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Welcome back, fellow parent

I received an amazing question from a reader coming out of last week's newsletter about alternative investments.

This is a great topic and has been a growing trend for the past few years.

Let's dive in.

What is Impact Invsting?

Impact Investing seeks to generate social and environmental impact alongside financial returns. It prioritizes positive outcomes for society and the environment without sacrificing potential financial gains.

These investments typically focus on sectors such as renewable energy, healthcare, and education, aiming to address global challenges while providing competitive returns.

While Impact Investing has been around for decades, it became extremely popular in 2020.

This approach is pretty great as it focuses on sectors such as renewable energy and healthcare, which can offer high returns and help hedge against inflation.

Plus, you can sleep well at night knowing you're supporting causes you care about (and are helping society as a whole).

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2 Key Focus Areas of Impact Investing

Climate Change

No surprise here. With the ongoing climate crisis, impact investing has increasingly focused on renewable energy, energy storage, and technologies that reduce carbon emissions.

Investments in solar, wind, and energy storage technologies are expected to grow as the world shifts towards sustainable energy systems.

Impact investors are also becoming more involved in climate change legislation advocacy, supporting initiatives like carbon pricing and renewable energy mandates.

Stocks and ETFs to know about:

• Two individual stocks that make headlines quite a bit are Tesla (TSLA) and NextEra Energy (NEE). Tesla doesn't need an introduction right? Electrical vehicles, solar panels, and anything else Elon and team are cooking up. NextEra Energy is considered a leader in the renewable energy space - it'll be interesting to follow their trajectory in the next few years.

• If you're intrigued with electric and autonomous vehicles but don't want to stock pick, consider an ETF. One I recently stumbled on is the Global X Autonomous & Electric Vehicles ETF (DRIV). It invests in all of the big players, including Tesla and Nvidia.

• Two solar ETFs to check out include Investco Solar ETF (TAN) and Global X Solar ETF (RAYS). The solar industry has taken a beating in the past 12 months. Some would argue to stay away. Others would call it a buying opportunity. I'll leave it to you to decide. Here's an article with additional options to consider.

The above scratches the surface of stocks in the climate change space. What's not listed above are companies indirectly making a positive impact on the environment.

A great example is Intuit (INTU), which supports several initiatives for the environment. At least you know a portion of your TurboTax bill goes to helping society.

Diversity, Equity, and Inclusion (DEI)

Investments promoting diversity, equity, and inclusion (DEI) have been gaining traction over the past several years.

This includes funding for businesses and initiatives that foster gender equity and racial diversity. Supporting DEI not only aligns with moral values but also enhances financial performance, as diverse teams often drive better business outcomes.

Stocks and ETFs to know about:

• According to Forbes, the top five US employers this year are Progressive (PGR), TIAA (not public), PayPal (PYPL), Edgwell Personal Care (EPC), and Salesforce (CRM).

• eTrade highlights three ETFs in the DEI space: Fidelity Women's Leadership ETF (FDWM), Tidal Trust III NAACP Minority Empowerment ETF (NACP), and Tidal Trust III YWCA Womens Empowerment ETF (WOMN)

Check out the Forbes article above if you're interested in investing in companies that are putting DEI at the forefront of their strategy. You may already be investing in these companies without realizing it.

Additional Resources

If you're curious to learn more about the cross-section of business and social impact, take a look at the below sites. Even if you don't put any money down, it doesn't hurt to be informed.

• Global Impact Investing Network (GIIN)

• Impact Investor

• Sustainable Brands

• Impact Investing Institute

• The Motley Fool

It's extremely easy to start Impact Investing. Simply head over to your brokerage of choice and purchase a few shares. Before hitting the buy button, take the time to understand your goals and research the companies you're investing your money in.

Happy investing and keep me posted! I love talking about the stock market and would love to hear about your wins.

Thank You for Reading 🤑

Thanks again for reading - I hope the above was helpful in your financial journey.

Reply to this email with any money questions you have. Always happy to help.

Talk soon,

The Dollar Dad

P.S. If you’re considering starting a newsletter or blog this year, I’d highly recommend Beehiiv (use my link for 20% off any paid plan for 3 months). Drop me a note if you need help getting started or growing your business.

P.S.S. As a heads up, the above link for Beehiiv is an affiliate link. If you make a purchase using the above link, I’ll receive a commission at no extra cost to you.