How to Practice Ethical Stock Market Investing

Ethical stock investing is an investment in companies that show a responsibility for the welfare of people, maintaining a clean environment, and ensure their profits are not be obtained at the expense of putting people in danger. The business or investment engine should promote moral good.  Therefore, a person must assess their social conscience before a company is found with similar ethical standards.  Research is used to find companies or other investment vehicles that do not partake in illegal activities, unethical practices to generate the income, or make gains from the plight and despair of others.  Investors do not have to sacrifice good returns when ethically investing.

People must be committed to their beliefs.  Therefore, a self-assessment is done before any ethical stock investment is made.  It is not a complex assessment; however, it should reveal the priorities of person.  A priority to help people or be environmentally friendly should be found by a self-assessment.  It should also reveal just how moral person might be in certain situations.  Morality should be a high priority of anyone that decides to invest ethically.  Investors must adhere to morals and standards throughout every aspect of their life, and it includes investing.  Morality is revealed by the choices made by a person such as being on the road late at night at a stop light and not running the red light despite being the only person on the road.  Assessing how investors would conduct themselves in situations that require moral judgment reveals if an investor will make an ethical stock investment. Information gained from a self-assessment will make research of companies a lot easier.

Assessment provides a baseline to use when conducting research. Research will reveal companies that fit the baseline.  By asking the correct questions during the research phase of ethical investing, investors can find socially responsible companies that would be good investments.  Questions such as do the company create products that cause illness, do company have business practices that under mind the trust of its customers, or is the operation of their business environmentally friendly must be asked.  It will lead to discovering a socially responsible company.  Potential investors need documentation that reflects where and how a company spends their money.  A prospectus is good starting point to conduct research.  Similar research should be conducted on investments such as a mutual fund.  Investor Responsibility Research Center (IRRC) can be used to find information regarding companies’ social responsibility.  Therefore, it is important for investors to research companies and other investment engines to ensure their operation and policies are ethically sound and worthy of investment from an ethical stock investor.  Research should reveal that company or mutual fund would have good returns.  According to CNN, a few funds have better returns than the Standard and Poor 500.  For example, a company called LBA has outperformed the S&P 500 for over seven years with 36 percent return while S&P had a return of 1 percent for the same period.  It is a socially responsible company that has produced a great return.