Monday 18 July 2011

Ethical Investing

So you’re green? Save the Planet? Well when it comes down to ethical spending we think of the environment, but when it comes to investing, people often do not think about the impact of money they are investing on a macroeconomic scale. Why? Because we like to watch our savings grow (achieving a capital return). One of the most popular forms of investing is currency exchange futures, which bet that one currency will increase in value over another (Speculative Investing). The problem is that this can have significant impacts on a country’s economy. Figures show that about 95% of international currency conversion is for speculative purposes.
So what is the problem with making money through speculative investing? The problem is that investments are not long term focused. Investing in the construction of schools, hospitals and businesses that contribute back into the economy with jobs and services is what I classify as “Ethical” investing. When you invest in a security because you feel it may increase in value, this inflates the price of that security beyond the price it should be (from its sales, costs debt/equity measures)
So next time your investing, have a read about the company and what they do, is that extra 1% return really worth it. 

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