Will COVID-19 Drive Socially Responsible Investments?

Many people feel as if they have to choose between their values and their money, but socially responsible investing allows them to do both. And COVID-19 may be making socially responsible investing more popular.

Socially responsible investing is the use of an investment strategy that considers social good in addition to financial return.

In the early stages, socially responsible funds typically used screens to exclude companies in a portfolio based on certain criteria. For example, a fund might exclude companies that derive a certain percentage of revenue from weapons, tobacco, alcohol and gambling.

Later, socially responsible funds began including certain types of investments. For example, a fund might seek to support the environment by focusing on “green” companies such as solar panel manufacturers.

Today, the process is more robust. Recent events, including the COVID-19 pandemic and social unrest, have led to an increased emphasis on doing good for society.

Socially responsible investment managers seek to understand a company’s operations and social impact thoroughly. Often, they use environmental, social and governance (ESG) factors. Environmental factors consider how a company exhibits concern for the natural environment. Social factors consider how a company manages relationships with its employees. And governance factors consider a company’s leadership, including its executive pay and internal controls.

But these investments are not for everyone. If you are interested in socially responsible investing, it is a good idea to do some research to ensure that such a fund meets your financial goals. And you will want to look at performance, although ESG factors have been linked to good performance.

We can help you understand the options available to you and ensure they meet all of your needs, both personal and financial. Please reach out to me if you would like help understanding socially responsible investments.

5 Easy Ways to Implement Healthy Finance Habits

Financial planning advice is often directed at those early in their careers or those who have retired. But what about the rest of us? Those of us in our working years who are approaching retirement need help too. Here are five ways for everyone to implement healthy financial habits.

Keep a budget. Track your income and expenses, both when you are working and when you are retired. Knowing what you earn and what you spend is the key to financial freedom.

Manage your spending. This may be the most important tip and the hardest to do, even if you have a budget. But small steps can go a long way. Don’t keep a lot of cash in your wallet. Avoid buying on impulse; make a shopping list and stick to it.

Save part of your income every month. Save, save, save. In your working years, save for retirement. In your retirement, save for a rainy day.

Take advantage of all tax-savings plans that are available to you. If you have an employer-sponsored 401(k) plan, use it. If you can contribute to an IRA, do it. Even a pre-tax transportation plan or a health savings account saves some money, and every little bit of tax savings helps you achieve your goals.

Be conscientious. This one is about mindfulness. Open bills when you get them. Review your bank statements for mistakes. Pay your bills when they are due. Plan your dinner menus in advance. Read all contracts before signing.

Can I help you save for the future? Feel free to reach out.