Wednesday, April 10, 2013

Green Investing Tips

Green Investing TipsThe world of green investment is expansive and dynamic. Its landscape, while similar to more familiar investments, is growing and developing at a pace that mimics the advancement of worldwide sustainability. But even with all the forward movement in the industry, there are still a few pieces of advice any astute investor should take into consideration before committing to an earth friendly fund.

Here are five questions to ask:

  1. Who are you giving your money to? Unlike other forms of investment, green investing can actually be a fairly intimate process. Local farms, startups and other grassroots initiatives are perfectly acceptable, meaningful causes to put your money behind. Of course, you need to know a little bit about the investee before you do anything drastic. Take some time to learn about the background and overall profile of any given green project
  2. What do you define as a green investment? While many investors have an idea of what they consider to be green practices, not everyone feels the same way. You may picture a green investment as putting into your money into a startup that aims to revolutionize photovoltaic solar arrays, but your neighbor may picture a green investment as putting his or her money into the least environmentally draining business in its sector (even if that sector is oil production).
  3. Where will you set your limits? It’s easy to get caught up in the narrative surrounding the green movement. If you’re being courted as an investor, you’ll probably hear a lot of peppy buzzwords that aim to assure you of the impending success of the green economy. While the future is certainly moving onto a more sustainable model, it’s important not to get overzealous. As with any investing sector, it’s important to diversify your portfolio
  4. What subset of green investment interests you? Green transportation? Green building? Green tech? There are a multitude of areas where green investors can take their capital. A good jumping off point could be finding the one you’re most passionate about and starting your research there.
  5. How long are you willing to hang around? Buying shares in green-minded companies can be a waiting game. Green technology and innovation is progressing at a rapid, but unsure pace. It could be a while before you see a significant ROI, depending on how you allocate your funds. Make sure you know what you’re in for.

Deepening your understanding of the green investment space can be beneficial for both you and the greater good. Do your homework and get involved! A little more education never hurts.

Sandy Moore