Build an Investment Portfolio You Can Be Proud of With Ethical ETFs
People often don’t think about their investments’ ethics, but many ethical ETFs (exchange-traded funds) are available to build your investment portfolio. Not only can they help you be more responsible with your finances, but they can also help you make decisions with your conscience in mind.
Here’s how to build an investment portfolio you can be proud of with ethical ETFs.
Track Your Progress
Tracking your progress is key when building an investment portfolio you can be proud of. This way, you can ensure that you’re on the way to reaching your goals and are able to make adjustments as needed. For example, suppose you have a retirement goal and a college savings goal but are falling behind in the latter because of recent market turmoil (such as the recent dip in oil prices). In that case, this may necessitate making changes to your investments. It’s important to remember that investing isn’t just about making money, but making a difference in society as well.
Learn From Mistakes
The best way to learn is from our mistakes. And when it comes to investing, there are plenty of opportunities to make them. First, decide what your goal is. Do you want the highest return possible or simply want to see ethical companies succeed? Once you know that, choose the investments to help meet those goals. We recommend putting your money in companies that have a positive social and environmental impact and financial performance.
Understand Risk Tolerance
To build an investment portfolio you can be proud of; you must understand your risk tolerance. This refers to your willingness and ability to potentially lose money in the short term to make more money in the long term potential. Once you know how much risk you’re comfortable with, you can start looking for ethical ETF that align with your values. If you want a socially responsible approach to investing, you might look for an ESG screen that looks at a company’s workers’ or human rights policies.
Keep It Balanced
A well-balanced investment portfolio is a key to achieving your financial goals. That’s why it’s recommendable to keep a balance between stocks, bonds, and cash investments to protect against market downturns and provide stability for long-term growth. Maintain this balance using a low-cost index fund for stocks, fixed income for bonds, and cash or cash equivalents for short-term liquidity needs.
Have a Goal in Mind
Building an investment portfolio can be daunting, but it doesn’t have to be. If you have a goal in mind, it will be much easier to build a portfolio you can be proud of. The two most common goals are building wealth and funding retirement. Determine Your Risk Tolerance: All investments carry some level of risk, so the next step is to determine your risk tolerance. While there is no right answer here, knowing your tolerance will help you make more informed decisions.
Conclusion
Investing in ethical ETFs is a great way to build a portfolio you can be proud of. Not only are you making a wise investment, but you’re also supporting companies that align with your values. The more investors invest in these funds, the more common they will become, and the more companies will create products to satisfy this demand. The future looks bright for those who believe in investing responsibly.
