Ethical investing on the rise: How teens can get involved

Investing is an important life skill, but there are many different ways to invest, and it can be challenging to navigate the options, especially while in high school. Knowing how to safely and ethically invest is something even most adults do not know how to do. 

Ethical investing encompasses making investments based on a personal ethical code. Sustainable and socially responsible investing fall within this category and are focused around the idea of promoting positive changes by putting money in funds geared towards social issues. Essentially, ethical investing means something slightly different to everyone, but it is still crucial to know how to find what companies align with one’s individual beliefs. 

NPR laid out the main topics to consider when starting to decide where to put money. “The first thing to know when you’re starting to think about ethical investing is the acronym ESG, which stands for environmental, social, and governance,” the article said. Issues such as pollution, gender equality and avoiding illegal practices would fall into these categories. 

After determining the basis of investments, finding where to put the money is next. It is extremely important to do research on how companies use the money investors put into them. Finding businesses geared towards ESG will aid in this process by eliminating the non-sustainable investment options. 

However, the goal of investing is ultimately to put money in with the hopes of gaining more money in return. While this is never a guarantee, investors can still look into how a business is doing to help gauge the likelihood of success. Morningstar and WisdomTree are great places to start as they provide insight into the market and rate how a company’s stocks perform. This can be especially helpful when beginning to invest or having little knowledge of how the stock market operates. 

Senior Vinay Joshi found a way to have a wide variety of investments but still ensure that he is careful with his money. “I also invest in cryptocurrencies, but sparingly because I’m still a bit skeptical of their long term viability,” he said. Joshi navigates the stock market by having an array of funds and investments in his portfolio. 

One of the most difficult aspects of investing is trying to decide what type of investment is best. Mutual funds and exchange-traded funds (ETF) focused on a single issue or a variety of issues or a 500 index fund are usually the safest investment options while still having a good return rate. Teacher Craig Parker gave his insight into the best investments for young adults. “By owning a 500 index you’re going to get pretty solid returns over the long run… and you have a decent amount of diversification within that index as well and there’s very low expense fees within that fund,” he said. This fund will gain diversified exposure to the U.S. equity market at a low cost and with little risk. 

Investing is a great way to make money over time, and now it can be done while also making socially responsible decisions. Putting money towards businesses that align with personal beliefs can be used to encourage progress within certain political and social agendas. 

As a young adult, it can be difficult to know what forms of investments are financially smart; That is why looking into businesses and using mutual funds or index 500 funds when beginning is extremely valuable. There are many resources available to aid in the process of investing and that can help ensure investments are safe and have a positive return while also being socially responsible.