Making an “impact” with your investments

Trends tend to be an inescapable part of life. No matter what sector you look at — whether it’s sports, business or politics — when one group of people have some success doing things a certain way, others follow the crowd. It’s just the nature of things, isn’t it.

Well, that reality certainly hasn’t avoided the investment world, either, which is often — probably too often — a case study in following what others are doing in the hope that emulating an investment approach means emulating its success. But that’s not always the case.

One of the most recent trends in investments is what’s known as impact investing. It’s a bit of an unusual name, since I’m sure most investors want to make some sort of impact with their capital, especially on their bottom line.

Making a difference

However, that’s part of the point of impact investing, which is designed to attach some social benefit to the bottom line, too. Specifically, impact investing involves anything that comes with objectives beyond simply making the greatest return possible. So, impact investing might involve, for example, targeting clean technologies, or infant health, versus, say, tobacco or nuclear energy.

That’s not to say that impact investing doesn’t involve a focus on returns. It just means that a more careful deliberation is made about the kinds of investments made.

Impact investing also differs from what’s traditionally been known as socially responsible investing, or investing that’s had as its primary objective the attainment of some social good. Instead, impact investing is meant to make money, but also adhere to some higher social goals.

Yet, as with any trend, it’s important to avoid following the crowd simply to, well, follow the crowd. And, regarding impact investing, there is some caution to keep in mind.

Always make up your own mind

First, any investment should adhere to one’s moral compass. So, one shouldn’t need a trend to investing in values and principles you adhere to.

Second, sometimes trends need a second look. So, for example, when it comes to impact investing, and as Fortune magazine has already reported on, the available data doesn’t always meet that standards of what shrewd investors would consider valuable and accurate information.

So, when considering the value of any form of impact investing, just remember that you don’t need a trend to do your research and invest in what you believe in.

ASCEND GRP is an asset-management firm, with offices in Toronto, Richmond Hill, and New York, that services clients seeking investment opportunities worldwide.


Adhering to investment values — that you define

One of the benefits of alternative private investing is that you don’t have to follow all the traditional trends. You get to set your own goals and engage in the kind of investing you want.

Now, when many people invest, they generally seek the highest rates of return at the lowest levels of risk. This is a general rule of investing that seems pretty wise, doesn’t it. However, it’s not the only goal to keep in mind when investing.

Specifically, the reasons for investing are potentially as long as a list of investors. We’re all different. And we all seek different things when seeking to make the most of the money we have.

Various types of values investing

As an example, one form of investing some people engage in is what’s called socially-responsible or ethical investing. There are no set rules as to what constitutes such investing. However, it generally involves seeking opportunities that coincide with your own personal set of values.

This could involve enterprises that are environmentally conscious, or engage in business activities that you believe are worthy of support, such as aiding youth, or that have a track record of engaging in ethical activities and business excellence. Remember, it’s your money, and you have every right to decide what kind of people get it.

Of course, there are other types of parameters one can set for the type of investing you engage in. You can invest based on region, based on economic development, based on your personal knowledge and support of a sector — and the list goes on.

Enhancing your financial return

And, again, there’s nothing stopping you from sticking to the formula that most investors enjoy: high returns, low risk. And if you can adhere to this formula while adding your own criteria for filtering investment types, all the better.

Just remember that, when you do set your own investment criteria, information is crucial. Does the company you want to invest in adhere the environmental goals it states? Get verification from them. Does an enterprise consistently abide by its own ethical guidelines? Ask them.

Or, better yet, seek the advice of professionals who know where to get such answers. After all, it’s your money that you’re investing. You have every right to do it in a way that adheres to your personal values, that earns an acceptable rate of return, and that does so in a way that protects all your interests, and assets.

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