ESG Investing
Today we learn how to invest ethically or what it means ESG
As we know, our society is constantly evolving.
Investments need an evolution, in this case giving greater attention to what is sustainable for the planet.
In fact, until now there was no particular attention in investments regarding the ethics followed by companies and the only parameter concerned was the mere profit of money.
Investments defined ESG as Environmental, Social, Governance investing
This definition applies to companies that are in line with the new perception of the modern public attention to social and ecological problems of the planet.
These companies are the ones to keep an eye on and to own if you want to create an ESG portfolio, or ethical portfolio.
Going to see deeply the ESG acronym, this means:
E as Environmental, we consider the pollution produced by the company, energy consumption and the green or non-green footprint that the company itself has, for example in the production of carbon dioxide.
S stands for Social, which includes respect for the rights of the various communities, the provision of fair salaries to all employees without discrimination, aid to minorities and social management in the workplace.
G stands for Governance, which is the management of diversity within the working community.
Now, how can we make sure that we have a state-of-the-art portfolio?
We have two methods, with some differences to apply to our studies on possible assets to buy.
The first method, which we can define as "negative" or "removal", involves our decision to remove from our possible purchasing choices those companies that have areas of interest such as tobacco, weapons, gambling, or are implied in fraud or minority mismanagement stories.
Once this selection is complete, the remaining companies will be our possible purchasing choices without further in-depth studies in this regard.
Otherwise we can use another method that we can define as "positive" or "inclusion".
That is, we seek only actions that give local and environmental benefits or follow initiatives dedicated to improving the world and gradually eliminating their impact on the environment through, for example, the use of only renewable or sustainable forms of energy such as solar and wind energy.
Now chosen the method, you as a small investor or an ESG fund manager, after having roughed up the list of buyable shares, will make a purchase choice based on other technical parameters.
The ESG method is not a standardized system at the moment, in fact it has different criteria and different points of view based on the manager's or purchaser's thinking.
We might be surprised to find some fossil fuel companies considered ESG compliant, this is because they are among the various companies in the segment the most efficient on many parameters such as their excellent impact on the economy of the community where they operate.
Remember that the ESG scores assigned to the various companies can vary a lot due to the difficulty of analysis.
Companies have many partners, they have long and complicated supply chains and everything behind it is difficult to analyze in depth.
This leads us to talk about a phenomenon, like greenwashing or the cleaning of the reports created by the companies themselves.
This implies creating green initiatives that serve exclusively to have a better ESG score but that in reality do not impact on pollution or improve the life of the community.
There may even be ESG scam profiles, in which reports are artfully created for companies that actually have no ecological target.
In short, you would invest in a company that cuddles unicorns on paper, but which in reality unloads the used oil from their vans and truck into the river behind the shed.
So beware of gray areas.
Currently, the ESG profile has become a bit of an hype, so funds and ETFs have been created made exclusively by ESG companies.
This solves the problem of choosing but at a higher economic cost. On the other hand, fashions always cost a little.
Also be aware that ESG criteria limit your diversification, creating greater investment risk.
In short, we find ourselves at the end of a clash between ethical investing versus traditional investing
However, what concerns the ESG method can lead companies to make changes to their production and management methods, even leading them to be ahead of the legislation that will change in the future.
Customers themselves are also more likely to buy ethical products when they know about them.
How to choose an Exchange - Rookies
Today we see how to choose an exchange for buying and selling our cryptocurrencies.
First of all we must understand at what point of our path we are, this guide wants to be a sort of how to for complete newbies.
There are some basic things to know and consider before choosing your trusted exchange.
Let's start with the idea that all large exchanges tend to be more or less equivalent in the service you will use at the beginning, but moving forward you will obviously also notice substantial differences.
One of the first differences that we can check is the trading location of the exchange and consequently which customers the exchange accepts, based on their country of origin or residence.
For example, US clients are not always accepted on some Asian exchanges.
Another difference lies in the methods of payment of crypto or, to better define it, in the method of entry into this world.
In fact, not all exchanges accept fiat money deposits.
Many exchanges only accept stable coins and not all of them. In this case you would find yourself with some euros on your hands without knowing how to get them to your exchange and you would have to find an alternative method, such as switching from another exchange that accepts fiat money.
Then the usage fees must be considered.
We've already talked about what fees are, and how they can destroy your profitability.
The more expensive an exchange is, the harder it will be to make sure your trading is positive.
The KYC or customer verification system is another thing to consider.
There are exchanges that do not allow you to operate without your documents while others give you an operating or withdrawal limit.
And then lastly, the number and which coins are listed on the exchange.
Choosing an exchange with a limited number of coin is not a long-term choice, unless you are a specialist of those specific coins.
Instead, an exchange with a good number of coins, to which more are added, will allow you to increase your future earnings.
Learn more about safety here.
How to buy a cryptocurrency - Rookies Step
Today we are going to see how to buy a cryptocurrency in 3 simple steps.
phase 1 - Research:
Before doing anything you have to find out what you want to buy.
Which seems trivial, but it's not so easy to find because the crypto market offers a disproportionate number of coins.
First of all we need to understand if we want to buy a coins with a glorious past or a coins that have just come out on the market.
We need to make this research, which can also be based on suggestions given by the media or friends.
Be careful in this case not to be fooled by possible scams.
Analyze the situation of the coin on a graphical level and everything that revolves around it.
phase 2 - SAFETY
Once you have chosen the coin you want to buy, the first thing to do is find a secure wallet and create it.
Learn more about safety here.
step 3 - buy the coin
Open the exchange and press the BUY button.
Now some recommendations
Always do extensive research on the coin you are analyzing and if someone has suggested it to you, try to understand if it is a disinterested suggestion or not.
Obviously NEVER follow the hype.
The hype invariably leads to entering at inflated prices and then losing a lot of money. Enjoy the hype by standing at the window.
Remember that wallets are programs to hold your coins so pay attention to the different types of wallets and different types of addresses.
If you get the wrong address you have lost your coins.