MADISON (WKOW)--The stock market is the symbol of modern capitalism. And over the years, it's also developed a reputation among some for being a symbol of greed and excess.
An option that's becoming more popular: socially responsible investing; taking into account not only financial gain, but also the impact your investments have on society.
"It could be a company involved in improving the environment, green products, a company that makes an effort to reach out to give loans to low income people or affordable housing for low wage workers," says University of Wisconsin financial specialist Michael Collins.
Collins says finding those socially-responsible companies can take some time. Often, people begin the process by weeding-out companies they consider socially irresponsible.
"So maybe it's labor practices, maybe it's products we think are bad for society."
The Social Investment Forum is a national group that promotes socially responsible investing by doing some of the legwork for investors.
Their website includes screening tools to help you find those companies that meet your standards.
There are also mutual funds that do the same thing, but you may end up paying for that.
"The downside is that all that screening takes time, energy and cost and so some of these mutual funds will have higher expense ratios than other funds. There are definite trade-offs with socially responsible investing."
Collins says you can also buy into a pre-selected group of socially responsible stocks called an index fund.
"There's one called the Domini 400, which compares pretty well to the S&P 500 and recently, it's performed better.
Collins advises not to over-think the socially-responsible aspect without keeping the bottom line in mind.
"It's the same trade-offs you always make with investing; try to find low expense ratios."
According to the Social Investment Forum, socially responsible investing accounts for an estimated $2.7 trillion of the $25 trillion currently in the U-S investment markets.
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