Ethical investing is becoming more and more popular these days. The ESG investment market grew by more than $120 billion last year alone.
Many ethical investors place trades online. But how can new traders make these decisions?
Overview of online investments and green options
Before the era of online trading, traders had to call and place a “buy” and “sell” order with their trading companies in order to trade for them. It was a very tedious process, and it naturally caused a lot of problems. Surprisingly, there are a few investors who are still used to trading offline even today.
However, with the advent of the internet in the digital age, most traders have moved to online trading platforms. You can place buy and sell orders, set market limits, set stop losses, check order status, read company news, view collateral lists currently stored in the dashboard, etc and have it. access to all your past investment statements. Online trading has also reduced costs for traders and investors.
The time you make money online through trading may be short, but it certainly pays off. With the growing popularity of e-commerce, regulators are becoming suspicious and stricter on rampant transactions that occur without proper regulatory methods. The need for these strict regulations is necessary because internet-based merchants today are the most susceptible to falling victim to fraudsters, hackers and scammers.
As the Internet has grown, so has the number of trading platforms. Currently, it is estimated that over 32 million individual traders are trading stocks, currencies (forex), commodities and more from home. The number of people who trade online is expected to increase in 2017.
The proliferation of online trading has led to niche markets, which has helped to increase the demand for ethical investing. A number of specialist platforms have sprung up which focus on environmentally friendly investing and other forms of ethical investing. The Good Trade has a list of ethical investing platforms worth checking out. Some of these platforms include:
- OpenInvest is a platform dedicated to making ethical investing accessible to everyone. It allows traders to customize their portfolios based on their values. They can focus entirely on environmentally friendly investments. They can even specialize in plastic-free businesses if they wish.
- EarthFolio is a platform that fully invests in ESG. It is also dedicated to profitability, so investors can always get great value for their efforts.
- SVX invests in many non-traditional investments that have been vetted for their ethical practices. It has many strengths focused on sustainability, social inclusion and other positive goals.
As more people become interested in ethical and sustainable investing, the demand for these platforms is expected to increase. ESG platforms like these are particularly popular with younger investors.
Benefits of Online Platforms for Ethical Investors
Online trading offers many advantages to traders; it’s cheaper than other types of trading, there are no geographic limits, you can trade at any time and without schedules on anything you want to trade.
The article will reveal why online trading was so popular until now. We’ll also talk about the implications of these unregulated business practices, as well as some steps regulators are taking to protect consumers from having their hard-earned money scammed through fraudulent websites and apps.
You cannot afford to ignore these questions as an environmentally or ethical investor. You want to invest in assets that are good for the planet and contribute to social justice. However, you also need to make profitability a priority.
The reason online trading has been so popular so far is that investors can profit from it quite easily. The simplest form of online trading is binary options trading where a trader only has to decide whether the price of a particular asset will rise or fall at the end of a specific time frame. If so, a trader is rewarded with a fixed profit percentage. If he does not increase, he will get nothing or possibly lose his initial investment.
However, investors don’t need to be geniuses to realize that with such an easy-to-learn and age-old method of trading, most people would love to partake. Your opportunities to make money as an ethical investor may seem more limited. Nevertheless, you can certainly profit from online trading. Many green or human rights-focused companies are doing very well.
US News has a list of green and ethical actions that work very well. Ginkgo Bioworks Holdings Inc. and Beyond Meat, two eco-friendly food companies, are on the list.
The growth of the internet is creating a larger market for ESG investors
The other reason why e-commerce has been so popular until now is due to the high number of internet users. Nowadays, almost everyone has access to the Internet, which makes it easier to do business online. That said, with this fast-spreading technology allowing people from all walks of life to access information on their own terms, some unscrupulous people would also be tempted to hijack to invest money online.
This is going to have a lot of benefits for ESG investing. More ethical investors will flock to platforms that make it easier to make ethical investment decisions. However, ethical investors will face some changes like everyone else.
Regulators are increasingly demanding in their responsibilities to merchants. Ethical investors also have to deal with it. One of the ways they want to protect consumers is by regulating the software applications and websites used by merchants to buy and sell commercial goods with each other. It is also one of those measures that has helped reduce most fraudulent business practices.
The other measure regulators have taken is to make it difficult for traders to access trading platforms through accounts that have not been verified by their own agencies. By verifying merchant accounts, regulators ensure that none are likely to deceive a customer again or engage in any form of fraudulent practice.
The costs of trading stocks are higher than those of trading forex or other commodities. The costs of trading financial instruments are usually very high, especially if one wishes to buy a large amount of shares. In the past, many people wanted to buy shares of a company that did not offer share classes at a decent price. This has made people to trade online so that they can save costs and get better deals as all their assets are available to them and in their accounts all the time.
Real estate and intellectual property can be traded online and there is no need to buy or sell anything on any given day or time. As internet trading provides access to all assets, costs are lower and prices are closer to market value.
How do ethical investors transact online?
There are many exciting opportunities to place trades as an ethical investor. However, they are going to need to understand the process.
When you buy or sell shares on an online trade, you order them to be issued within seconds. However, in these times, many activities are unfamiliar, such as:
- Your order has been registered.
- Your order was placed on a website
- It searches for the seller and when the buyer and seller are matched, a confirmation message is sent to both parties.
- The order and the price are communicated to the governing bodies. These regulatory bodies monitor all trading activity and are disclosed to all investors.
- Your trading records are kept in case regulators want to know what you have done in the past.
- The contract is sent to your stockbroker and to the broker from whom you purchased it.
- After all this, traders have 3 days to exchange money with stocks called a settlement.
- After this process, the money or shares are officially in your account.
These processes will be similar whether you invest in a traditional or ethical platform like OpenInvest.
How do ethical investors trade online?
There are many great ethical investments you can make. However, you must be pragmatic in your investment decisions. Here is the process you need to follow:
- Research and selection of stocks: you must carry out quantitative research, technical analysis, try to identify trends and understand short sales.
- Choosing a Broker Partner: You can check this article on how to choose the best broker.
- Look to eco-friendly trading advisors: you want to make sure the stocks you choose are actually green and in line with your ethical goals.
- Learn to trade stocks: You can easily learn to trade with a trading account and a demo account.
- Make wise investment decisions: try to figure out which stocks you can sell, divide your portfolio, do research before investing, and buy good stocks at low prices.
There are many good reasons to invest in ethical stocks. Green energy stocks are particularly attractive. Just be sure to do your research first.