In today's world, more and more investors are seeking to align their portfolio with their values. Ethical investing, also known as socially responsible investing (SRI), is a way to invest in companies and industries that align with your personal beliefs and values. But for those who are risk averse, it can be challenging to find investments that not only align with their values but also provide a level of security and stability.
Here are a few tips on how to align your portfolio with your values while also being risk averse:
1. Research and screening: One of the first steps in ethical investing is to research companies and industries that align with your values. Look for companies that have strong environmental, social, and governance (ESG) practices. There are also screening tools and resources available that can help you identify companies that meet your ethical criteria.
2. Diversification: Diversification is key for any investment portfolio, but it's especially important for risk averse investors. By spreading your investments across different industries and asset classes, you can help mitigate risk and protect your portfolio from market fluctuations. Look for ethical funds or exchange traded funds (ETFs) that offer diversification while also aligning with your values.
3. Consider bonds and other fixed income investments: Bonds are generally considered to be lower risk investments compared to stocks, making them a good option for risk averse investors. Look for green bonds or socially responsible bonds issued by companies or organizations that align with your values. You can also consider other fixed income investments, such as certificates of deposit (CDs) or money market funds, that offer a level of security and stability.
4. Consult with a financial advisor: If you're unsure about how to align your portfolio with your values while also being risk averse, consider consulting with a financial advisor who specializes in ethical investing. They can help you navigate the world of ethical investing and create a portfolio that meets your financial goals and values.
By following these tips, you can align your portfolio with your values while also being risk averse. Remember that ethical investing is not just about doing good, but also about building a strong and sustainable portfolio that reflects your beliefs and values. With careful research and planning, you can create an investment portfolio that not only generates returns but also makes a positive impact on the world.