Companies, organizations, and investment funds make a difference in the world by fusing natural elements with man-made discoveries. Thanks to technology impact investments have gained substantial recognition because of its measurable investment growth. Today, impact investors are interested in business development and ecological advancements for improving the quality of life.
The concept of impact investing uses mutual funds, offering diversified opportunities to fit your financial goals. Mutual fund portfolios manage equities, bonds, and other securities. You’ll find impact investments comprised of organizational equity and debt (long-term projects), venture capital (start-ups), and foundations (infrastructure).
1. It’s Not a New Concept
There is extensive data and information generated by sustainable researches, authoritative energy analyses, and predictable medical studies. But, as part of your portfolio, knowing the facts about impact investing helps to recognize its worth and potential for growth.
As a front-runner in trade, impact investments have grown in recent years aligned with the advent of technology and social issues. No matter which investment you chose, don’t select randomly. You should compare each one’s social investing value against your portfolio’s planned growth percentage.
2. Stimulating and Challenging Growth Impacts
Millennials have been an instrumental factor in this market segment driving the growth of impact investing. Why? It seems to be the generation accepting social responsibility for sustainability. They believe that life gets better when you integrate technology with nature's sources, and positive investment returns naturally follow.
Impact investments are founded on methods that continue to grow based on the market's demand and the human factor to persevere. Millennials tend to consider equity investments as a shareholder. It’s an angel design that attracts investors and large corporations seeking emerging technology.
3. Risk Factors
Let’s not forget one eternal fact – investing in any form comes with risk. Impact investing can be exciting, but it has its share of problems. You want to work with a trusted advisor, who can help you understand the kinds of issues that occur with this type of investment.
Over the years, impact investments have expanded outside of the traditional economic and commercial activities. For first-time impact investors, you can reduce your risks by starting with a small percentage dedicated to impacting investing. You can always increase the investment percentage down the road.
4. Teaming Economics with Investments for Profit
These days, global warming is still a hot topic and in need of further long-term developments for a healthier planet. Other aspects affecting impact investing are alternative energy incentives from solar, wind, and water. Agriculture investments will see resource improvements as benefactors (investors) influence productivity options.
Green bonds were created to fund environmental impact projects. Economic demands set the pattern for bond performance yields. Nobody’s sure about everything, but the goal of impact investing is to find a balance between the environment, business, and the consumer.
5. Market Measurements Linked to Growth
Choose your investments by considering the desired returns and preferences on how to impact the world’s improvements. Here is some impact investment data to keep in mind:
- Approximately $502 billion of impact investing assets are managed worldwide, as of 20181
- Green Bonds grew by 78 percent in 2017, a significant increase from 2016.2
- Of impact investors, 67 percent choose to only make impact investments.3
- In a recent survey, 91 percent of impact investors said their investors were in line or exceed their financial expectations since their inception.4
For most investors, impact investing is a chance to make a difference, while making some money. As investor interest increases, so do the possibilities of impact investment opportunities. It’s okay to be adventurous within limits. Just be sure your choices are founded on established approaches.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
The views expressed are the views of Drucker Wealth Management, and are not necessarily those of Hornor, Townsend and Kent, LLC(HTK). The information provided is for educational purposes only and is not intended as investment advice or a solicitation for the purchase or sale of any product or security. Investing involves risk, including the potential loss of the money you invest. Insurance and other financial products and services may be subject to certain terms, eligibility requirements, conditions and costs. Lance Drucker is a Registered Representative and Registered Investment Adviser of Hornor, Townsend & Kent LLC, (HTK), Registered Investment Advisor, Member FINRA (www.finra.org) / SIPC (www.sipc.org). 2 Park Ave, Ste 300, New York, NY 10016. 212.681.0459. Drucker Wealth Management and other listed entities are not affiliated with HTK. HTK does not offer tax or legal advice. Always consult a qualified professional for specific information regarding your personal situation.Diversification cannot assure a profit or protect against loss in a down market, and past performance is not a reliable indicator of future success. Mutual funds are sold by Prospectus only and are subject to varying degrees of risk, sales charges, and other expenses; please read the Prospectus carefully before investing. 3613831RB_Jun23