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5 Tips To Get Started In Socially Responsible Investing
11 / 22 / 2017
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Did you know that moving money is one of the most powerful things you can do to make change?

Whether you believe in social justice, protecting the environment or gender equality, you have the power to put your money where your morals are.

So what is Socially Responsible Investing? In a nutshell, SRI is avoiding financial dealings with companies whose actions you are ethically opposed to, in favor of investing in those that share your vision for a better world.

Before you even think about SRI, the responsibility begins with the money you already invest. Is there something unethical lurking in your portfolio? OpenInvest’s easy tool unravels the truth behind the paper trail of some common portfolios. If you don’t like what you see, all you need to do is sign up and tell us what you care about. You can transfer any investment account to OpenInvest by simply signing a form.

5 tips to get started in Socially Responsible Investing:

1) Socially Responsible Investing begins with financially responsible investing. If you don’t have a few thousand dollars you can set aside, you probably shouldn’t be in the stock market. A good checklist to ensure you’re not overstretched financially is the Personal Finance Waterfall. It was created by the Bogleheads – a network of everyday citizens interested in personal finance and investing.

2) Think about why you want to invest. Are you willing to make financial sacrifices to have an impact? If not, the good news is you don’t have to! Traditionally, some money managers believed SRI could theoretically hurt performance by reducing the size and diversity of portfolios. However studies now indicate ESG investing (environmental, social, and governance – a common acronym for responsible investing variables) isn’t just about being principled, it can lead to smarter investing.

In the past, if you wanted to avoid investing in things such as weapon manufacturing, you had to go out and hire an active manager. This often meant higher fees and a hit-or-miss performance. Now there is broad consensus that investors should hold the market through passive investing, not try to beat it. Fortunately, OpenInvest technology gives clients the best of both worlds – a good return achieved through passive investing, from a diversified, values-based portfolio.

3) Say no to hidden taxes. Online investment advisors will often quote a ‘management fee’ while secretly hitting you with underlying ‘expense ratios’ and transaction fees. Besides being unprincipled, these costs come right out of your performance and compound massively over time. This is why OpenInvest charges a single, transparent fee of .50% annually.

4) Utilize Tax-Loss Harvesting. If funds in your portfolio are making a loss, Tax-Loss Harvesting refers to the opportunity to sell off poor-performing stock and use that loss to offset the end-of-year tax burden for your gains. Traditionally it is utilized by the ultra-wealthy. While places like Betterment and Wealthfront offer Tax-Loss Harvesting, the opportunity for savings is quite limited. OpenInvest is the only dedicated SRI provider who offers Tax Loss Harvesting at the individual stock level.

5) Find out how corporations are acting on your behalf. When a corporation takes your money, they give you the right to vote on company decisions. However, this ‘right’ is often mired in paper packets, confusion, and too much information. The OpenInvest app is making things far easier. We provide investors with a short summary of ballot measures they care about and the opportunity to swipe left or right to have their say. Such shareholder activism has a real impact. In May 2017, almost two-thirds of Exxon Mobil’s shareholders told corporate executives to adhere to the Paris Climate Agreement regardless of what the Trump administration decided. OpenInvest is the only place you can vote in shareholder resolutions with a swipe, giving power back to the people who own it.

Need more info? We’d love to chat with you about any questions or concern you have about SRI or investing in general. You can email us 24/7 at or call us during normal business hours via 1-855-466-6545

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