2 years ago
Impact Investing: How You Can Make a Difference
Author: David Sun
The world is quite polarized today. It seems that there’s always someone on the opposite side of any topic imaginable. And for some of these issues, we may not be content with idly disagreeing with others. However, it often feels like there’s nothing we can do about the problems in the world. After all, there are so, so many people who are far more influential than us.
What is Impact Investing?
However, there is a solution to that: impact investing. By investing in companies that align with your views, you are helping them raise capital. After all, the whole point of the stock market is to provide companies an outlet to raise funds from the public to further develop their business. So, when you invest in a company like Tesla, not only are you betting on their success in the future, but you’re also supporting the products that they make and funding their vision–which includes their lobbying efforts. That’s right. You and I can have an impact, albeit a minute one, on public policy through our investments.
Why Does This Matter?
According to Business Insider, retail investors, or individuals like you and me, make up nearly 25% of the stock market. And while it may be discouraging that the vast majority of control still lies in big corporations, retail investors still can make a large difference. For instance, the GameStop short squeeze was initiated by retail investors, not hedge funds. And more than 40% of Apple, the world’s largest company, is held by retail investors.
With this sizable market share and GenZ’s demonstrated enthusiasm for investing, it’s clear that this influence will not be going away any time soon. Thus, it’s imperative that we make smart decisions with our investments. So next time, before you enter a new position, think about whether you agree with the company’s vision for the future, and consider whether or not you want to support it.
Image source:
What Is Impact Investing? Global Impact Investing Network, thegiin.org/impact-investing/
need-to-know/.