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Step 1
Decide if you want to mix your money and your heart. If you prefer to keep them separate, socially responsible investing (SRI) isn’t for you.
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Step 2
Determine if you qualify to be in the hedge fund market. Anyone can have an investment portfolio. However, hedge funds in the United States are open only to an accredited investor, defined as someone making more than $200,000 a year or having a net worth of more than $1 million.
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Step 3
Define your values and search for companies that share those values. You can initiate "negative screening" of companies, for example, that promote weapons, gambling or tobacco. You can also "positive screen" for the best rated companies that share your concerns, such as children or hunger.
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Step 4
Screen various kinds of companies and indexes quickly by using the internet. Stick with companies with well-known reputations. Many financial websites have a list of SRI hedge funds. Indexes are helpful, i.e., the Wilderhill Clean Energy Index includes only environmentally conscious companies.
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Step 5
Enroll in socially responsible hedge funds if you wish, but understand they won't usually make much more money than your regular investments. There is a bit more flexibility because hedge funds are exempt from direct regulation by the SEC or NASD. And since SRI involves more forward thinking companies, they often carry a lower risk.
