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Comment by sabj | Hacker News Reader

I am conflicted in regards to situations like this one. For one, I am interested in invested in vehicles like this not just for the profit potential, but for what I feel is a genuine social / environmental good; at the same time, I hate the idea of being burned by putting principles before money; I continue to search for ways to make socially responsible investments that don't have the same risk profile as equity.

Thoughts?

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As an outside investor, you're unlikely to be able to tell genuinely socially responsible investments from greenwashing. For example, how are you going to tell the difference between a environmentally net negative windfarm investment that only exists to help itself to government subsidies and tax treatments, with a windfarm that is a net positive in terms of environment and investment cashflow?

My advice would be to optimise your investing strategy while ignoring the actual investment vehicle, then putting the returns to work in a way that you can see the direct results. You can avoid companies that truly offend you if you must. So invest in a financial services/ IT company that produces the returns you need, then spend those returns on an environmental/social improvement project in your local area, whether it is a pollution cleanup or a skill training centre. This is the same strategy as Bill Gates, just on a smaller scale.

The fact that you like what a company is doing should be a major factor in whether or not you invest in them, in my opinion.

Investing money is putting it to work. You can get monetary returns on an investment, but you also help the company do whatever it is doing, which is a sort of return. There's really no bright line between charity and investing. You just have to be aware of what kinds of returns you are looking for.

I think there can be too many people investing in a single / finite entity, at which point you can either try to profit by shorting, likely lose money by trying to invest further, or wait until people leave (and with high volatility likely there will be a time when the price is right).

Shorting is risky so I think you're out of luck. Just keep waiting for a good buy opportunity.

There are plenty of ethical/green/socially responsible mutual funds.

Right, but what I mean is, something that has less volatility / risk than equity, but similar 'social good' profile. Like, some vehicle that was responsible, environmentally sound fixed-income or suchlike. I wish there were a way to park money short / medium term that was also 'good.' I know (And have invested in) clean energy ETFs and the like, but not really hitting on what I'm looking for, which is something where I'd be satisfied with a much lower return (potential return, obviously) in exchange for just peace of mind knowing that the investment is at least a bit helpful versus say, just feeding the financial-services-industrial complex that has caused so many problems.

http://www.kiva.org/

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