Tech Stocks v Ethical Stocks 2021 - Where Should You Put Your Money?

Image Source: Freepik

If you’re looking for new stocks to invest in this year, where should you put your money - tech stocks or ethical stocks? Let’s take a closer look.

For many years now, the stock market has been viewed as an every-man-for-himself arena where the objective is to profit and make money at all costs. However, as people all over the world (especially younger generations) become more cognizant of their investment decisions and the ethical ideals of the corporation to which the stock belongs, this narrative is beginning to shift.

However, choosing your investments based on ethics does not guarantee performance. Just because a stock is offered by a company with strong morals, values, and ethics does not necessarily mean it is the best place to put your money. After all, the ultimate goal of investing, regardless of your ethical stance, is to earn a return on your capital.

On the other hand, tech stocks tend to outperform the overall market over extended periods of time, which is why they are so popular among people looking for the best returns on their investment. What makes tech companies even more appealing is their ability to develop disruptive products and services that can generate entirely new markets and revenue streams, but the problem is, they usually aren’t the most ethical companies in the world.

So, here we have our dilemma. If you’re looking for new stocks to invest in this year, where should you put your money - tech stocks or ethical stocks? Let’s take a closer look at the two options.

Ethical Stocks in 2021

First and foremost, it’s helpful to understand that determining what constitutes an “ethical” investment is purely subjective. What you consider moral and ethical may not be the same as what someone else considers moral and ethical. As a result, socially conscious investors must spend more time digging into the details of each stock to discover if their beliefs coincide with their own.

With that said, most socially conscious investors tend to avoid investing in companies involved in any of the following activities:

• Gambling

• Alcohol/recreational drugs

• Smoking

• Firearms

• Child labor

• Adult entertainment

• Meat

Companies that are involved in any of these activities are typically referred to as “sin stocks.”

Furthermore, socially conscious investors should conduct due diligence on the financial tools, software, and brokers they utilize. Let’s face it, brokers want to earn money, and they’re often under a lot of pressure to do so.

However, what typically makes the broker the most money, isn’t always what’s best for investors. In many cases, these services aren’t even really what their consumers desire. This is why it’s enticing for many brokers to push high-risk products because they’re more profitable than low-risk ones.

Not only is this unethical, but it also puts the investor and their capital at an increased risk of losing their funds. As always, research is your best friend here. Ensure you always check objective financial resources such as Investimonials to get up-to-date information on brokers and the financial products they offer so you can be sure you are being treated fairly at all times.

Now that’s out of the way, let’s take a look at some of the best ethical investment industries of 2021 so you can grow your money and keep a clear conscious at the same time::

Green energy

In a world concerned about climate change, green energy is a big topic. A rising number of investment opportunities are emerging in power generation that does not rely on the combustion of fossil fuels to create electricity for our homes or companies. Water, wind, and solar power are some of the most popular renewable energy sources.

Water

Water is one of our most valuable natural resources. Global warming has raised concerns that the world would run out of fresh water at some point in the future. Cities like Los Angeles, Miami, and Atlanta are all extremely concerned about water scarcity as climate change takes a toll on water resources.

As a result, there are tons of opportunities to invest in companies attempting to solve this problem, such as those involved in the collection, purification, and distribution of water.

Green transport

There are a plethora of investing opportunities in the green transport industry. Of course, the first one that springs to mind is Tesla (TSLA) with its fleet of electric vehicles. However, there are plenty more lesser-known stocks that you could opt for. Some of them are even trying to develop a completely alternative method of powering automobiles, and if the technology ends up catching on, you can bet that will be one of the best investments around.

Tech Stocks in 2021

Any stock in the technology sector is referred to as tech stock. These stocks are typically some of the most popular and best-performing stocks in the world, and as a result, they are

often a leading indicator for the economy and the health of the stock market as a whole.

All it takes is one look at the top-ranked companies in the world by market capitalization, and you will see a huge number of massively successful tech companies, such as:

• Apple

• Microsoft

• Facebook

• Amazon

• Alphabet

However, some conscious investors may not regard many of these companies to be “ethical” as some of their activities may raise concerns about human rights and their environmental impact. For example, there are many reports of poor working conditions and intense work regimes across many of the leading tech companies’ global supply chains.

Tech stocks vs. Ethical stocks: Why not both?

Just because you care about the company’s morals you are investing in does not mean that you have to miss out on great returns. Indeed, as more people become aware of their impact globally, ethical stocks are gaining in popularity, which only adds to their credibility as a sound investment decision.

According to The 2021 World’s Most Ethical Companies®, only six tech companies were recognized for their unwavering commitment to business integrity. These are:

• Dell

• Hewlett Packard Enterprise

• HP

• LinkedIn

• Microsoft

• Western Digital

Final word

These six companies listed above are a fantastic place to start if you’re seeking an ethical way to get into the tech industry. However, you should do your research on each stock you’re thinking about buying. This is because you are the only one who knows your values and ideals, and you must build a unique investing portfolio that reflects them.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes