OPINION: Rise of social impact investing lays to rest the notion that greed is good
Friday, March 28, 2014
Do we really invest to make money? Yes, if you make money the old-fashioned way. You look at the trade-off between risk, return and liquidity and make the investment if it yields a return that you feel happy with, relative to the risk, with the liquidity you want.
There are, of course, two ways of investing. One looks at the fundamental value of the investment (the Warren Buffett way) and the other simply follows the crowd; the momentum play.
The biggest problem with the conventional way is that you assume your money will be used to do something useful for society and make a return for you. As we discovered during the last financial crisis, this is not necessarily so.