Key Aspects of Impact Investing

 There are several key considerations involved in impact investing. It is vitally important that investors take these into account when they are devising their portfolios.  

SETTING GOALS:  Investors get involved in impact investing because they want to make money, while supporting a cause they care about. Thus, the first step impact investors must take involves figuring out what they want to do with their portfolio. Portfolios can support a multitude of causes ranging from clean water to housing assistance. It all depends on the investor.  

CAREFULLY CHOOSING STOCKS/ASSESSING THE MARKET: Taking an investor's social and environmental goals account,  he or she must carefully assess each perspective investment. The impact investing market is relatively new; as a result, not much information exists on the risks and returns of many stocks. Additionally, many stocks don't have accessible exit options or investments with track records. Despite this, the impact investing community is already quite substantial and poised for growth.  Millennials have taken notice that the market possesses innovative fund structures, sophisticated measurement practices, and government support.  

IMPACT MEASUREMENT A central part of impact investing involves measuring and reporting the social progress of your investments. This not only informs the rest of the market of effective investments, but it also promotes a culture of accountability and evaluation among impact investors.   

Measurements will depend heavily on the objectives and capacities of the investor. In the end, measurements will be determined by the initial stated goal of the investor.