All investing has an impact. Impact investing, or the pursuit of making tangible positive change through your investments, has become a hot topic in the investment world. What you may not realize is that whether or not you’re consciously investing for change, your investments are making an impact, says Megan Schleck, CEO of the investment platform Coin. Impact investing is about taking conscious control over the influence your investment decisions have on society and the world around you. “The more conscious we are as investors, the more power we have to make better decisions about our money,” Schleck says. If you want to take charge of your investments’ impact, start with these nine things beginners should know about impact investing.
Impact investing is still investing so all the same rules apply. “None of the basic financial planning and investment guidelines change with impact investing,” says Sonya Dreizler, a consultant to financial services firms about impact investing and ESG at Solutions with Sonya. You still need to be investing in a way that’s well-diversified and in line with your risk tolerance as it works toward your financial goals, she says. And you need to be prepared to stick out the market when things get rough. “The strongest indicator of personal return is how well you stay invested in the long run, not the individual stocks or funds you pick,” she says.