Should I put 100% of my portfolio into alternative energy companies?
No, we don’t think you should. Here’s why: If your financial goal in general is to have long term investments that will grow over time, one of the most important things you can do is diversify your portfolio. You wouldn’t buy stock in only one company and hold that and no other investments for your entire life, right? That leaves you exposed if that company falters, or if a new technology comes along that makes that company obsolete. Think Blockbuster. Blackberry. Kodak.
It’s the same with sustainable investing. You shouldn’t invest in just one company, and you shouldn’t invest in just one industry, either. Instead, you should diversify and invest in alternative energy and companies with more women in leadership and companies with low carbon footprints. That way, your investments can have a positive impact in a number of important areas, and with this diversification you can make sure you’re getting the same financial returns a non-sustainable portfolio would get you.
And since you aren’t sacrificing financial earnings over time, that means as your investment grows, more money goes into sustainable companies. This magnifies your impact than if you were only investing in one area alone, like wind technology.
That’s the diversified, financially savvy approach we take to sustainable investing at Vestive.