April 16, 2024


Savvy business masters

Aligning your portfolio with your values to ensure you are socially responsible when investing

Aligning Your Values With Your Portfolio | First Republic

Investing in UAE stocks means committing to the economy and the future of your wealth. By ensuring that you are socially responsible when investing, you can feel good about how your money is used. 

A socially responsible portfolio should reflect your beliefs, values and personal ethics. Aligning your investments with these core values will help ensure that you’re investing in companies that do not support activities that are harmful to people or the environment. 

This article will discuss steps for creating an aligned, socially responsible portfolio in the UAE.

Define your values

The first step in creating a socially responsible portfolio is to reflect on your values. To make sure that you’re investing in following them, take some time to consider the causes and activities that you believe are important and meaningful. 

These could include environmental protection, human rights, charitable giving or any other cause-related investment ideas. Write down these specific beliefs so that you can refer back to them when deciding where to invest your money. 

Additionally, consider how your values could shape the stocks you select. For example, investing in companies that commit to sustainability or renewable energy sources can be one way to ensure your portfolio reflects the values you want.

Research companies

Once you’ve identified what values matter most, you should start researching companies that match them. Look into local and international firms whose policies align with your values and beliefs. Consider whether the company is publicly listed, how long they’ve been in business, and any ethical or environmental initiatives they have taken. 

Check out a firm’s financials and past performance to ensure you make an informed decision about where to invest your money. Moreover, follow news reports to stay informed about the company’s operations and involvement in social or environmental issues.

Buy stocks online

After researching companies that match your values, you can buy stocks online through brokerages like DBS Vickers or Tiger Brokers. Buying stocks online with these brokerages allows you access to different markets and quick execution of trades without interacting with a traditional stockbroker. It also provides an additional layer of security as transactions are completed in an encrypted environment. 

Online brokerages often provide research tools and resources to help you make informed decisions about where to invest your money.

Invest for the long-term

It’s crucial that when investing with a socially conscious portfolio, you think of the long-term implications. Investing for the long term allows you to ride out market volatility and gives stocks more time to increase in value. 

Stick with your values over time, and don’t be swayed by short-term trends or news stories. Try diversifying your stock portfolio by investing in different sectors, countries and industries so that if one sector takes a hit, others can balance it. Review your portfolio regularly to ensure it matches your values, as companies can change their policies and operations over time.

Monitor your portfolio

Once you’ve invested, regularly monitor your stock portfolio and its performance. Pay attention to any company performance changes, policies or ethical initiatives. If a company you had previously invested in no longer aligns with your values, it could be time to reassess whether it should remain part of your portfolio. 

If a new company meets your criteria, consider adding it to further diversify and strengthen your investments. Furthermore, review your portfolio regularly to ensure you’re still on track towards meeting your long-term financial goals.

Rebalance when necessary

Periodically rebalancing your portfolio is essential to ensure you are still meeting your financial goals and that investments align with your values. It could involve buying more of certain stocks if they have increased in value or trading out for new ones if there has been negative performance. 

Additionally, rebalancing can reduce risk by selling off stocks that have performed well and reinvesting those funds into other parts of the portfolio. Rebalancing is critical to maintaining a socially conscious portfolio that meets your ethical and financial objectives.