An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that inflation and its negative effects will have a minimal impact on society. This term is derived from the docile and placid nature of the bird of the same name, and is the opposite of the term "hawk".
Statements that suggest that inflation will have a minimal impact are called "dovish".
Doves prefer low interest rates as a means of encouraging growth within the economy because this tends to increase demand for consumer borrowing and spur consumer spending. As a result, doves believe the negative effects of low interest rates are negligible in the larger scheme of things. However, if interest rates are kept low for an indefinite period of time, inflation could rise considerably.
Friday, November 9, 2007
what are green investments?
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Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the underlying business(es) are somehow involved in operations aimed at improving the environment. This can range from companies that are developing alternative energy technology to companies that have the best environmental practices.
For the stock savvy, there are many pure-play, leading edge green companies that are traded on the major stock exchanges. These include startups that are developing new methods for creating biofuels or solar panels, and traditional market cap heavyweights that are expanding their product lines to include environmentally friendly products (such as General Electric's development of wind-powered electric generators). (To learn more, read Go Green With Socially Responsible Investing.)
Green investing can also be achieved through exchange-traded funds (ETFs), which mimic the stock indexes made up of green companies. Mutual funds can be another alternative, in which case a professional portfolio manager makes the green asset allocation decisions based on the fund's prospectus.
Unfortunately, because individual beliefs on what constitutes a "green investment" vary, exactly what qualifies as a green investment is a bit of a gray area. Purchasing stock in a business that is an industry leader in terms of employing environmentally conscious businesses practices in a traditionally "ungreen" industry may be considered a green investment for some, but not for others. For example, consider an oil company that has the best record for environmental practices. While it is environmentally sound that the company is making the best precautions in preventing any direct damage to the environment through its day-to-day operations of drilling for oil, some people may object to purchasing its stock as a green investment, because burning fossil fuels is the leading contributor of global warming.
Therefore, prospective green investors should research their investments (by checking out a green fund's prospectus or a stock's annual filings) to see if an investment includes the types of companies that fit their personal definition of "green".
Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the underlying business(es) are somehow involved in operations aimed at improving the environment. This can range from companies that are developing alternative energy technology to companies that have the best environmental practices.
For the stock savvy, there are many pure-play, leading edge green companies that are traded on the major stock exchanges. These include startups that are developing new methods for creating biofuels or solar panels, and traditional market cap heavyweights that are expanding their product lines to include environmentally friendly products (such as General Electric's development of wind-powered electric generators). (To learn more, read Go Green With Socially Responsible Investing.)
Green investing can also be achieved through exchange-traded funds (ETFs), which mimic the stock indexes made up of green companies. Mutual funds can be another alternative, in which case a professional portfolio manager makes the green asset allocation decisions based on the fund's prospectus.
Unfortunately, because individual beliefs on what constitutes a "green investment" vary, exactly what qualifies as a green investment is a bit of a gray area. Purchasing stock in a business that is an industry leader in terms of employing environmentally conscious businesses practices in a traditionally "ungreen" industry may be considered a green investment for some, but not for others. For example, consider an oil company that has the best record for environmental practices. While it is environmentally sound that the company is making the best precautions in preventing any direct damage to the environment through its day-to-day operations of drilling for oil, some people may object to purchasing its stock as a green investment, because burning fossil fuels is the leading contributor of global warming.
Therefore, prospective green investors should research their investments (by checking out a green fund's prospectus or a stock's annual filings) to see if an investment includes the types of companies that fit their personal definition of "green".
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