Is “HIP” Investing Right For You?
FinancePublished August 11, 2011 at 6:53 pm No Comments
How your investment portfolio can do good for your wallet and the planet
It’s HIP to do good. It’s even better to make a profit while doing good. This is the philosophy behind HIP Investor, an investment advisor based on the belief that forming your investment portfolio around its “human impact” can also bring a comfortable return in the form of profits.
The HIP (Human Impact + Profit) idea is the brainchild of R. Paul Herman, CEO and founder of HIP Investor. The company formed in 2004 when it became apparent to Herman that there was a need to connect investors with opportunities that would net a profit while promoting a social, environmental or humanistic greater good.
The company’s philosophy immediately connected with people eager to invest their dollars with a purpose, and even global giants such as Walmart, Nike and Charles Schwab jumped on board. However, HIP investing isn’t just for large companies or corporations. The company also serves individuals, families and foundations. You may wonder, how is HIP’s philosophy put into practice? And are the returns on a HIP investment as good as those on a regular portfolio?
How HIP Investing Works
Clients interested in combining their investment portfolios with doing good can build their portfolio with HIP Investor, or convert their existing portfolio with a “HIP check” of its performance based on the areas of Health, Wealth, Earth, Equality and Trust, plus profit potential. HIP Investor clients are encouraged to invest according to their personal values and how that matches up with the companies they invest in. In doing so, investors support companies that are making positive changes in the world while also building a strong, profitable portfolio.
For individuals, families, and foundations HIP offers managed accounts, portfolio advice and wealth management. For clients seeking a managed account, HIP offers two options:
1. The QCRD Global Sustainability 100 Portfolio: This option gives investors the top 100 global companies with results in environmental, social and governance metrics.
2. The HIP 100 Portfolio: The HIP 100 is a re-weighting of the S&P 100 for sustainability.
For companies seeking to increase their sustainability performance, HIP offers consulting to both publicly held companies and private firms. Also, HIP Investor holds corporate sustainability workshops targeted toward the information that will most benefit your company.
If the HIP Investor philosophy interests you, you can learn more about how to be HIP with the book “The HIP Investor: Making Better Profits by Building a Better World” by R. Paul Herman. This book is a how-to manual for building a portfolio or a business that is profitable while providing benefits to our planet.
Does HIP Investing get big returns?
Yes, if investors are willing to build their portfolio by looking at companies as a whole and weighing their own values against the company’s stated values and supporting actions. HIP works by measuring a company’s output in health, wealth, earth, equality and trust and quantifying how these indicators guide financial value. According to Herman, HIP is “the new fundamentals of investing.” HIP doesn’t leave out “negative” companies. Each company is scored for their net good, and these scores contribute to that company’s overall ranking. Herman says this HIP approach has outperformed most traditional SRI funds and the market benchmark S&P 100 index both, in the period covering mid-2004 to mid-2009.
If the HIP Investment philosophy is the future of investing, it may be the best way to support and reward companies that follow through with sustainable practices, and pave the way for more companies to focus on changing how they do business for the greater good. And if it helps your bottom line in the process, then everybody wins.
