I created my initial sustainable investment portfolio, with a focus on the environment, in the early 2000s. This portfolio taught me 5 important lessons.
- The stocks which win sustainable “best-in-class” may surprise you. Chipotle has, since its early days, been a quiet leader in sustainability. My friends were always surprised to hear about my support for Chipotle. But, let’s be honest, who doesn’t want an excuse to eat more burritos?
- Standing by your ethics can be painful. Archer-Daniel Midland was an early leader in ethanol production in the US. I was a supporter of US ethanol (yay for less fossil fuels) until research was published stating that corn ethanol can create more greenhouse gas emissions than fossil fuels. Although this investment was performing well financially, I made the difficult decision to sell it because it was not aligned with my ethics.
- Stock market risk is real. I bought SunPower Corp stocks at a time when there was excitement around solar energy but years before the price of solar photovoltaic (PV) began to significantly drop. I bought my stocks at a price of about $35. Three years later, the stock price was $8, a 77% decrease in price. Ouch.
- Stock market reward is real. I bought Chipotle stocks for about $50. I sold them for about $450, an 800% increase. More burritos, anyone?
- Mutual funds can provide a lower volatility investment option. My sustainable mutual funds always chug along, never getting me too excited or too upset.
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