How to Be a Socially Responsible Investor in the Stock Market

With Social Security going bankrupt, 401Ks being pilfered and pensions going the way of the Dodo, it’s more important than ever for individuals to take their personal investment strategies seriously. But, if you’re like me, investing has always had an ugly connotation: thoughts of slick Wall Street brokers, rampant corporate corruption and sleazy CEOs immediately surface.

And these ideas are not entirely unfounded. Just take a look at your daily newspaper.

You probably won’t get past the front page before reading about some billion-dollar company outsourcing jobs overseas for a bigger bottom line, a morally bankrupt CFO who stands accused of padding his pockets at the expense of employees’ pension funds or a multi-national conglomerate doing everything in their power to bend environmental policies until they break.

So if you have a conscience, how can you do anything but stick your hard earned money in a bank account and sweat it out as retirement looms and you’re collecting a paltry .3% (if you’re lucky) interest?

Socially Responsible Investing (SRI) just might be your answer. Investing doesn’t have to be a dirty word. SRI is a way to build your nest egg while also investing in ethical companies.

Socially concerned investors seek profitable companies that treat their employees well, have strong records of community involvement, and adhere to particular socially responsible principles. Some mutual funds won’t invest in companies that produce weapons; others won’t invest in companies that conduct animal testing. Sweatshop labor, gay-friendly policies and profiting from alcohol or tobacco are a handful of other criteria that SRI mutual funds screen for.