What is green investing?

Green investing is an increasingly popular philosophy that promotes investment toward environment-friendly companies or initiatives. Two investors might define a green company differently, but this mostly includes companies engaged in solving environmental problems (such as the development of renewable energy) or conducting business in an ecologically conscious way.

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This type of investing is deemed an offshoot of socially conscious investing, although neither of them implies investments that are safer than a market index such as the S&P 500. Investing in “green” firms can actually be riskier than other equity strategies, as many entities in this landscape are in the development phase, with low revenues and high earnings valuations. Still, if investors consider environmental protection via encouraging these eco-friendly businesses, then green investing can remain attractive and feasible.

Some options for building a green portfolio include the following:

Securities

Individual stocks allow investors to funnel their dollars to a number of companies that meet their “green” criteria.

Mutual funds and exchange-traded funds (EFTs)

This is investing in a pool of securities to offer average investors an affordable method for diversifying across multiple sectors.

Bonds

A fairly new part of green investing, green bonds produce funds for environmentally friendly ventures. This fixed-income vehicle, when offered by governments to fund green programs, may provide tax-exempt income.

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                                                      Image source: Pixabay.com 

Gregory Lindae is a veteran in the investment industry with over 20 years in service and has worked with companies such as Blackrock, Salomon Brothers, and FMO. Learn more about green investing this blog.

The Advantages Of Private Equity Investment

Private equity is an alternative investment instrument that gained popularity in the 1980s, when the private equity sub-industry leveraged buyouts entered public awareness due to numerous high-profile transactions. Since then, individuals and institutions realized that private equity is a profitable investment option.

There are numerous reasons for investing in private equity assets, such as the following:

 

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Diversified portfolio

Most financial advisors recommend diversifying portfolio, as it can minimize risks, maximize returns, and protect the portfolio from volatility. Private equity, when researched and analyzed intently, can balance the portfolio.

Plenty of opportunities

Of the millions of companies all over the world, less than one percent of them are listed on public exchanges. Instead of restricting investment activities on the limited number of public companies, investors can gain access to a large collection of potential investments by selecting private equity.

Participation in companies

Stockholders in public companies typically play take passive roles in management. It is different in private equity investments. Most of the time, private equity managers, who have extensive experience in the industry, want to actively participate in some of the management and operations tasks of the companies they invest in.

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Long-term outlook

For those looking to gain quick profits, private equity is not the right option, because investments in this asset class experience returns after a few years and private equity firms generally wait for the right opportunity before investing in a company.

Gregory Lindae is a veteran in the investment industry with his over two decades of experience in venture capital and private equity markets. For more investment insights, subscribe to this blog .