What are the advantages and disadvantages of socially responsible investment?

Socially responsible investment allows individuals to invest in companies that adhere to their personal beliefs. This ensures that companies that deal with behavior in violation of social justice will not benefit as much as other societies. Professionals on socially responsible investing include voting for investment dollars, support for proper business behavior and attempt to create a sense of ethics for society. Disadvantages may include loss of investment revenues and reduce overall risk alleviation from a potentially smaller investment portfolio. For example, a company that helps support the livelihood of foreign workers in other countries may be desirable than other investment opportunities. Individual investors who believe in social justice will often make investment decisions based on these types of policies or activities of society. Vvesators will receive internal benefits of cooperation with companies to improve the global economy and foreign countries. TOto is also known as the dollar vote. As investors place their investments in companies that they believe are socially active, these companies will gain more benefits from this external investment.

helps to create the environment of the right business behavior and business ethics is another way that investors vote with their dollars in socially responsible investments. Companies dealing with the right behavior and focus on more activities than generating profits will receive more opportunities to improve their business operations. Other businesses can see the benefits of a competitor and focus on socially responsible business practices. Investors will then have a hand in creating a better business environment and creating greater wealth for all individuals who write non -monetary benefits from socially active societies.

One Con on Socially Responsible Investingis the potential for lower investment returns. Companies dealing with socially responsible activities may not be able to maximize investment revenues, as all capital in society is not primarily used to increase profits. Investors will then lose money for capital spent to improve the livelihood of workers or other parties involved in business. Lower annual returns will mean that investors must maintain their investments in the company for several years to obtain regular revenues related to another company.

Another condition of this investment strategy is the inability to mitigate the risk. Fewer companies can participate in socially responsible activities. Due to this smaller group of potential investment opportunities, investors may experience a higher investment risk. Companies involved in socially responsible activities may also have a higher risk due to lower gross profits. As a result, individual investments will be more risky; Investors may not be able to alleviate these risksAnd from individual companies.