments that they feel contribute positively to the world—or at least don’t affect it negatively. If you’re one of these investors, you may want to look into socially responsible investing (SRI). SRI considers potential investments from both personal values and financial perspectives.
A Long History
Socially responsible investing in the United States dates back to the 1750s when Philadelphia Quakers prohibited members from buying or selling human beings. SRI became popular in the 1970s to show disapproval of pollution and South African apartheid. Today, over $2 trillion is invested in investments that are marketed as socially responsible, ranging from savings accounts and mutual funds to individual stocks and bonds.
Finding Socially Responsible Investments
Screening is a popular way to find socially responsible investments. With this strategy, you decide what practices and performance you want—or don’t want, from companies in which you invest. You might want to screen investments for:
Two other SRI strategies are gaining favor with investors:
Can you as an investor do well financially and do good? Yes, depending, of course, on the investments you select and economic trends. Some socially responsible investments perform well and others do poorly. Some investors believe that by avoiding companies with questionable practices, they can avoid losing money. The reasoning is that a company that pollutes the air or water can be hit with large fines. And those fines can impact the bottom line and drive down the stock price.
The key, as in all investments, is to do your research. While your heart can play an important role in where you invest, use your head, too, before making any investment decision.
How to get Started
If you want to make socially responsible investments, where do you start? If you buy individual stocks or bonds, you can learn about companies and issuers in prospectuses or on the Internet.
SRI funds list their screens, so you can consider ones that match your personal values. Be sure to read mutual fund prospectuses carefully, and understand all risks and fees, before you invest. You can also check out the Social Investment Forum.
This column is meant to provide general financial information; it is not meant to substitute for, or to supersede, professional or legal advice.
Note: The content areas in this material are believed to be current as of this printing, but over time, legislative and regulatory changes, as well as new developments, may date this material.
©2007 National Endowment for Financial Education. All rights reserved.
Please leave your comment below.
You must be logged in to leave a comment.
Get tips and resources to protect yourself from fraud and see the latest scam alerts in your state.
Members save 15% all day, every day at participating locations.
Exclusive program for members from The Hartford.
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
Manage your email preferences and tell us which topics interest you so that we can prioritize the information you receive.
Explore all that AARP has to offer.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at