Home / Blog / Ethical Investing 101: What Should You Do to Start?

Ethical Investing 101: What Should You Do to Start?

Venturing into investment is a good way to generate more income, especially if you are looking at long-term goals. However, if you want to invest in globally-conscious matters that are important to you, ensure you are practising ethical investment.

What is ethical investing, and how can you start? Keep reading to learn Coastal Advice Ballina Byron’s Ethical Investing 101.

What Is Ethical Investing?

Ethical investing is a term that has been widely used to describe the practice of investing that is focused on companies and securities that benefit not only the investor but also the community and the world as a whole.

But what is it, really?

It is a practice of investment based on what investors can do to create a better world for everyone. It is about making the world a better place through investing in corporations, securities, and shares that support and promote positive social change and environmental issues.

Ethical investing focuses on investment purposes and goals instead of maximising financial returns. However, this does not mean that ethical investors will not benefit financially. On the contrary, ethical investors enjoy the same financial returns that are not subject to the criticisms of activists and social change advocates.

The results of an Australia-wide study commissioned by the Responsible Investment Association Australia has found that the majority of Australian investors expect that their superannuation or other investments will be invested responsibly and ethically.1

How can you get started with ethical investing? Here are some things you can do.

Ethical Investing 101:

1. Weigh the Risks over the Rewards

Everyone interested in investing in ethical investments will have to consider the risks involved. Companies and securities that support and promote good values and respect for the environment and human beings could be associated with greater risk than companies that are related to social or environmental destruction.

However, the potential rewards in ethical investing can be worth the risks. You can start by weighing the risks against the rewards.

2. Consider Ethical Exchange-Traded Funds (ETFs)

If you are a beginner in ethical investing, you could consider using exchange-traded funds (ETFs) because they are simple and cost-effective.

ETFs are funds that are traded like shares on stock exchanges. They offer diversity and exposure to various asset classes and industries. They are cost-efficient, transparent, and liquid and can be easily transferred between brokerage firms, making them an ideal asset for ethical investors.

If you want to start with ethical investing, you can consider using ETFs. You can begin with ETFs dedicated to investing in companies that support and emphasise social change.

3. Define Your Personal Boundaries

When starting with ethical investing, you could consider starting with a modest strategy. You should think about how you want to invest. You should also determine your comfort level when putting your money into risky ethical investments. Define your boundaries so that you can know what kind of ethical investing you can do.

Any investment involves risk. However, you can still be able to enjoy the benefits of ethical investing and still pass the sleep test. You just have to know how and where to invest.

4. Do Some Research

To ensure that you are getting the best for your investment, research the company or security you are planning to invest in. Make sure that you are familiar with their business plan and their management. Know what the company stands for and determine if they agree with your investment values.

Final Thoughts

To make good ethical investing decisions, you should first be clear about your investment goals. Your financial goals may not always complement your ethical goals. You should be clear about your investment objectives to achieve success.

For ethical investment advice in Ballina, Byron Bay, and the Northern Rivers, contact us at Coastal Advice Ballina Byron. Our financial advisers will work with you in generating market-leading returns while ensuring that your investment is helping to create a better future for everyone. Call us or book online to secure your complimentary first meeting today!

REFERENCES:

  1. https://www.minterellison.com/articles/australia-wide-study-has-found-most-australians-expect-funds-to-be-ethically-invested

DISCLAIMER: Coastal Advice Group Pty Ltd is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.

(Trading names of Coastal Advice Group Pty Ltd include Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Compass Advice Port Macquarie, Wealth for Life Financial Planning and Coastal Advice Group Brighton/Somerton Park).

The views expressed in this publication are solely those of the author; they are not reflective or indicative of the Licensee’s position and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

Any advice or information in this publication is of a general nature only and has not taken into account your personal objectives, financial situation and needs. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your objectives, financial situation or needs.

Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product, it is important for you to consider these matters and to seek appropriate advice.

Past performance is not a reliable guide to future returns.

Any tax estimates provided by us in this publication are intended as a guide only and are not intended to be a substitute for specialised taxation advice. We are not registered tax agents and you should consult with a registered tax agent to determine your liabilities, obligations or claim entitlements that arise or could arise, under taxation law.

The information in this publication reflects our understanding of existing legislation, proposed legislation, rulings etc as of the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.

The publications on this site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia.