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Worldchanging Investing, Part II
Alex Steffen, 3 Jan 05

Making money while making change is a tough balancing act. We've covered all sorts of ways for individual investors to make a difference.

Here's a new one: Sustainable Business Insider's guide to building a sustainable portfolio:

1. Create your universe of stocks  Make a list of companies you would feel excited about investing in.

2. Understand a company's business
It's important to understand what a company's business is about. If you shop in Whole Foods Market's (WFMI) stores you will understand their business model - they sell natural food to American and Canadian people, and now English people. If you like the concept and believe the market for natural foods will continue to grow, put it on your list...

5. Start with "paper trading." 
Beginning investors should start by investing safely - on paper-only. Set up a portfolio on a website like CBS Marketwatch and pretend you are buying 1,000 shares of one company and 200 shares of another. Buy and sell stocks over a six- month period and see how much money you make or lose. That's how you learn without hurting yourself.

6. Never fall in love with a stock.
It's hard to do! Watch the news. If a company's story changes and the reason you invested in the first place disappears then sell the stock.

7. Diversify your portfolio. 
Where you invest your money also depends on how much money you have to invest. Many advisors say if you have less than $100,000, most, if not all, of your money should be in mutual funds. ...

Lastly, you can't only invest in "perfectly sustainable" companies because you need some very large companies in your portfolio to be diversified. Kyocera (KYO), for example, is a solar leader, but the company has a multitude of other product lines."

Capital is one of those magical forces that turns minor transitions into major transformations. Your investments are someone else's capital: make sure it's in the right hands!
(Thanks, Lisa!)

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Comments

Regarding #5, I can also recommend http://www.stocksquest.com for 'paper trading'.


Posted by: Sasha on 3 Jan 05

Hm, also there's a typo up top, "protfolio" ...


Posted by: Sasha on 3 Jan 05

I definitely plan on investing in a green way as soon as I have more money and that my career takes off.

People should be more aware of where their savings go. I'm sure that many people would never lend money to most of the corporations they are helping out, but that out of ignorance, they keep investing in Betchel/GE/etc.


Posted by: Mikhail Capone on 3 Jan 05

Mikheil, no need to wait to hit the jackpot to begin having your money reflect your values: the foundation is your banking choices. Be sure your checking account money is in a bank that uses it locally, rather than (as an example) investing in profitable development projects such as malls in other cities. If you have modest savings (even $500-1000), which you are quite sure you won't need for a year or more, you can loan it to a community foundation or a purchase a pooled community investment note (eg Calvert has one, now available either directly or through brokerage houses I believe) that will put much-needed funds in the hands of small local projects while paying you more than a bank CD. Try it....you'll like it!


Posted by: Jim Cumming on 4 Jan 05

It's generally not a very good idea for retail investors to invest in individual stocks - high transaction costs and lack of diversification are serious risks unless you're investing millions of dollars. One of the many socially responsible mutual funds would be a better alternative. Many 401(k) plans offer these. If not, most have IRA plans as well. For short-term savings, a CD or savings account at a credit union might be the way to go. Rates are higher than at commercial banks, and the money is reinvested in the community by loaning to members of the credit union.


Posted by: John on 4 Jan 05



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