Social investing may be the best way for investors and ordinary citizens to put their money where their mouth is. The fundamental idea behind social investing is to take a closer look at the companies your capital is supporting and to make decisions based on the behavior or the nature of the business a company conducts. For example, many people might feel uncomfortable investing in a company that participates in hydraulic fracturing, so they would instead focus their investing activity toward companies in the budding solar energy sector.
Being socially conscious with your capital can really boil down to a way of voting with your money, much in the way large companies or wealthy individuals lobby Congress. In the same manner that you can take action with your wallet by choosing to shop at one store over another, so, too, can you do that with an investment portfolio. There are a myriad of reasons as to why you might not want to support certain companies, be it a knack for pollution, anti-union behavior or anything else that doesn’t sit well with you at a personal level. Investing with your conscience offers a way to play the markets while making a positive contribution.
We’ve written about social investing before and even pointed out some companies that are actively making a difference, ripe for the social investor to investigate. But what about other companies that may appear to be a solid bet but come with hidden costs? Those costs can manifest in a variety of ways, though mostly negative externalities that, while unintended, can be extremely harmful. There are a lot of things to watch out for, so it’s important to do your homework before pulling the trigger on your next trade.
Read on to see seven companies with big hidden costs that might have an effect on your investing interest.